Education: Is the Future in the Hands of Google Type Companies

January 15, 2020

I spotted a news item which would not be fodder for either this blog or our DarkCyber video program. Then one of the research team emailed me a link to an apparently unrelated article. Then it struck me: The future of education is probably going to be ceded to big companies and sources of revenue which may have interesting avocations.

Let me explain.

The first news item reports that “US Colleges Struggling with Low Enrollment Are Closing at Increasing Rate.” The article, from a source with which I am not familiar, asserts:

For 185 years this college campus in Vermont was teeming with students. Now it sits empty. In January, the school announced it would be closing. ‘I’ve had a very long professional career. It’s the hardest thing I’ve ever had to do – to stand in front – in our auditorium with 400 people and telling principally students, but faculty and staff, that we wouldn’t be opening this fall,” said  Bob Allen, President at Green Mountain College.

Sure enough. The institution is a goner.

Then the article which I spotted but decided was not suitable for this blog. Its title? “UVM Gets $1 Million from Google for Open Source Research.” The write up from the delightfully named WCAX asserts:

The unrestricted gift is to support open-source research. Open source is a type of computer software, where source code is released under a license, and the copyright holder grants users the rights to study, change, and distribute the software to anyone and for any purpose.

We know that august institutions like the Massachusetts Institute of Technology will deal with individuals of questionable character when the cash pay off is big enough.

Let’s assume these items are accurate. Now let’s look into a future in which universities become increasingly desperate for money.

Who will provide the dough?

Answer: People who have the money and have a need.

Why? Let me suggest a few reasons:

  1. Access to lower cost talent
  2. Opportunity to recycle research into commercial products
  3. Force students to “like” big companies. See “‘Techlash’: Positive Perceptions of Facebook, Google Crumble on Campuses.

So who owns what the grant money generates, particularly if the output is open source? What happens if Amazon uses Google funded open source as part of its platform? Who determines how the money is used or, in the case of MIT, how its origin is obfuscated? Is academic R&D a more efficient way to generate innovation?

Net net: The financial situation is likely to lead to the equivalent of corporate naming rights to NFL football stadia. And if you don’t like, don’t attend.

Stephen E Arnold, January 15, 2020

Qatalyst Autonomy Presentation 2

January 14, 2020

DarkCyber spotted a link to a second presentation apparently prepared by Qatalyst Partners prior to Hewlett Packard’s purchase of Autonomy in 2011. This second slide deck covers:

  • Historical trading performance and related financial data
  • Shareholder ownership
  • Comparative financial data; for example, Google, Oracle, HP, and other firms.

If you want to check out the first Qatalyst Autonomy presentation, you can find that document at this link. You may be able to locate other Autonomy documents via some scouting around on the Vdocuments.mx site.

These documents are almost a decade old, but they provide useful information for anyone considering an investment in or purchase of an organization engaged in enterprise search and text analysis software.

Documents like these provide some of the factual foundation we use in our reports and analyses. It is far easier to talk about the revenue potential of search and text processing. It is far more difficult to generate sustainable revenue and growing profits.

Why?

The reasons include:

  • Ignoring the highly particularized nature of search and text analysis; that is, one size fits all doesn’t, so expensive, one off tailoring is required
  • Making a search or text analysis sale is time consuming. The reasons range from “we have been burned before” to “this got the previous information people fired.”
  • Keeping the search and text analysis system up and running is expensive.
  • Staying competitive is very expensive. Innovation is easy to talk about but difficult to deliver.
  • Growth requires acquisitions, and these just add to the cost of dealing with the technical debt the acquirer has to generate money to pay.

Net net: Documents like these are useful and often difficult to obtain.

Stephen E Arnold, January 14, 2020

Spain Wants to Tax Google

December 12, 2019

International agreements about taxing corporations are complex. Spain, like France, is not kicking back and letting the status quo prevail. El Pais (paywalled, gentle reader) reported that Spain is planning on going ahead with Google tax despite US tariff threats. You can access the story and the paywall block at this link.

The newspaper stated:

After US President Donald Trump threatened to impose tariffs of up to 100% on French products, on Monday the EU closed ranks, announcing that it would respond “united” to a measure of this kind.

How much would companies subject to the tax have to pay? Think in terms of three percent.

When will the tax become more than terrace talk? As soon as Spain formulates its new government. Or mañana.

