Big Data: Cost Control May Be a Challenge

December 24, 2018

I read “AI’s Dark Secret? A Desire for Data.” The write up states:

The AI revolution is hungry for personal data.

Those data come with a catch.

To ensure that AI algorithms work properly and to get the bugs out, they need to fed a consistent stream of data. The data needs to be reliable, accurate, and objective and that costs a lot of money. Venture Beat shares how data has a downside in the article, “Could Data Costs Kill Your AI Startup?”

AI startups that discover their funds are chipped away by data costs should consider moving that cost from the research and development line to the costs of goods sold column. The article explains it is a golden opportunity to scale up your company, drive costs down, so that margins will increase.

Startups use data in three basic ways: acquiring, storing, and annotating the data to train the algorithm model. All these steps cost money and can tack on more expenses based on what resources and services you offer. There are different ways to scale down costs at each of the steps, but how and what depends on your individual project. The best way is to figure out how to optimize not only your costs, but also all of your tools:

“The first successful AI businesses came to market offering AI-free workflow tools to capture data that eventually trained AI models and enhanced the tools’ value. These startups were able to achieve software margins early on, since the data and AI were secondary to the startup’s value proposition. As we move to more specialized applications of AI, however, the next wave of AI startups will face higher startup costs and will require more human labor to provide initial value to their customers, making them resemble lower-margin services businesses.”

The only fact you can be sure of with your AI startup is that costs will continue to rise. In order to maintain your relevancy and sell your product, figure out how you can make the most of everything available to you.

Whitney Grace, December 24, 2018

Facebook: WhatsApp and In App Payment

December 22, 2018

I noted two developments which Facebook may roll out.

The first is the story in Newsweek “WhatsApp Child Porn Groups Exposed.” WhatsApp is an encrypted messaging service. As pressure on “old school” Dark Web sites continues to escalate, bad actors are looking for new, easy ways to communicate, share, and locate information that is of interest to them. Encryption, according to many investigators, allows bad actors to go dark. The authorities are, therefore, blind to potentially useful information. The write up suggests that Facebook is taking some action. The article said:

Facebook said working with police may be their best option to combat the material.

The second item concerns transacting, buying, and selling within WhatsApp. I noted “Facebook Explores Blockchain Tech For WhatsApp Money Transfers.” According to the write up:

 

In an effort to help WhatsApp users transfer money, Facebook is reportedly creating a digital currency. Unnamed sources told Bloomberg that the company is at work on a stablecoin, which is a cryptocurrency tied to the value of the U.S. dollar, and is reportedly eyeing India’s remittance market.

How quickly will bad actors interested in salacious or illegal content embrace Facebook’s vision of seamless buying and selling?

I would suggest quickly if the system sort of works.

With Facebook’s record of fine tuning its digital compass, WhatsApp could become the new Dark Web.

On the other hand, maybe Facebook will create a positive, uplifting union of services. Yep, maybe.

Stephen E Arnold, December 22, 2018

2019: Another Cycle of IPOs?

December 7, 2018

With so much money constantly flying around Silicon Valley, it’s no surprise that venture capitalists and stock IPOs can often be the source of fraud. We never realized how simple it could be until reading a recent Bloomberg story, “Paying for Popularity Can Be Fraud.”

According to the story, anyone with a little seed money can pay someone to buy up imaginary product, so that it looks like a startup is turning record profits. Even more frightening, it can be done out of thin air:

“[Y]ou can now build valuable products—iPhone apps, crypto currencies, newsletters, etc.—at zero marginal cost, which makes this fraud much easier and more efficient to pull off: You can just give your buddy the money to buy your product and then sell it to him for that money, shuffling money in circles without having to spend any to build more products.”

Here’s an ironic idea: What if some enterprising soul turned technology against some of the more highly anticipated IPOs? Or will enforcement authorities pull off a “look in the rear view mirror” approach in the new year?

Patrick Roland, December 7, 2018

MBA Think: A Well Calibrated Ethical Compass

December 3, 2018

I read “Goldman Sachs Asks in Biotech Research Report: ‘Is Curing Patients a Sustainable Business Model?’” For a moment I thought I was on the debate team in college preparing for one of those inevitable tournaments. As part of the prep, my partner — an engaging fellow and slick talked named Nick – would meet with those also involved in the competition from my one mule college in the middle of a corn field. Great ideas were exchanged, and some of them were definitely worthy of 18 year old minds fueled with pizza, ego, confidence, and arrogance. Delightful, right?

