Supercomputer Time!
June 18, 2019
DarkCyber noted “Top 500: China Has 219 of the World’s Fastest Supercomputers.” The list contains one interesting factoid:
Lenovo was the top vendor both by the number of systems and combined petaflops. Its machines achieved upwards of 302 petaflops, to be exact, followed by IBM’s with 207 petaflops.
A petaflop is the number of floating point operations per second a computer can deliver. A floating point operation is, according to the ever reliable Wikipedia:
arithmetic using formulaic representation of real numbers as an approximation so as to support a trade-off between range and precision. For this reason, floating-point computation is often found in systems which include very small and very large real numbers, which require fast processing times. A number is, in general, represented approximately to a fixed number of significant digits (the significand) and scaled using an exponent in some fixed base; the base for the scaling is normally two, ten, or sixteen.
Just for fun, I was thinking about defining each of the assorted words and phrases, but then this blog post would be very big endian.
The killer fact, however, is that China has 219 of these puppies. Here’s the passage which garnered a yellow circle from my marker:
China surpassed the U.S. by total number of ranked supercomputers for the first time in Top500 rankings two years ago, 202 to 143. That trend accelerated in the intervening year; according to the Top500 fall 2018 report, the number of ranked U.S. supercomputers fell to 108 as China’s total climbed to 229.
DarkCyber thinks this is an important message. In fact, it seems more significant than IBM’s announcement, reported in “We’ve Made World’s Most Powerful Commercial Supercomputer.” The implication is that the faster computers are not commercial, right? The enthusiastic recyclers of IBM’s marketing information reported as “real” news:
The IBM-built Pangea III supercomputer has come online for French energy giant Total, bringing 31.7 petaflops of processing power and 76 petabytes of storage capacity. It’s now the world’s most powerful supercomputer outside government-owned systems.
But there is a bit of intrigue surrounding this “commercial” angle. I have done a small amount of work in France, and I learned that the difference between a French company and the French government is often difficult for a person from another country to understand. It’s not the tax policies, not the regulatory net, and not the quasi government committees and advisory groups. Nope, it’s the reality that those who go to the top French universities generally keep in touch. The approach is similar to India’s graduates of elite secondary schools. Therefore, I am not sure I am confident about the “outside government owned systems” statement in the write up.
Skepticism aside, the supercomputer you can buy from IBM is going to be outgunned by 10 other systems.
The other interesting allegedly true factoid in the write up is a node which includes the French, of course, IBM, and the ever lovable Google. IBM and Google, while not like graduates of GEM (Groupe des écoles des mine). Google’s hook up with IBM warrants some consideration.
Stephen E Arnold, June 18, 2019
So You Wanna Be a Start Up Winner?
June 18, 2019
Many people dream of becoming a start up winner. Good news. Now you have road maps to follow.
First, navigate to Chagency (not Change Agency, just close enough to make the name interesting) and click through the curated library of venture capital pitch decks. You can get ideas and perhaps some verbiage to increase the amount of money the investment firms will deliver to your door step.
Second, when it comes time to sell, you can navigate to this CNBC story and get the inside scoop on terms sheets.
There may be some rumors about the likelihood of failure. Those are just rumors. Are those who fund you likely to get angry? Not too much. What about the company acquiring your start up reaction when its investment tanks? Nah, no big deal.
Take flight to Moneyland.
Stephen E Arnold, June 18, 2019
Alphabet: Employees and Shareholders Allegedly Spell Trouble
June 18, 2019
CNBC continues to generate “real” news. The challenge for me is that CNBC is a television service. Take note because I read “Alphabet Investors and Employees Are Planning a Joint Demonstration at Shareholders’ Meeting.” The title suggests a predictive story; that is, the event described has not happened, and I am not confident in people who predict the future. But that’s just me.
According to the write up:
The groups will try to pressure company stakeholders and leaders to vote on proposals that ban non-disclosure agreements in harassment and discrimination cases and tie executive compensation to its diversity goals. Another includes a proposal to publish a human rights impact assessment for its potential search engine with China called Project Dragonfly.