Stephen E Arnold, December 12, 2019

China: Marketing Blockchain

December 2, 2019

For two decades, China has been referred to as a sleeping dragon due to its growing economic prominence. China has yet to overtake the United States as the world’s top economic power and there are many reasons for this. One reason is China’s authoritarian government and another is the country’s substandard business practices. Lying is an international business tool, but one is more likely to be held accountable in the US than China. The International Business Times shares one of China’s newest tall tales, “China’s Blockchain Tech Adoption Inflated? New Expose Reveals Truth Behind Tall Claims.”

As part of China’s desired economic dominance, President Xi Jinping wants his country to be a leader in computer technology, such as blockchains. Xi wants blockchain technology adopted into commercial, economic, and industrial practices, but most Chinese companies that claim to offer blockchain do not.

“According to the Global Times, which is a Chinese state-run media house, numerous companies in China seem to find it simpler to claim that they are utilizing blockchain technology than to truly practice its application. Various Chinese firms across a variety of industries reportedly state that they are employing the use of blockchain tech in some form or another, but lack real evidence to prove that they are doing so. Global Times in their expose report that out of over 3,000 registered businesses, about 500 firms claim to be incorporating blockchain tech in their day-to-day operations, but only about 40 of these companies have been able to demonstrate that they are actively doing so.”

One of China’s problems is that when the government makes demands, the people are forced to adapt or else. Companies say they are harnessing blockchain technology to appease Xi and other leaders, but also to appeal to clients due to its buzzword power. Another problem in China is the amount of “get rick quick” scams. All Chinese industries are loaded with them and due to the country’s lack of checks and balances, they are a lot easier to run. The National Emergency Center of China states there are 755 tokens in the Chinese crypto currency market (crypto currencies use blockchain to operate) and 102 are believed to be Ponzi schemes, while most of the crypto currencies do not have funding.

China’s government, corrupted businesses, and other factors are keeping the sleeping dragon in a long doze.

Whitney Grace, December 2, 2019

Open Source Goodness? Not So Fast

November 18, 2019

DarkCyber does not have a dog in the fight. Open source software has been an interesting sector. However, there may be some tension in open source land. If you have a stake in open source software, you will want to read “Venture Capital Shillscapegoating Free Software’s Failures.” I noted this statement in the article:

Venture capitalists and hireling lawyers make convenient scapegoats. The old, creaky pillars of the free software movement need convenient scapegoats, because the facts on the ground raise serious doubt about the effectiveness of their leadership and the byzantine, insular ideology of copyleft they impose. When the facts don’t help, substitute narrative. You can rule on narrative alone, at least for a while.

Free software has found its way into some interesting products and services. Some of these are backed by big money; for example, LucidWorks, Palantir, and even IBM Watson.

So what?

No answers shall be forthcoming from DarkCyber. You, gentle reader, are on your own to ponder the Amazon open source plays, the future of proprietary software stripped of open source goodness, and venture firms betting that the “community” will keep on being communal.

Stephen E Arnold, November 18, 2019

Apple News: A Lesson to Be Repeated?

November 15, 2019

Many years ago, there was an online service called Predicasts. The company had offices in Cleveland, Ohio, a city notable for its burning river and an interesting American football team.

But in the world of online, Predicasts was famous. File 16 on Dialog would provide a summary of numerical data located in magazine and trade journal articles.

The company discussed creating its own service in order to disintermediate itself from the commercial online vendors. I assume that most of the gentle readers of this blog do not recall Dialog Information Services, SDC, ESA Quest, and other online intermediaries. Don’t worry. I can’t remember these gatekeeper companies. Think of these outfits as the equivalent of today’s cable companies. Instead of providing access to the vast wasteland of television, users paid to look at commercial databases like Predicasts.

The anecdotal evidence which filtered to me was that Predicasts wanted to set up its own online service. But the hurdles were technology, marketing, and the lack of information about the power of the brand. Predicasts online service went no place or, at least, no place that moved the needle in the online world.

Lesson: Online was hard in the 1980s. Online is hard today. Especially when one wants to make oodles of money.

There’s a lesson here, and it is one that Apple is now trying to understand. “Apple News+ Has Struggled to Add Subscribers Since First Week of Launch in March, Sources Say” makes clear that after the “must have” subscribers signed up, others (the “we don’t care” crowd) have stayed away.

The write up states:

Apple signed on 200,000 subscribers to Apple News+ in its first 48 hours in March, but has been stuck in neutral since that time, according to people familiar with the matter.

