Quantum Baloney Gives Money People Indigestion
June 9, 2022
I won’t mention quantum supremacy. Okay, I did mention quantum supremacy. No, I won’t explain why trivial issues like chaos make assertions about quantum computing less than a slam dunk. I will mention a report with the snappy title “The “World’s Most Powerful Quantum Computer” Is A Hoax With Staged Nikola-Style Photos – An Absurd VC Pump With A Recent Lock-Up Expiration Takes SPAC Abuses To New Extremes.” The document consumes more than 180 pages. The author or authors obviously wanted to explain that there’s a burr under the Wild Rest pony herders’ saddle.
The main idea is that a couple of academics used jargon, nice personalities, and the pixie dust of quantum computing to suck in some investment and deliver digital digital horse manure. Now is the criticism justified? I mean more than 180 pages to make clear that talking about quantum computing is really easy. Demonstrations are only a bit more difficult unless one is an expert in 18th century American buttons. (No, that’s a real thing.)
My reaction to the write up in particular and the quantum computing baloney in general is that some folks have engaged in disinformation.
From the point of view of the authors of the 180 page document, the information seems clear, reasonably well documented, and focused on making life difficult for those who cooked up the “hoax.”
From the point of view of quantum researchers, there may be a different view. What self respective quantum wizards wants to dump on a colleague unless there is a specific payoff in the criticism.
Now here’s the problem: Disinformation.
The quantum computing “discipline” is chock full of claims, reports of breakthroughs, and marketing opportunities. A good example is that one vendor has developed a quantum resistant cryptographic system using plain Jane computers using traditional methods which would be familiar to Grace Hopper.
I can envision a scenario in which the founders of the company drawn and quartered in the cited document can explain what has been accomplished. If a really tough question comes up, the Silicon Valley ploy of apologizing and sending more information may work. Competitors will be able to explain why their approach is a home run. Commercialization is just around the corner. Lawyers will be compensated to try and figure out who is on first and why is I don’t know such a popular reference.
What’s accurate? What’s not accurate?
Welcome to the remarkable world of disinformation with a touch of information weaponization.
Stephen E Arnold, June 9, 2022
Bitcoin Dip: Buy a Dubai Villa Today?
June 9, 2022
Now there is an easy way to buy property with Bitcoin—if one is looking to settle in Dubai, that is. The International Business Times reveals, “Coinsfera Makes It Easy to Buy Real Estate in Dubai with Bitcoin.” Reporter Anjali Kochhar writes:
“If a buyer is not a UAE national, then they need to have an original ID or passport to buy properties in Dubai through Bitcoin. Meanwhile, the payment through Bitcoin will be considered in US Dollars or Dirhams. The crypto exchange will help the buyers with selecting different properties at premium locations in Dubai by assigning real estate agents who will help in property dealing. After that, the company will arrange a meeting for further dealing where you can negotiate and finalize the deal. Once all things are decided, buyers can transfer the capital amount in Bitcoin through their wallet. The buyers can have possessions of the villa right after the transfer of Bitcoins. ‘Coinsfera offers luxurious apartments in the great buildings of Dubai. We will not just save your time but also your cost in the transaction process. You just have to select your apartment and we will take care of the rest,’ the statement read.”
Sounds convenient. But who are the customers? We are not sure, but some people in Russia, the Middle East, and Monaco may be interested. The service’s launch follows the passage of recent legislation designed to position the Dubai Emirate as a leader in crypto currencies, NFTs and any other virtual assets that might come along. Founded in 2015, Coinsfera is a Bitcoin exchange firm based in Dubai that also serves customers in Istanbul, London, and Kosovo.
Cynthia Murrell, June 9, 2022
NSO Group: Here We Go Again
June 1, 2022
That Israeli outfit NSO Group has nailed the art of publicity. Positive PR? Nope. Not so positive? Yep. But as a wit allegedly said, “Any publicity is good publicity?”
Maybe.
“NSO’s Cash Dilemma: Miss Debt Repayment or Sell to Risky Customers” tries to explain some of NSO Group’s alleged activities. [This Financial Times’ article resides behind a paywall.] The write up states:
Hulio [one of NSO Group’s senior managers] said there was one option to bring in some cash quickly enough to pay salaries and service debt: reassemble a defunct internal committee and approve sales to customers flagged as “elevated risk” during due diligence.
Why is this allegation of money pressures sparking consideration of sales to nation states which may present some challenges to NSO Group, its managers and staff, and its investors?
My thought is that money must be followed.
A pursuit of money sparked some actions at other search and content processing centric companies. I mentioned this idea in my recent essay “Autonomy Business Details: Are These Relevant to Search- and Content Processing Type Outfits Today?”