The targets, in my opinion, are the more obvious examples of what I call “high school science club management methods.” These work as long as the science club is small, homogeneous, and dismissed by other students as individuals unlikely to be captain of the football team, president of the student council, or realize that there is some value is attending the prom with another humanoid.
We noted:
Google janitorial staff and community group Silicon Valley Rising will also be there to vocalize their concern over wage gaps and the residential effects of its imminent expansion into San Jose.
Yikes. Can HSSCMM deal with people like service personnel and people who are mostly invisible?
CNBC did not speculate. If the write up is on the money, DarkCyber believes that the GOOG will pay attention to those who stir up memories of things past.
Stephen E Arnold, June 18, 2019
DarkCyber for June 18, 2019, Now Available
June 18, 2019
DarkCyber for June 18, 2019, is now available at www.arnoldit.com/wordpress and on Vimeo at https://www.vimeo.com/342544814.
The program is a production of Stephen E Arnold. It is the only weekly video news shows focusing on the Dark Web, cybercrime, and lesser known Internet services.
This week’s story line up covers: A next-generation content processing system funded by In-Q-Tel; Dark Web scans for personal information; a new spin on Crime as a Service tuned to steal financial data; Canada’s prisons get a drone detection systems; and the FBI Vault adds additional Clinton email data.
This week’s feature is a review of Forge.ai’s content processing system for law enforcement and intelligence applications. The system converts open source and other data into “structured intelligent event event feeds.” Unlike many commercial content processing and intelligence systems, Forge.ai is designed to handle data flows of virtually any size and perform processing in real time. The company recently received the support of In-Q-Tel, the CIA’s investment unit. Lt. General John Mulholland is accepted a position on Forge.ai’s board of advisers. General Mulholland was the deputy commander of Special Operations command and also served at the CIA.
Other stories in this week’s DarkCyber video news program are:
First, Dark Web scans to find personal information are advertised on television. DarkCyber looks at some of the methods used by vendors who offer free or low-cost scans of the Dark Web for PII or personal identification information. DarkCyber reports that many services do not deliver comprehensive results. There are specialized services available to law enforcement and intelligence professionals, but most of these are not available for public use.
Second, crime-as-a-service or CaaS continues to improve. Malware from two different sources have evolved into a symbiotic relationship. The Gazorp tool makes it easy to customize malware known as Azorult. Despite the odd names, the one-two punch facilitates the use of these tools by an individual or group of individuals without deep technical expertise. Gazorp is offered without charge, but the value of the software opens the door to monetization. Other bad actors are likely to build on the CaaS approach of Gazorp’s and Azorult’s developers and users.
Third, in this week’s drone news, DarkCyber reports that Version 2, a Canadian company, will deploy a drone detection system as six of Corrections Canada’s prisons. Drones have been sued to drop contraband into correctional facilities. Some drone have delivered drugs, mobile phones, and McChicken sandwiches to inmates. Donnacona, one of Canada’s most secure facilities, will be among the first group of institutions to receive the new technology in early 2020.
Finally, DarkCyber provides information so that a viewer can download more than 400 pages of information related to Hillary Clinton’s email. The collection of documents is available in the Federal Bureau of Investigation’s Vault service. Manual review of the documents is recommended. Some media reports have not presented a comprehensive picture of the information in this most recent release of information.
DarkCyber video news is a weekly program. It contains no advertising, and it is designed for law enforcement, security, and intelligence professionals interested in software, new developments, and investigative innovations. New programs become available on Tuesday of each week. Programs are available via YouTube and Vimeo.
Kenny Toth, June 17, 2019
Google: A Tuneful Allegation about Indexing and Search Results
June 17, 2019
Google continues to attract criticism. DarkCyber noted an interesting twist on cleverness. Google has been a clever outfit. Now there may be evidence that a company with song lyrics may be slightly more clever. According to Boy Genius Report, a company with a database of song lyrics allegedly believed that Google was copying the lyrics and using them without permission. Remember. This is an allegation, and anyone not clever can make an allegation do a two step. The company with the lyrics is named Genius, and allegedly Genius inserted a coded message within its lyrics. Thus, when Google acquired these lyrics, Genius alleges that the coded messages appeared in Google’s lyrics. Smoking gun? How long has Genius been aware of the GOOG’s alleged improper use of lyrics? The answer, according to the article, is two years.