The article triggering this moment of nostalgia reveals how the somewhat callow mind navigates possibilities in our modern world. The write up states:

“Is curing patients a sustainable business model?” analysts ask in an April 10 report entitled “The Genome Revolution.”

Like many fuzzy questions, one can make a case that there is a lot of money to be made letting a person live from drug treatment to drug treatment. Thus, prolonging life enriches the pharmaceutical firms making the life extending drug, the insurance companies (fine outfits all!), the conglomeratized health care institutions, and assorted health care hangers on and fellow travelers.

On the other hand, letting people die cuts costs. Not good unless one is betting against an individual’s survival. Las Vegas, are you listening? Perhaps Facebook will enter the health care sector. Google continues to innovate despite its failure in the eye wear and glucose monitoring sectors. But Google has not made much progress solving death. Bummer.

I suppose one could ask IBM Watson, which also has a core competence in curing cancer.

How is your ethical compass calibrated? One hopes in a way congruent with exemplars of the American way.

Stephen E Arnold, December 3, 2018

Palantir Technologies: Keeping Momentum, Job One

November 29, 2018

Hop in your time machine and think back about five years. While it feels like the olden days of horse-drawn carriages already, it was a golden age for big data analytics startups. Tops on that list for many was Palantir. Thought, today things are much different, as we discovered in a recent Cheddar video, “Why Palantir’s Valuation is Withering Away.”

According to the article:

“Not long ago Palantir Technologies was valued at $20 billion and one of Silicon Valley’s brightest tech companies. Today, the big data analytics company’s worth has been slashed to $6 billion by Morgan Stanley as it heads towards an IPO.”

Perhaps part of the lag draws from Palantir’s secrecy, considering it works for organizations like the CIA and others.

However, stakeholders and employees still have big dreams like many other Silicon Valley shop: They want to go public.

A drop in valuation and concern over whether they can ever turn a profit is starting to seriously tarnish this once golden child of the tech industry.

Beyond Search does not want to draw parallels with Autonomy or other search centric firms. Some of these outfits found that the momentum of selling sizzle was difficult to maintain in a room with open windows.

Worth watching how this financial drama plays out as Amazon gears up to become the go to provider of policeware and possibly business intelligence services.

Patrick Roland, November 29, 2018

Who Is a Low Risk Hire?

November 21, 2018

Last week, a person who did some contract work for me a year ago asked me if I would provide a reference. I agreed. I assumed that a caring, thoughtful human resources professional would speak with me on the telephone. Wrong. I received a text message asking me if I would complete questions. Get this. Each text message would contain a question about the person who sought a reference. After I hit, send, I would receive another text message.

Wrong.

I was then sent a link to an online form that assured me my information was confidential. “Https” was not part of this outfit’s game plan. I worked through a form, providing scores from one to seven about the person. The fact that I hired this person to perform a specific job for me was evidence that the individual could be trusted. I am not making chopped liver or cranking out greeting cards. We produce training information for law enforcement and intelligence professionals.

I worked through the questions which struck me as worrying more about appearing to be interested in the individual than actually obtaining concrete information about the person. Here’s an example of what the online test reveals:

image

Yeah, pretty much useless. I am not sure what “adaptability” means. I tell contractors what I want. The successful contractor does that task and gets paid. A contractor who does not gets cut out of the pool. This means in politically incorrect speak: Gets fired.

I read “Public Attitudes Toward Computer Algorithms” a couple of days after going through this odd ball way to get information about a person working on law enforcement and intelligence related work. The write up makes clear that other people are not keen on the use of opaque methods to figure out if a person can do good work and be trusted.

Well, gentle reader, get used to this.