The decision to generate revenues seems to open the door for many ideas. Some of these are okay; for example, selling more licenses to governments of NATO countries. A few may have been less well received; for example, relaxing the criteria used to determine what countries could license Israeli surveillance innovations.
US sanctions and the PR cyclone have created a number of business challenges for NSO Group. The path forward according to the Financial Times’ article looks like this:
In recent months, Hulio has come up with a new plan dubbed the “phoenix plan” by company insiders. The idea is to split NSO’s greatest assets from its greatest liabilities — this meant separating the code behind Pegasus and company engineers who are highly paid graduates of Israel’s elite military intelligence units, from the clients that have drawn the ire of the US and human rights groups. Hulio and a group of creditors hope that by spinning out a new entity that houses the code and engineers, it can sidestep the commerce department’s blacklist, especially if a new owner were a top US defence contractor.
What’s the outlook for NSO Group? Three possibilities strike me:
- Other companies will fill the gap. Just as Cellebrite has to deal with an upstart iPhone penetration solution, NSO Group will find that its methods provide a springboard to other innovators.
- NSO Group gets folded into a government agency. One can be sure it will not be a part of a nation state with negative thoughts about Israel.
- NSO Group folds its tent, and certain senior managers and engineers set up another company and move on.
I want to mention that the reason there is a glass ceiling for revenues from intelware and policeware is that there are a finite number of customers for the number of products and services on offer. Once that glass ceiling bumps the head of senior managers and stakeholders, then what I see as “drastic” actions kick in. Are Palantir’s comments about nuclear war and example of this?
I am certain about one thing: NSO Group is one of the most recognized brands of intelware in the world.
Stephen E Arnold, June 1, 2022
Autonomy Business Details: Are These Relevant to Search- and Content Processing Type Outfits Today?
May 31, 2022
I read “Judge Details Lynch’s $700k Signoff via iPhone Text in Full Autonomy Judgement.” The main idea is that Autonomy — an early entrant in the smart software for search and content processing — engaged in some business practices which a British judge finds suggestive. How suggestive? I am not sure, but the idea of using resellers and transactions to amp up revenues is interesting.
Another search and content processing outfit called Fast Search & Transfer (which Microsoft acquired more than a decade ago) found itself subject to some scrutiny for financial fancy dancing. One of the firm’s founders was found guilty and may have spent some time in the custody of a government. Maybe the fellow was cross country skiing and shooting a rifle at snow bunnies.
The relevance of the cited story and the reference to skis and weapons reminds me that the financial reports of high-flying search and content processing companies have to be scrutinized. I mention this because some of the more interesting search and content processing centric companies are publicly traded. Palantir Technologies comes to mind because I have seen a couple of semi-optimistic write ups about the company.
If I were a more youthful 77 year old, I would muster the energy to:
- Investigate the US government and UK government contracts for term, sunset dates, and contracting officers (what’s the background of these individuals)
- Research the question, “What’s bundled into the basic commercial and the basic government deal?”
- Explore the question, “How is cost of sales reacting to the economic climate since Palantir went public?”
- Try to determine answers to these questions: “What’s the ratio of sales people to programmers? The ratio of full time equivalents to contractors? How has the ratio changed since the firm went public?”
- Interview some people at LE and intel conferences to get a sense of the chatter related to this question: “Is Palantir bundling Amazon cloud services or doe the licensee have a choice?” and “Has there been talk of Palantir providing a “system in a box” to licensees with this requirement?
Why think about these types of questions? Oh, I am just curious about search and content processing outfits.
Stephen E Arnold, May 31, 2022
The Business Intelligence Blind Spot: Everyone Needs These Systems
May 30, 2022
I recall that a booth called “Business Blind Spots” identified a number of behaviors which contribute to business missteps. Staff, preconceived notions, market receptivity, etc. were among the points I recall.
I want to toss one more blind spot into the raging fire of burned cash, torched reputations, and incinerated opportunities. I call this bling spot, “Everybody needs these systems.” Plug in your own “systems”; for example, software that manages several cloud accounts which are guaranteed to blow through budget assumptions with no easy way to control the rising expenses.
I read “Palantir Stock: Getting Desperate.” I think the write up has been riding the well-worn fire trail to a burning coal mine.
Palantir Technologies is when the charities, the razzle dazzle, and the jargon are stripped away, is a search and retrieval company. The idea is that a person looking for information about a bad actor, for instance, can plug in the name and see results.
Now this seems like a function which is readily available from many vendors. The twist for Palantir is that it positioned its search as one that would meet the needs of intelligence officers. The US government entity embracing Palantir’s software influenced the add-ons; for example, the ability to ingest certain types of content that only government agencies could acquire.