What does this tell us?

A bunch of customers are not interested in certain types of information when it costs more and requires extra steps. These steps can be tiny, but the anti step barrier is formidable. The costs more problem is different. Price cuts will not significantly increase sign ups.

The Predicasts’ thought process may be a precursor to what Apple assumed; that is, “We are so big, lots of people will sign up.”

Nope. They won’t.

That’s the problem online presents. A monopoly has to extract revenue in a number of ways, preferably selling something like a mobile phone and a big, juicy bundle of extras as part of the deal. Another approach to wait until there are no other choices, and then introduce a text centric online service that forces those who don’t want to pay to cross over into the “okay, we will pay” zone. There are other angles as well.

But the point is: Text requires mental effort to consume. Who wants to pay for extra work. Must have information is different. No one has a choice. A lawyer has to pay to see some data. A doctor has to pay to keep up with some medical information.

News? Maybe a broker, but there is Bloomberg, Factset, and other specialists.

General news?

Apple’s lesson is that more work is needed. The MBA assumptions, the nifty Keynote decks, and the confidence of a big sleek company—obviously wrong. Back to school and repeating a grade to catch up on what was missed the first time through the course.

Stephen E Arnold, November 15, 2019

Tech Giants: Victims!

November 13, 2019

Were you caught off guard by Google’s announcement that it was jumping into personal finance? You can get the details in “Google to Offer Checking Accounts in Partnership with Banks Starting Next Year.”

What about those wizards at Facebook? That outstanding commercial enterprise Facebook at its post-Libra Facebook Play service. You can get the public report in “Facebook Pay Is a New Payment System for WhatsApp, Instagram, and Facebook.”

Apple’s credit card has inspired some laggards to get serious about getting into the cash transaction business and getting quite fine grained details about their “customers.”

But these firms are just doing what is part of their DNA. Mere surfers of the Internet’s big waves of opportunity. The Sydney Morning Herald reports one executive’s defense in, “Tech Giants Alone Can’t Be Blamed for Online Misinformation: Google.” That company’s VP of news Richard Gingras says policy makers and traditional media companies share the blame for the spread of fake news and other toxic content. Writer Laura Chung reports on an interview with the executive:

“Mr Gingras said digital platforms have a responsibility to ensure they are not ‘enabling amplification of bad information’. But the challenge is not specific to one tech player and is a ‘societal problem’.

For example during the Christchurch massacre, in which 51 people died, Google scrambled to remove millions of copies of the video from YouTube. But traditional media coverage of the incident drove people’s interest in it, causing them to search and repost it, he said. Following the massacre the Australian, New Zealand and British governments called on digital platforms including Facebook and Google to do more to stop terrorist content from being shared online. ‘It’s one of those tricky things that all of us in our own way – in the political sphere, media sphere and tech sphere – need to recognize our degrees of responsibility in setting the right role models for behavior,’ he said. ‘What role models are we presenting to them [society] to guide people’s behaviors? And that extends to all of us.’”

That is one way to look at it—deflection is always an option, I suppose. The write-up also touches on the financial relationship between Google and Australian news publishers. Media companies would like Google to share more revenue with them, and regulators seem poised to agree. Gingras, however, expresses concern for the preservation of open markets and open channels of information. His apprehension is entirely based on the good of society,

And what about government regulators? Oh, right.

Cynthia Murrell, November 13, 2019

The Key to Millions: Enterprise Search?

November 11, 2019

I thought the world was crazier than ever when enterprise search became the focal point of a multi-billion dollar deal and a multi-year lawsuit. The open source search movement picked up steam as companies shifted their attention from proprietary search and retrieval solutions to those maintained by a “community.” Search became a utility which many information technology professionals found a Bermuda Triangle for careers.

Why?

Our research prior to the publication of the three volumes of the Enterprise Search Report I wrote and our subsequent work on next generation search solutions revealed these problems:

  1. Enterprise search implies one size fits all. Information retrieval needs vary by business unit, department, and individuals. When one pokes around a large organization, one finds numerous search and information access systems. One size? Nope.
  2. Users look for information in the enterprise search system and cannot locate it. The reasons vary, but the universal gripe is, “I can’t locate the document I just saved.” The notion of real time is not one that fits into more organization’s information infrastructure. Cost is one big reason. What looks good in a demo does not work in the “real world” of a company.
  3. Silos. The implications of “enterprise” suggest that a significant amount of information will be available to a user of the search system. Nothing could be further from the reality. Legal keeps some documents under lock and key. Personnel? The same approach. Research? No data goes out of the lab or the researcher’s workstation. On and on.
  4. Changes that are not captured. The top sales professional changes his presentation right before giving a talk to seal a big deal. The changes are not indexed because the sales professional has to do the contract. Missing info? Yes.
  5. Untracked digital information. Enterprise search has not been either quick nor adept at handling social media posts (authorized or unauthorized), interviews, videos produced in lieu of a written report, and similar information objects. Try to find key facts from these content collections. Give up yet.