Human resources want to cover their precious mortgage, make a car payment, or buy a new gizmo at the Amazon online store. The HR professionals are not eager to be responsible for screening individuals and figuring out what questions to ask a person like me. For good reason, I am not sure I would spend more than two minutes on the phone with an actual HR person. For the last 30 years, I have worked as an independent consultant. My only interactions with HR are limited to my suggesting that the individual stay away from me. Fill out forms or something. Just leave me alone, or you will be talking to individuals whom I pay to make you go away. I have a Mensa paralegal who can tie almost anyone in knots.

Several observations:

  1. Algorithms for hiring are a big, big thing. Why? Tail covering and document trails that say, “See, I did everything I could required by applicable regulations.” Forget judgment.
  2. The online angle is cheaper than having an actual old fashioned HR department. Outsource benefit reduction. Outsource candidate screening. Heck, outsource the outsourcing.
  3. No one wants to be responsible— for anything. Look at the high school science club management methods at Facebook. The founder is at war. Former employees explain that no one gave direction. Yada yada.
  4. The use of algorithms presumably leads to efficiencies; that is, lower costs, better, faster, cheaper, MBA and bean counter fits of joy.

Just as Apple’s Tim Cook sees nothing objectionable about taking Google’s money as Apple talks up its privacy / security commitment, algorithms make everything — including HR — much better.

Net net: I am glad I am old and officially cranking along at 75, not a hapless 22 year old trying to get a job and do a good job at a zippy de doo dah company.

Stephen E Arnold, November 21, 2018

Online Ad Fraud! Who Knew?

October 24, 2018

I read “Apps Installed On Millions Of Android Phones Tracked User Behavior To Execute A Multimillion-Dollar Ad Fraud Scheme.” Goodness, first my faith in Facebook’s data about video ad performance was eroded a tiny bit. Now there are allegations about Android app ad fraud. The write up uses the word “cabal.”

The online advertising business, in my opinion, has been a bastion of integrity. Sure, there were baseless assertions about robot clickers which depleted a competitor’s online ad checkbook. There were squishy numbers about the number of human eyeballs versus crawler clicks. And there were ads for interesting products and services which online ad vendors suggested were real, true blue commercial messages.

Yes, integrity. Online advertising. Bound at the hip.

But there is this write up in Buzzfeed which states:

But an investigation by BuzzFeed News reveals that these seemingly separate apps and companies are today part of a massive, sophisticated digital advertising fraud scheme involving more than 125 Android apps and websites connected to a network of front and shell companies in Cyprus, Malta, British Virgin Islands, Croatia, Bulgaria, and elsewhere. More than a dozen of the affected apps are targeted at kids or teens, and a person involved in the scheme estimates it has stolen hundreds of millions of dollars from brands whose ads were shown to bots instead of actual humans.

I know that it takes smart filters to verify apps in crime free locations like Cyprus, Malta, and Bulgaria. And the British Virgin Islands? Unthinkable.

But the article presents some data which suggest that a modest amount of money is in play; to wit:

App metrics firm AppsFlyer estimated that between $700 million and $800 million was stolen from mobile apps alone in the first quarter of this year, a 30% increase over the previous year. Pixalate’s latest analysis of in-app fraud found that 23% of all ad impressions in mobile apps are in some way fraudulent. Overall, Juniper Research estimates $19 billion will be stolen this year by digital ad fraudsters, but others believe the actual figure could be three times that.

Google, of course, was quick to take action. Google cares.

I am disappointed that this infinitesimal aberrations in an integrity filled business have been reported as “true” fact.

More data are needed, please. I know that Facebook and Google can explain this misguided assertion.

My goodness, manipulation of online advertising. Shocking. Shocking.

Stephen E Arnold, October 24, 2018

IBM: Watson, What Happened?

October 18, 2018

I read “IBM Surprises Investors with Quarterly Revenue Decline.” The write up states:

The company broke its three-quarter string of revenue growth with a 2 percent drop in total revenue to $18.76 billion, down from $19.15 billion a year ago.

The article pointed out:

Most notably, Cognitive Solutions revenues fell 5 percent, to $4.15 billion, against analyst estimates of $4.3 billion. That division, which includes IBM’s analytics business as well as the Watson cognitive computing platform, was pulled down by weakness in some horizontal categories such as collaboration, commerce and talent management.

Watson, what happened?

But IBM pointed out that it is starting to see “green shoots.” I think this means that growth is evident in some sectors.

