April 24, 2015
Short honk: I read several articles about the financial reports of Facebook, Google, and Yahoo. I enjoyed the explanations about the revenues and profits. Here are the write ups open on my desktop monitor at this moment:
- “Despite Headwinds, Analysts See Even Larger Facebook Upside Into 2016”
- “Google Caps Costs as Growth Slows” for which you may have to pay to read.
- “Yahoo Q1 Results Miss Expectations on Both Lines”
Is there a message to be decrypted from these data? Yep.
Stephen E Arnold, April 24, 2015
April 21, 2015
I read “IBM Sales Fall for 12th Quarter, Currency Weighs.” Nary a word about Watson. I then read “IBM Operating Profits Rise, but Strong Dollar Takes Toll.” Again a subject about which I sought information was not included. (The New York Times, April 21, 2015, business section, dead tree edition).
I learned that mainframes are still selling. I learned that not much else is selling. But the fact I wanted was missing.
I must conclude that sales of Watson’s cook book are not sufficient to bolster IBM’s financial results. Maybe next quarter along with Watson Health’s revenues.
One fact did stick with me. IBM has reported revenue declines for three years in a row. What advice does Watson offer? Also not reported. I hear a voice whispering, “Patience, grasshopper.”
Got it. Patience.
Stephen E Arnold, April 21, 2015
April 8, 2015
When a bean counter tallies up the cost of an enterprise search system, the reaction, in my experience, is, “How did we get to this number?” The question is most frequently raised in larger organizations, and it is one to which enterprise search staff and their consultants often have no acceptable answer.
Search-splainers position the cost overruns, diminish the importance of the employees’ dissatisfaction with the enterprise search system, and unload glittering generalities to get a consulting deal. Meanwhile, enterprise search remains a challenged software application.
Consulting engineers, upgrades, weekend crash recoveries, optimizing, and infrastructure hassles balloon the cost of an enterprise search system. At some point, a person charged with figuring out why employees are complaining, implementing workarounds, and not using the system have to be investigated. When answers are not satisfying, financial meltdowns put search vendors out of business. Examples range from Convera and the Intel and NBA matters to the unnoticed death of Delphes, Entopia, Siderean, et al.
Search to most professionals, regardless of occupation, means Google. Bang in a word or two and Google delivers the bacon or the soy bean paste substitute. Most folks do not know the difference, nor, in my view, do they care. Google is how one finds information.
The question, “Why can’t enterprise search be like Google?”
Another question, “How can a person with a dog in the search find search-plain; that is, “prove” how important search is to kith and kin, truth and honor, sales and profit.
For most professionals, search Google style is “free.” The perception is fueled with the logs of ignorance. Google is providing objective information. Google is good. Google is the yardstick by which enterprise search is measured. Enterprise search comes up short. Implement a Google Search Appliance, and the employees don’t like that solution either.
Inside an organization, finding information is an essential part of a job. One cannot work on a report unless that person can locate information about the topic. Most of the data are housed in emails, PowerPoints, multiple drafts of Word documents stuffed with change tracking emendations, and maybe some paper notes. In some cases, a professional will have to speak face to face or via the phone to a colleague. The information then requires massaging, analysis, and reformation.
Ah, the corporate life is little more than one more undergraduate writing assignment with some Excel tossed in.
April 3, 2015
Here’s the passage I noted:
An Oak spokesman was just learning about the SEC charges when contacted by Fortune, and did not yet have any comment. Among the open questions not only are if Ahmed will be a partner on the future fund, but also if he’ll remain a board member with existing Oak portfolio companies like Attivio Inc., Circle Financial Kenet LLC and Nomorereack.com.
I have mentioned that firms requiring repeated injections of venture funding are under considerable pressure to produce returns. I find it interesting that Attivio, founded by former executives at Fast Search & Transfer, had a board member who allegedly requires investigation. I wish to note that Fast Search was investigated by Norwegian authorities, and John Lervik, the founder, was saddled with formal punishment.
Attivio is a variant of Fast Search’s aspirations to deliver an enterprise wide unified information access platform. Dr. Lervik and his team had the ability to see what enterprise customers wanted. The technology fell short of the mark and some fancy financial dancing ensured. Attivio’s founders left Fast Search before the investigation spooled to high RPMs.
Search remains a difficult sector in which to produce the types of returns venture firms and angels expect the investments to generate. Is the SEC investigation an indication that extra ordinary measures are required to make some of the these investments pay off?
My view is that it is desirable to offer a product that customers want to buy, grow by making sales, and avoiding the lure of geysers of venture capitalist money. Others have a different view. That makes horse races. Who would try to fiddle with a horse race? Good question in Kentucky.
I wonder if any of the Fast Search team are on the Attivio Board of Directors.