I could extend this list, but I don’t have the energy. Few are interested in what caused Entopia to go out of business. No one I have spoken with in the last five years cares about why Fast Search & Transfer self destructed. No one cares.

I read “Want to Earn Millions? Launch an AI Based Enterprise Search Startup.” That’s a path to fame and riches. The write up states:

Enterprise search engines based on artificial intelligence systems are taking off fast. Cognitive search systems using NLP can include structured data contained in databases and even nontraditional enterprise information like pictures, video, sound, and machine information, for example, from the internet of things (IoT) gadgets, to bring contextual results in the actual business context.

Sounds good. How about this?

For startups and venture investing, the trend is clear. One prime example of this trend is the world’s leading space agency- NASA has enormous data ever since it was created in 1958. Now, the agency is working to make its data increasingly accessible for rocket designers and researchers. It is redesigning search and analytics abilities utilizing AI and natural language processing (NLP) systems created by a company known as Sinequa which is collaborating with the agency to deploy a worldwide knowledge management ability.

Amazing. Technologies like RECON’s which NASA helped move forward because engineers could not locate key documents is looking at technology which has wobbled from search to intelligence and back again.

A quick reality check, gentle reader, please.

One can download open source search and retrieval software and get decent results. But there are firms which have goosed the “money” in enterprise search to astronomical levels:

  • Algolia, $100 million
  • Coveo, $200 million
  • LucidWorks, $150 million
  • ThoughtSpot, $248 million.

Now let’s think about Autonomy. At its height, the company reported revenues of about $800 million. HP paid $10.3 billion. After a short period of time, HP realized its massive sales and marketing system could not generate enough new sales and sustainable revenue to keep the Autonomy business an alleged winner.

How will these companies pitching enterprise search generate sufficient revenue to pay back their investors, fund research and development, add filters and other components needed to deal with today’s content flows, and support their existing systems as licensees try to make search work like investigative software?

The answer is, “The odds are quite unappealing.”

  • Enterprise search has been available for half a century with some of the old school systems still available from OpenText in the guise of BRS Search
  • Dissatisfaction with enterprise search systems generally runs about 50 to 70 percent in most organizations with such a system
  • Costs of keeping an enterprise search and retrieval system continue to creep up despite the advent of managed services like those available from Amazon and others

Where are the customers?

That’s the question the article ignores.

Customers are likely to be just as tough to convince to use an enterprise solution as they have been for decades.

Net net: Enterprise search may not be the spring chicken the write up describes. Enterprise search has a history. And history is about to repeat itself. When the Autonomy matter is resolved, there may be be a new search drama to follow.

Keep in mind that Google couldn’t make enterprise search work. But these cash stuffed outfits can? Maybe? Well, probably not.

Stephen E Arnold, November 11, 2019

Coveo: A 15 Year old $1 Billion Start Up Unicorn in Canada!

November 6, 2019

I read “Coveo Raises US$172M at $1B+ Valuation for AI-Based Enterprise Search and Personalization.” The write up states:

Search and personalization services continue to be a major area of investment among enterprises, both to make their products and services more discoverable (and used) by customers, and to help their own workers get their jobs done, with the market estimated to be worth some $100 billion annually. Today, one of the big startups building services in this area raised a large round of growth funding to continue tapping that opportunity.

Like Elastic, Algolia, and LucidWorks, Coveo is going to have to generate sufficient revenues to pay back its investors. Perhaps the early supporters have cashed out, but the new money is betting on the future.

Coveo was founded in Quebec City more than a decade ago. The desktop search company Copernic spun off Coveo in 2004. The original president was Laurent Simoneau. Mr. Tetu is an investor with great confidence in enterprise software, and he has become the “founder”, according to the write up. In April 2018, Coveo obtain about $100 million from Evergreen Coast Capital.