IBM is a consulting company which still sells mainframes. Enough said.

Stephen E Arnold, October 18, 2018

Omnity Search: Adjusting Fast and Slow

October 14, 2018

Beyond Search maintains a file about the Omnity search system. We noted that a new white paper became available in April 2018. If you want a copy of the 42 page document, you can download a free copy at this url.

The white paper is interesting because it suggests that the current methods of finding information are “inherently biased.” Omnity’s indexing is different; for example:

Omnity has developed a semantic signature technology that impartially and mathematically articulates the deep structure of a document, and self-assembles by inter-connecting to other documents with similar structure.

Omnity may be the first search and retrieval syst4em to embrace blockchain technology, but we are not 100 percent certain. Frankly we don’t pay much attention to distributed databases because the technology is another spin down database lane and the next big thing mall.

The document contains some interesting diagrams. Some of these remind us of sense making systems for law enforcement and intelligence professionals. The company positions itself against Palantir and Quid as well as Bloomberg and Lexis Nexis. Surprisingly Linguamatics is a “leader” like Omnity.

What is fascinating is that Omnity seems to be embracing the digital currency approach to raising funds. One of the firm’s advisors is the really famous Danny Kahneman.

My recollection is that Omnity was going to knock Google search off its mountain top. Then Omnity shifted to a commercial model like the old Dialog Information Services. Now it is blending findability with blockchain and crypto currency.

More information about the company is at www.omnity.io. Get the white papers. Check out the diagrams. One question is, “Should Palantir and Quid be looking over their individual and quite broad shoulders?”

Omnity’s approach is a good example of search vendors repositioning fast and slow.

Stephen E Arnold, October 15, 2018

COBOL Cowboys. Where Are the Cowgirls? Where Is the Trail Boss?

October 4, 2018

I love ThomsonReuters. Every once in a while, its real journalists craft a gem. I submit that “Banks Scramble to Fix Old Systems as IT Cowboys Ride into Sunset.” I will not point out that eliminating the “the” before “sunset” is a quite trendy touch.

The point of the write up is that when a bank hires an individual to work on systems, that engineer may love python, tolerate C, and maybe invite Java in for coffee once a month or so.

The write up reports that a banker allegedly said:

It [dealing with COBOL based systems] is immensely complex which sells new IT infrastructure to banks. “Legacy systems from different generations are layered and often heavily intertwined.

No kidding. Who knew? I recall the Year 2000 hysteria which sparked a bit of interest in COBOL. My memory may be fading. Perhaps that money gusher for COBOL professionals was an illusion.

A couple of observations:

First, COBOL has been around for 60 years. Innovations and alternatives have been around for decades. The failure of major institutions to invest in infrastructure is one reason why Amazon could provide a solution. There’s more money in banking than there is in selling eBooks, by the way.

Second, the notion of programmers as cowboys strikes me as odd when the #MeToo movement and its assorted fireworks are in evidence. A modest nod to non male COBOL wizards seems to be an odd omission. I saw the word cowboys and I wondered if the folks running this outfit should be asked to create a more appropriate name; for example, Gender Neutral COBOL Remediation or GNCR. I like it. Perhaps a Twitter storm will erupt.

Third, years ago I assumed Boards of Directors were supposed to provide inputs and help senior management figure out what to do with computers, software, and other business decisions. Have the Boards of Directors remained unaware of technological advances for more than half a century? That’s a question to which the answer seems to be, “Yes.” I am assuming that the TR write up is on the money.

Finally, what’s up with bank regulatory entities? It seems to me that somewhere along the regulatory chain the question, “What should be the minimum for bank technology enhancements?” I wonder if IBM has played a small role in keeping those mainframes humming? No, IBM would not make it difficult (technically or financially) to get free from the mainframe grasp. I assume I could ask Watson, but maybe not.

To sum up, ThomsonReuters’ article is a gem. I wonder if ThomsonReuters is running obsolete computer and network infrastructure hardware? Are these some DEC 20s lurking in Boston? Are banks able to search their documents in a reliable, satisfactory way? Why have the trail bosses lost the cattle?

Yikes, too many questions.

Stephen E Arnold, October 4, 2018

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