Several observations:
- This is an allegation, so it seems that legal eagles will take flight
- The use of “codes” is interesting because it suggests that the intake, indexing, and content processing system in use at Google may operate in an indiscriminate manner. The scraping may give a bad actor an idea for injecting certain types of data into a Google system. (I cover this type of exploit in my lectures about the flaws in the most widely used algorithms in content processing. Now we have allegations of a big time use case.)
- The allegation may provide some additional information about how Google allegedly favors its own content over that of third parties. The idea which could inspire some legal analysis is that: [a] Google knows via its analytics which content is hot, [b] Google seeks to acquire that content in some manner; and [c] when a query is run for something in that corpus, Google displays its content, not that of a third party.
Net net: Google is indeed clever, but this may be an example of a smaller company being clever-er. Worth watching what fancy dancing the Google uses to deal with this allegation of “genius.”
Stephen E Arnold, June 17, 2019
Palantir Salary Information
June 17, 2019
What does an engineer at Palantir Technologies earn? The question can be difficult to pin down. Team Blind ran a post which provided some insight. Keep in mind that these numbers may be horse feathers:
- Engineer with three years of experience and a Master’s degree: $175,000 base salary, 30,000 shares over five years, and a $50,000 signing bonus
- Engineer with three years of experience : $165,000 base, 50,000 shares over five years.
Stephen E Arnold, June 17, 2019
Amazonia for June 17, 2019
June 17, 2019
With travel and a crazy eye doctor appointment, Amazonia snagged a handful of highlights. Enjoy the bulldozer’s path from 30,000 feet.
Amazon Is Okay with a Break Up
DarkCyber noted an interesting report from CNBC. One DarkCyber research professional thought this announcement was a green light for regulators to create one or more additional Fortune 100 companies by dismantling some of the Bezos bulldozer’s accessories. CNBC reported as “real” news:
Andy Jassy, CEO of Amazon’s cloud business, said Monday that, although he doesn’t see clear benefits for Amazon Web Services spinning off from the rest of the company, if the U.S. government were to force that move, then Amazon would have to comply.
The information flowed from an interview with talk overs from Kara Swisher, who has become the “voice” of Silicon Valley deep thinkers. The story also included these statements:
Jassy has often been asked if Amazon could be planning to separate AWS and turn it into its own business. Historically, Jassy has said no. On Monday he said he still felt there were no major obvious advantages to such a move. He added that customers should not want it to happen because having to do things like hold earnings calls could distract from more important tasks such as keeping cloud services functioning at a high level.
Does Amazon Record Children via Alexa?
An interesting write up appeared in Gizmodo. Online news, of course, may not be “real,” but you can decide for yourself. Just read “Lawsuits Claim Amazon’s Alexa Voice Assistant Illegally Records Children Without Consent.” The write up states:
the complaint argues that Amazon saves “a permanent recording of the user’s voice” as well as records and transmits clips of anything said after Alexa’s “wake word” is uttered. It also claims that Alexa neither informs users that these permanent recordings will be created nor bothers to ask for their consent beforehand…
DarkCyber will monitor this allegation.
Amazon Is Fine with Regulating Facial Recognition
Phys.org reported:
Amazon has joined the ranks of other technology companies, including Microsoft and Google, in acknowledging the risks of facial-recognition software and calling on the federal government to impose national regulations on the technology.
Amazon Financial Shifts into Low Gear
In my Amazon Policeware lectures, I talk about the way in which financial information “snaps in” to services for government authorities. Think in terms of IRS investigations, credit and background checks, and similar services delivered from GovCloud. Against this background, consider Amazon’s new credit card. The Amazon bulldozer’s push is for people with poor credit who want and need an Amazon credit card. Once the territory of the Vanilla pre-paid bank card and similar “financial” services, the Amazon offering is significant. Marketwatch stated:
Like many other retail cards, however, the Amazon Credit Build card can only be used for Amazon purchases, making it a “closed-loop” card.