DarkCyber recalls that Coveo has moved from Microsoft-centric search to search as a service to customer experience and now personalization.

In 2005, I wrote this about the upsides of the Coveo approach in the Enterprise Search Report I compiled for an outfit lost to memory:

Coveo is a reasonably-priced, stable product. Any organization with Microsoft search will improve access to information with a system like Coveo’s. Microsoft SharePoint customers will want to do head-to-head comparisons with other “solutions” to Microsoft’s native search solution. Coveo has a number of features that make it a worth contender. Other benefits of the Coveo approach include:

  • Web-based administration tool allows straightforward configuration and monitoring of the system.
  • Automatic indexing of new and updated documents in near real-time.
  • Includes linguistic and statistical technologies that can identify the key concepts and the key sentences of indexed documents. Provides automated document summaries for faster reading and filtering.
  • Groups information sources into collections for field-specific searches.
  • The product is attractively priced.
  • Tightly integrated with other Microsoft products and Windows-based security regimes.
  • Customer base has grown comparatively quite rapidly and customers tend to speak well of the product.

I noted these considerations:

The software is Windows-centric – both in terms of its own software as well as document security settings it tracks – which may be an issue with certain types of organizations. You will have to assign permissions to index to allow the ASP.NET worker process user to access the index. The task is simplified, but it can be overlooked. Administrative controls are presented without calling attention to actions that require particular attention. Coveo is still however able to search content on any operating system, application, or server. Other drawbacks of the Coveo search system include:

  • There is limited software development support to allow customization or extensions of the core technology to other applications, although the company is expanding the product’s reach through Dot Net-based APIs.
  • When the system is installed and its defaults accepted, the “Everyone” group is enabled. Administrators will want to customize this setting. A wizard would be a useful option for organizations new to enterprise search.
  • No native taxonomy support, except through partner Entrieva.
  • Achieving scalability beyond hundreds of millions of documents requires appropriate resources.

My final take on the company was:

Coveo Enterprise Search meets many distinct needs of the small and medium-sized business that has standardized on the Microsoft platform, while still providing a few critical advanced search capabilities. Perhaps more importantly, CES minimizes search training, system maintenance, and other cost “magnets” that typically accompany an enterprise search deployment.
Like a handful of other products in this report, you can test Coveo out first, via a free download of a document-limited version.

The challenge for Copernic is to make enough sales and to generate robust sustainable income. This is the uphill run that Algolia, Elastic, LucidWorks, and probably a number of other enterprise search vendors face. Perhaps an outfit like Xerox will buy up, which would be one way to get the investors their money?

DarkCyber wishes Coveo the best. But a start up unicorn? No, that is not exactly correct for a 15 year old outfit. This push to make the investors smile is not for the faint hearted or those who have a solid grasp of the formidable enterprise search options available today. Plus there are outfits like Diffeo and other next generation information access systems available for free (Eleasticsearch) or bundled with other sophisticated information management tools (Amazon, search, managed blockchain, workflows, and a clever approach to vendor lock in.)

One tip: Don’t visit Quebec City in February during a snow storm.

Stephen E Arnold, November 6, 2019

Stephen E Arnold, November 5, 2019

Economists: The Borjes Approach

October 28, 2019

Now this is a source among sources: Epoch Times. DarkCyber is not equipped to identify the information in “Krugman Admits He and Mainstream Economists Got Globalization Wrong.” One point in the write up evoked memories of a college course when I was a callow youth; to wit:

the consensus economists failed to measure adequately and properly account for the impact of globalization on specific communities, some of which were disproportionately hit hard. This despite the fact that models predicted, and figures later showed, that free trade was a net gain in terms of both jobs and wages in the broader American economy. Generalized gain but localized pain.

There you go. Better for everyone. Not so good for some others.

In business, the technology magnets are doing fine. Local retail shops, not so fine. Some countries are chugging along. Others seems to be shifting into riot mode. Planning a trip to Bogota, Lima, or Paris for a three day week end soon?

What about that college economics class through which I sat asking such questions as, “What is this professor talking about?” and “Have I awakened in a short story by Jose Luis Borges?”

Maybe the Epoch Times is neither wrong nor right about Paul Krugman? Paradoxical thoughts have legs in the online world. What’s real and what’s fake? Think of those riders in the wasteland in front of what seems to be a mountain range. Borges did and look what that earned him.

Stephen E Arnold, October 28, 2019

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