Stephen E Arnold, April 3, 2015
March 12, 2015
Business intelligence, a close cousin to cyber intelligence, continues to capture venture funding attention. “BI Startup Looker Notches Up $30M Injection for Expansion” reports that Looker has more than 250 customers up from 40 in 2013. According to the write up:
The web-based Looker platform, mainly deployed in the cloud, uses proprietary SQL-based modeling language LookML and allows data analysts to give business users the ability to explore large data stores themselves instead of depending on standard reports.
The article includes this article:
“Most business intelligence is about, ‘Hey, data guy give me this set of data so that I can get an answer’. What Looker is doing is giving those data people tools they want to use – code-based tools, GitHub-integrated, all that kind of stuff – so that they can curate experiences for the business users, much like the early web developers and web masters were doing,” he [Frank Bien, CEO] said.
The service includes collaboration functions, data fusion, and an easy-to-use interface. More information about Looker is available at www.looker.com.
Stephen E Arnold, March 12, 2015
March 9, 2015
What happens when a company founded by former Fast Search & Transfer executives do? Attivio took a reasonable path:
- Present the company’s mash up of open source and proprietary code as a report generator that answered questions
- Put search in a subordinate role to the report output
- Bang the drum about the upside of the approach in order to attract millions in venture funding
- Replace the Fast founders with hardier stock
- Unveil the new Attivio as a Big Data and Discovery platform.
The transformation took from 2007 until I read the official announcement in this write up “Attivio Previews Big Data Profiling & Discovery Platform at Strata + Hadoop World 2015.”
The question is, “Will the Fast DNA go gently into the good night?” My hunch is that Attivio’s founders realized that search was not the killer app. Fast Search during its spectacular implosion learned that talking about a “platform” was different from delivering a functioning platform.
Attivio tried to avoid that error. According to the write up:
Attivio, Inc., the software company reinventing enterprise search and Big Data discovery, today announced that it will showcase its new Big Data Profiling and Discovery Platform at Strata + Hadoop World 2015. Demonstrations of the Big Data Profiling and Discovery Platform will take place at booth #1136 in the main exhibit hall.
After eight years in business, some stakeholders may be looking for a solid payback. With the discovery and Big Data market choked with companies offering knock out services, Attivio may face some challenges.
One of these is the fact that Hortonworks, one of the cheerleaders for Big Data systems based loosely on Google’s approach from 2002 and 2003, missed its revenue target. If “Hortonworks Q4 Misses on Revenue” is accurate, the Big Data market could be one of those fanciful confections that enthrall pundits, mid tier consulting firms, and former enterprise search wizards.
Hadoop is morphing into other types of software. For me, this looks like a reprise of the Fast Search strategy: Start with something familiar and then add software widgets until people start to buy. Once a deal is closed, assemble the solution. Rinse and repeat.
What could go wrong?
Stephen E Arnold, March 9, 2014
March 8, 2015
I read an interesting statement about financial forecasts in “Investigator Was Told Women Made More Money for Kleiner.” Keep in mind I am not sure about the accuracy of information disseminated in the course of legal proceedings. One has to be there and be part of a legal team involved in the matter to get a sense of the “truth.”
Attorney Stephen Hirschfeld, hired by Kleiner, Perkins, Caufield, and Byers to probe allegations of discrimination against the firm, testified in a San Francisco courtroom today that then-partner Trae Vassallo had run the numbers on both male and female partners. According to her calculations, the women came out ahead of the men in multiple measures of profitability. Even so, the men forecasted higher revenues for their investments than the women, Hirschfeld said Vassallo told him.
I have highlighted the assertion/factoid that caught my attention. It would seem that the wild and crazy estimates about the revenue from search and content processing investments cut across gender. For example, there are the folks at Attivio, BA Insight, and Coveo who have to generate sustainable revenue and healthy profits for their stakeholders. But these outfits’ estimates pale in comparison with the billions IBM Watson will spin in the time it takes to get a stack of pancakes at IHOP. Isn’t IBM’s chief estimator a female?
Stephen E Arnold, March 8, 2015
February 26, 2015
I read “Could IBM Really Function with Tens of thousands Fewer Staff?” I think this is an interesting headline. It contains an assumption that IBM is indeed functioning with its present staffing levels.
The write up moves blithely forward offering up:
According to a recent report from India, IBM reduced its India-based workforce from about 165,000 in 2011 to 113,000 in 2014. The report quoted sources close to IBM’s plans who said this number will fall to 100,000 in 2015. The introduction of modern technologies that make services less labor-intensive is reducing the need for staff in lower-cost locations. At the same time, IBM, like much of the industry, is trying to move away from linear business models based on the provision of full-time equivalents. And talk of IBM cutting swathes of staff is nothing new. In 2010 a senior HR executive at the company told Computer Weekly’s then sister publication, Personnel Today, that IBM was looking into the possibility of cutting its workforce by almost 300,000. He said the strategy would involve making people redundant and rehiring them on a project-by-project basis. It would have reduced IBM’s 399,000 workforce to 100,000 by 2017.