Seems like a drawback, right? Maybe not. Individuals with poor credit are often difficult to profile like a high net worth Silicon Valley one percenter. The card has hooks to Amazon Prime, a useful way to obtain information about certain card users’ video viewing preferences.
The article points out:
“Secured credit cards are my favorite cards for folks who are getting started with credit or rebuilding it,” said Matt Schulz, chief industry analyst at CompareCards.com. “They’re a great training-wheels card because there’s so little risk involved. After all, with typical credit lines of $200 or $250, there’s only so wild you can go with your spending.”
DarkCyber sees this one more interesting option bolted to the Bezos bulldozer. Unlike some of Amazon’s efforts in food delivery and operating in a “green” manner, this credit card play will be a useful probe for Amazon. If successful, perhaps after the bulldozer blazes a new trail, additional financial services will take root?
Amazon’s Blink XT2 Goes Dark
The Verge reported that the Amazon phone’s demons haunt the XT2. The XT2 is a video camera which garnered “mixed reviews.” Amazon wants love, gentle reader. As a result:
Amazon has temporarily stopped taking orders for the Blink XT2 smart camera that it launched last month. The XT2, which is Blink’s first new camera since Amazon acquired the company, is listed as “currently unavailable” for purchase. That applies to all configurations, including the single camera and multicamera kits. The Verge has reached out to Amazon for comment. Best Buy, which also carries the new camera, simply lists it as “coming soon”online, but some people have been able to buy it at their local stores.
The Blink XT2 may return. Amazon is still selling the Amazon Cloud Cam to Ring’s smart camera lineup. And DeepLens? Not mentioned in the write up.
Amazon’s Food Home Delivery Choked Out
Geekwire reported that Amazon has shut down its food delivery business. DarkCyber has never used Amazon’s or another other food delivery service. The fact that Amazon has offered the service since 2015 was “real” news for us. The service started in Seattle and then became available in more than 20 US cities and London, according to Geekwire. The write up points out:
The closure of Amazon Restaurants after investing serious time and money in the service is a rare retreat from the e-commerce behemoth.
As Amazon “dabbled,” Geekwire notes:
Uber Eats, which launched more than three years ago and is live in 500 cities globally, generated $1.46 billion in revenue last year, up from $587 million in 2017, and brought in $536 million during the first quarter of 2019…. Grubhub, meanwhile, saw revenues reach $324 million for the first quarter, up 39 percent year-over-year, though its operating margin dipped by more than 10 percent, The Motley Fool noted.
For Amazon’s competitors failure may be a delightful Amazon take away.
Amazon Personalize for Everyone
ClickZ likes Amazon’s personalize service. The article “Amazon’s Famed Recommendation Service Personalize Now Available to Every Application” uses the adjective “famed.” Famed? The write up states:
To utilize this personalization-as-a-service, a publisher provides an activity stream from an application, which can include such data as clicks, page views, signups or purchase history – along with info on the products to be recommended, such as products, videos, songs or articles. Additional user info, including demographic or geographic data, can also be included. AWS said the supplied data is kept private and secure, and only used for that application’s recommendations. The service selects the most appropriate algorithms, trains a personalized machine learning model that is designed for the data, and then hosts and manages the model as it provides the recommendations via an API call. Application owners can control the service through the AWS console, and billing is only for the amount of the service used, with no minimums or upfront fees.
If you want to read Amazon’s own explanation of its announcement, navigate to this link.
But “famed”?
Amazon and Blockchain
The UK insurance outfit Legal and General will use Amazon’s blockchain system for its bulk annuities business. Bulk annuities are what makes some UK pensions tick. “UK Insurer Legal & General Picks Amazon for First Pensions Blockchain Deal” reported:
L&G is only launching the blockchain platform for bulk annuity business outside its core markets of Britain and the United States, although an L&G spokesman said the platform could be extended to those two markets in future.
Amazon’s unique selling proposition is that the insurance company can focus on building new business, not keeping a blockchain up and running.
Another brick in the Amazon bulldozer policeware parking garage? Maybe?
George Mason, Yep, George Mason’s Cloud Degree
DarkCyber thinks this news story, overlooked by “real” media,” is important. The Business Journals reported on June 11, 2019, that the Bezos bulldozer dropped off some Amazon professionals at George Mason University. After talk and pizzas, the university favored by some government types, and Amazon had a deal. Student can enroll in George Mason (for example, some Department of Defense professionals, and after four years of study emerge with a four year cloud computing degree. Some of these cloud savvy professionals will return to the US government and others will join the consulting firms which serve the US government. DarkCyber believes that the cloud service the graduates will be able to make work is AWS. “Amazon Web Services Partners with George Mason on 4 Year Degree Program” states:
The announcement comes a year after AWS rolled out a cloud curriculum-based associate degree program at Northern Virginia Community College.
Amazon is also pumping in $3 million for housing.
Amazon explained it this way:
NOVA and Mason faculty worked with AWS Educate curriculum designers to create a BAS degree path that will equip students with technical skills and hands-on experiences to help prepare them for careers in cloud architecture, cybersecurity, software development, and DevOps. The degree pathway will be launched in fall 2020 as part of the ADVANCE program, the NOVA/Mason partnership that streamlines the path to a four-year degree and entry into the workforce by eliminating traditional transfer obstacles, providing students with additional coaching and financial incentives, and highlighting pathways to high-demand careers. The degree program will be backwards-mapped to in-demand skills along with competency-based credentials required by AWS and other cloud employers. All students will receive membership in the AWS Educate program and gain hands-on, real-world experience with leading cloud technology and tools.
As Yoda may have said, “Plan ahead, young JEDI. Cyber warriors need we soon.”
DarkCyber expects similar deals with NOVA and other nearby universities. We also want to point out that the bulldozer is pushing AWS cloud into community colleges and pre-college education. Computer Weekly reports:
Amazon Web Services joins forces with Career College Trust to create cloud course that will prepare students for entry-level tech jobs or further education at university
And if the money and support are insufficient, Amazon rolled out new badges for student who learn AWS RoboMaker, AWS Sumerian, and AWS Deep Racer. The RoboMaker badge is for creating robots to replace inefficient humanoids. the Sumerian badge is a virtual reality play. The DeepRacer badge is for racing virtual cars on virtual tracks. The game angle is a good way to interest young, hungry minds.
Amazon AWS Fees: Know Before You Sign
DarkCyber wants to point out that the complexity of Amazon’s services are equaled and perhaps outdone by Amazon’s pricing structures. “AWS Costs Every Programmer Should Know” is a useful write up. The article includes information for compute and storage, which often comprise the bulk of the customer attention. DarkCyber believes that similar analyses would be useful for the numerous other services Amazon makes available. Amazon’s pricing complexity and its different approaches to assigning fees to services is a bit of digital left overs. Like the company’s “two pizza teams,” the pricing appears and becomes part of the system. It is possible for a customer to sign up for a service and then forget to disable or simply forget that it was a for fee deal. The Amazon billing system keeps on chugging along. Thus, scope out the costs and think about the bumps in fees when thresholds for data, transaction, or some other operation are crossed. Like the AT&T of old, certain thresholds can add significant amounts to a monthly invoice. And like Ma Bell, the time machine approach to bill adjustments is not 100 percent efficient.
Partners and Resellers
The companies may not be household names, but Amazon is signing up partners and resellers. Selected deals this week:
Information Builders will create and deliver health care data management from the AWS cloud. Source: Yahoo
Pulumi has set up shop to selling “how to” services to future AWS customers. Source: Geekwire
SAIC is now a premier consulting partner for Amazon AWS.