IBM’s global employee count fell for the second year in a row, the first two year decline since 1993-1994. Even before the 2015 firings, IBM reported 379,592 employees at year end 2014, down 12% year on year (3.9% excluding divestitures). But there are allegedly 15,000 job openings, IBM claims.
Lots of figures. Lots of people. But let me go back to the word “functioning.” IBM, like HP, has been around a long time. The company’s notion of agility is to market wild and crazy ideas with zest. I see Watson as an example of the new IBM. Open source technology and home brew code. The search system is presented as a “basket brand” into which many different and discrete products and services have been gathered.
The challenge remains. The company has to generate sustainable revenue that yields a profit. So far that seems to be very difficult. I struggle with the “functional” assumption. Perhaps Watson has the answer?
Stephen E Arnold, February 26, 2015
February 25, 2015
I am no financial whiz kid. I read “Hewlett Packard Shares Take a Beating on Poor Sales.” Even I was able to figure out that “HP’s corporate business struggled in the first quarter, dragging down overall revenue.”
What’s the fix? Splitting the company, getting a windfall, and retiring? Chasing Autonomy’s founder with more enthusiasm? Promising big revenue from a future German deal?
My hunch is that HP is struggling with three issues for which there is no silver bullet solution. First, the company just looks as if it is going through management motions without generating the payoffs MBAs are so darned confident that are a natural consequence of their thinking.
Second, HP is a big company with considerable friction. Good ideas are difficult to pursue with alacrity. Compared to other behemoths like GE, HP looks sluggish. A corporate couch potato perhaps?
Third, the notion that nifty new technologies are in HP’s bag of tricks is silly. When I run a query for Autonomy, for example, I see numerous appeals for consultants to tackle projects. You can track this yourself on my Overflight page for Autonomy.
For my CyberOSINT monograph, I asked one of the law librarians assisting me with research to send the draft to HP’s designated contact point for comments and suggestions. Guess what? No one responded. No easy fix when people designated as a contact point do not respond to an inquiry. Nuff said. (Notice that I don’t think the value of the dollar is a root issue.)
Stephen E Arnold, February 25, 2015
February 17, 2015
If I were working, I would try to hit my goals. One of the takeaways from my years at Halliburton Nuclear Services was that selling big deals was generally preferable to selling little deals.
IBM seems to have a deal scale problem with Watson. Here’s a possible illustration of what I call “spreadsheet fever.”
Navigate to “Elemental Path Debuts The First Toys Powered By IBM Watson.” The article explains that an IBM partner is using Watson make toys smarter. I recall the toys I had as a child: a wooden car, a ball, and eventually a cheapo chemistry set. (I was able to use the chemistry set to create some wonderful, persistent odors until my mother nudged me toward physics and math.)
The write up points out that “none of the co-founders have kids themselves, they believed in this idea of “connected” toys to both entertain and educate children.”
Okay, no problem.
My reaction to this effort is that it is a good PR generator. A spreadsheet jockey can set up a model that makes clear how much money will flow from a pet rock or beanie baby type hit.
For me, I fear that Watson is unlikely to generate sufficient revenue to sustain the financial hopes and dreams of IBM.
Here’s a statement from an Alliance@IBM contributor:
I’ve decided to RA IBM! Yes, you read that right. Henceforth, in every case and every way, I’m going to RA IBM. That means whenever there’s an opportunity to weigh in on whether products and/or services should be from IBM or anyone else, I will vote for the anyone else. And when IBM products and/or services are already entrenched in my environment, I will do everything in my power to convince any powers that be that they could – and should – be doing better with solutions other than IBM’s. In other words, I will be rating IBM a 3 or less everywhere I go, and RA’ing their backside. Why? Well, first off, their products and/or services *are* 3-(or worse)-worthy. As a former IBMer, I have inside information on how poorly they treat their employees, and there’s just no way that people being treated thusly could produce goods and/or services of the quality and commitment to every customer’s success that happy employees elsewhere could. As a matter of fact, I wouldn’t blame IBM employees for intentionally sabotaging IBMs plans, albeit in subtle ways that slowly ground their operation to a halt. Surely, hell hath no fury like the employee scorned. But there’s another reason: IBM is *old*. Yes, I’ve decided to discriminate against IBM based on age. “What’s good for the goose..”, right?
That may be a question for Watson. Just access Watson via the Cognitoy product of your choice. I quite like the green ones. That’s “green” for the oodles of revenue Watson will generate from toys, tamarind barbeque sauce, and, of course, curing cancer.
Isn’t Lucene, home grown scripts, and some IBM magic a rocket fuel for revenue? Watson, would you answer?
Stephen E Arnold, February 17, 2015