VMware and AWS continue their UK push. The NHS deal is one facet of the plan. The article said: “Last year, VMware extended its public sector commitment by announcing VMware Cloud on AWS GovCloud, a hybrid cloud service designed to enable public sector agencies in the U.S. to leverage a common cloud infrastructure.” Source: Silicon Angle
Stephen E Arnold, June 17, 2019
Amazon and YouTube: The Hong Kong Protests Mark the Day that Twitch.tv Made Clear the Limitations of YouTube
June 16, 2019
I heard there was a small protest underway in Hong Kong. The time is now 6 30 am US Eastern time. I navigated to YouTube, entered the query “Hong Kong protest”, and I saw links to videos from a day ago (today is June 16, 2019). I navigated to the YouTube “Live” page which provides a limited selection of streaming videos on YouTube. If you have not seen that somewhat incomplete index, navigate to https://www.youtube.com/live. No live stream of the Hong Kong protest.
If it’s not on YouTube, then it doesn’t exist, goes some old times’ catchphrase.
Well, not quite.
Navigate to Amazon’s Twitch.tv. Run a query for Hong Kong. Here’s what I saw before I clicked on the live stream of Unable to Breath.
Amazon Twitch.tv search result. The Unable to Breath stream is not one but an aggregate of eight separate feeds from Hong Kong.
Front and center was a link to Unable to Breath, which presents this streaming image:
This is a screen shot of a single screen which is eight different feeds showing different views of the handful of people who are participating in the event. Note: Handful means more than one million.
Notice that three are eight live streams of this modest protest. This is one live stream with eight separate views of the modest demonstration in Hong Kong. Eight in one stream! No registration required. No in stream pop up ads. Just high value intelligence in pretty good streaming video quality.
Cyber Tools Diffuse Globally
June 16, 2019
Ever heard of Project Raven? Probably not, unless you are an enemy of United Arab Emirates (UAE). This team of highly-skilled hackers was made up of former NSA spies working for the Middle Eastern monarchy. But when they were asked to spy on fellow Americans, the story broke wide open, as we discovered in a recent NewsMax story, “Former NSA Cyberspies Reveal How They Helped Hack Foes of UAE.”
According to the story:
“Surveillance techniques taught by the NSA were central to the UAE’s efforts to monitor opponents. The sources interviewed by Reuters were not Emirati citizens…The operatives utilized an arsenal of cyber tools, including a cutting-edge espionage platform known as Karma, in which Raven operatives say they hacked into the iPhones of hundreds of activists, political leaders and suspected terrorists.”
This may seem like an oddity, a bunch of cyberspies working for a rich country, potentially against the best intents of America, but it’s not. There has been a strange rash of intelligence issues like this recently, such as the Air Force officer who defected to Iran with damaging information. Is this a growing trend or just an odd sequence of events?
Patrick Roland, June 16, 2019
HP-Autonomy and the KPMG Due Diligence Document
June 15, 2019
I noted this article in The Register, a UK online publication: “HP CFO Cathie Lesjak Didn’t Even Read KPMG’s Autonomy Due Diligence Before $11bn Biz Gobble.” The write up reports that Hewlett Packard professionals did not read a report about Autonomy prepared by the accounting and consulting services firm KPMG. DarkCyber finds the information in the article interesting. We noted this statement in the Register’s write up:
Barrister Robert Miles QC asked her: “I think you didn’t, yourself, read a due diligence report prepared by KPMG, is that right?” Lesjak replied: “I did not.”
As intriguing as this exchange between Autonomy’s attorney and an HP executive involved in the astounding $11 billion purchase, the Register provides a link to the “confidential” and “draft” report about the finances of Autonomy.
The document is available at this link. Note: that confidential documents can be removed from public access at any time. DarkCyber, an organization with more time but fewer resources than HP, read the document online.
DarkCyber’s conclusion is that HP’s failure to read the KPMG draft deprived the HP executives of information germane to the purchase price of $11 billion.
Other items of interest to DarkCyber in the KPMG document dated August 9, 2011, were:
- KPMG itself lacked access to certain information; for example, certain details related to Autonomy’s income taxes
- Autonomy’s financials (top line revenue and profits) were softening after the $870 million in revenue reported in FY2010
- Autonomy used a method known as “Tower” in order to achieve certain financial objectives; namely, obtain maximum financial benefits from its activities such as loans.
The KPMG report is a “draft” and its authors presented sufficient information (even though that information is incomplete) to call into question the purchase of Autonomy for $11 billion.
The deal did not work out for either HP or Autonomy. HP lost traction with its shareholders. Autonomy found itself mired in an unpleasant and highly visible legal battle.
DarkCyber’s view is that companies engaged in search, retrieval, content processing, and allied disciplines have an unusual track record. For example, a number of little known companies simply failed to meet their revenue objectives and went out of business. Examples include Delphes (Canada), Entopia (Israel), InQuire, and others.
Other firms engaged in Autonomy-type software and services sought buyers in order to avoid financial problems. Examples include Exalead (acquired by Dassault), Vivisimo (acquired by IBM), and others.
Convera and Fast Search & Transfer are examples of enterprise search and Autonomy-type services caught in the same business quagmire as Autonomy; that is, robust promises about technology, difficulties generating sustainable revenue, problems in satisfying customers, and problems controlling infrastructure, R&D, and customer support costs. Convera (once Excalibur) was rescued by Allen & Company but was unable to deliver satisfactory solutions to information processing needs at Intel and the NBA. Fast Search & Transfer was involved in a financial investigation related to the company’s balance sheets. Microsoft stepped in and bought Fast Search in 2008.
Most of these problems with Autonomy-type companies stemmed from a combination of these miscalculations, errors in judgment, or over optimistic marketing:
- Search and retrieval is difficult to define; therefore, whatever system is installed at an organization will disappoint most of a system’s users. For this reason, large companies have a specialized system for legal, one for bench chemists, one for marketing, etc. Due to disenchantment, competitors can make a sale only to face clamors for engineering fixes or termination of the contract. Sustainable revenues are, therefore, a characteristic of Autonomy-type companies. (The KPMG report makes clear that Autonomy relied on acquisitions to increase its top line revenue.)
- Enterprise search vendors typically over promise and under deliver. Sales professionals and marketers glibly explain the value of unlocking the hidden value of an organization’s data. The reality is that the costs of determining what data are available, who can view certain data, cleansing and validating that data, indexing the data, and then keeping the indexes up to date and in line with access privileges is a significant burden. The cost of “unlocking’ exceed the available resources and appetite for investment in many licensees of Autonomy-type search systems. (The KPMG rolls these costs into undifferentiated line items, a serious omission. These costs help explain the “you can’t get there from here” problem inherent in Autonomy-type software.)
- Autonomy-type systems from the period covered in the KPMG report were mostly proprietary code. Over time, these code bases became increasingly complex and at the same time more fragile. As a result, the costs of standing up a system, fine tuning it, and then tailoring it to the needs of the licensee grew over time. Like the content preparation work in item 2, the ongoing costs of the Autonomy-type system added another set of hard to control costs. (The KPMG report does not provide detail related to the costs of triage engineering to fix urgent problems, on-going fixes, and work needed to keep the foundation system current with competitors’ innovations.)
There are other issues with the KPMG which DarkCyber noticed.
Net net: KPMG did a good job making clear that the deal was likely to be a difficult one due to the tax methods, the intra company financial processes, and the mechanisms used to allow Autonomy to demonstrate growth and reasonable margins over the period of time covered by the KPMG professionals.
HP seemed oblivious to the issues “enterprise search” posed; specifically, enterprise search is a niche business delivering expensive, proprietary solutions which rarely satisfy its users regardless of the vendor involved.
HP wanted to buy and buy big and fast. Autonomy appeared to be the solution to HP’s problems. KPMG identified the issues. Impulse buy? Maybe. Uninformed buy? Looks like it. Did Autonomy buff its show car software? Of course, getting the customer to buy is the objective.
Profiles of selected Autonomy-type software vendors are available without charge at the Xenky.com Vendors Web page. You can find that collection of vendor profiles at this link.
Stephen E Arnold, June 15, 2019
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