In order to make sales, the marketing engine of Palantir came up with the same type of “latest and greatest” verbiage that characterizes intelware (that’s software built around the specific needs of intelligence analysts). One example is importing proprietary file types. Another is keeping track of where a dataset came from, who fiddled with it, and what an authorized user did with the data when in search mode.
Over time, companies which serve government agencies have to choose one of three paths:
- Path 1 is to just do commercial work. Forget the intelligence market. A company which has moved in this direction is one you may not know anything about. It is LifeRaft. Look them up. Now the company does market and ad intelligence for commercial companies, ad agencies, and probably some non profit outfits.
- Path 2 is to just focus on government sales. An example of this type of outfit is BAE Systems which has software able to do Palantir type functions. I am not sure BAE Systems returns phone calls from a bank or real estate agency wanting some Detica goodness.
- Path 3 is to do both. The best example of this is Voyager Labs which does the LifeRaft type work and the intelligence and law enforcement work of outfits like Palantir.
Which is the right path?
From my point of view, a company selling intelware should stick to government clients, maintain a low profile, and keep systems and methods secret. LifeRaft told me, “Don’t even mention our firm at the 2022 National Cyber Crime Conference.” Why? Doing work for certain government agencies gives some commercial firms and their go-go decision makers the heebie jeebies. The fear comes from folks who are interacting with investigators, intelligence operatives, and analysts could say something that will create big time thunderstorms for the commercial company. Some businesses are not exactly paragons of behavior. This means that the purchase cycle is drawn out, excuses are made, concerns about confidentiality raised, and weirdness about the amount of training, customizing, and optimizing the intelware system requires. The result? Some pretty crazy attempts to sell the product and the resulting disconnect from promises of reality from the commercial sector and the inevitable gap. This type of “gap” created some interesting situations in the decade or so.
What about government sales? Unless a company is selling hardware, software, spare parts, training, and services governments a fickle. Sure, an intelware outfit like Palantir will get initial contracts. But the government agencies have roving eyes and will keep licensing, looking for the perfect solution to intel needs. What happens is that the software only vendor runs out of customers. Once a number of big agencies sign up, the US General Services Administration or the Defense Services Administration will start angling for a deal. Cut the fees or lose the contracts. This is bad news because expensive software takes time to sell to government customers who want a demo or a year of free or discounted use in order to figure out if the system actually works. The problem is that There are not that many government agencies in the free world to support the intelware companies hungry for allocated budget dollars. Stated another way, the intelware company has to get some contracts, make the software work, and forget about the hockey stick financial projections. The intelware vendors chase US allies, but there are vendors in those countries, and it may make more sense to license Trendalyze or Verint, not the Silicon Valley type outfit. Bad financial news? Yep.
Path three is to sell to anyone who wants the system. This is very, very difficult because the intelware system has to be fiddled with in order to meet the specific requirements of an organization. Chasing bad actors is one thing; figuring out what type of beverage a college student wants is another thing. Hanging over the commercial sales call is the concern about the government work, the government customers, and the government processes, which — once started — are tough to turn off.
This means that companies crafted for intelware users find that government sales slow down, commercial sales cycles take a long time and often end up at a dead end, and non government organizations don’t want or can’t pay big bucks for what is search software.
The market itself is changing. If you want to analyze tweets, hire a marketing agency and get rid of them once they have completed a project. Clean, tidy, easy. If a client has some Google grade programmers, download Maltego, license the $100 Hunchly, and spend some time looking at tools on GitHub. (Thank you, Microsoft, but do you know what’s on that service? I thought so.)
The cited article makes this point:
…the company must expand internationally. What better way to get new sales than to start fires and be the person to sell the smoke detectors? That is what Palantir’s software does, assess and analyze data for threats. It is a loose analogy but fitting. But why is Palantir in such desperate need of expansion to new governments and industries? It is because the only thing keeping the stock going is the revenue growth rate which has been so strong. The company has incurred losses every year of operation. It expects operating expenses to increase.
And what about international sales? Three points:
- There are vendors offering comparable or better systems so buying non-US may make economic and political sense
- The cost of closing deals internationally is — the last time I checked — two to three times the cost of selling from Chicago to US based customers
- The number of purchasers is not as large as one thinks? The US is the living embodiment of Parkinson’s Law and the Peter Principle. Other countries are not much better and they have less disposable cash.
Net net: The word desperate may be appropriate for Palantir Technologies. I don’t have a good set of options for the company: Too much hype, too much development cost, too much customizing and tuning and training, and too much nuke talk. Not helpful.
Stephen E Arnold, May 30, 2022
Cybersecurity: Are the Gloves Off?
May 26, 2022
Cybersecurity has been a magnet for investments. Threats are everywhere! Threats are increasing! Ransomware destroys businesses and yours will be next? One thousand bad actors attack in the SolarWinds’ misstep, right? The sky is falling!
Frightened yet?
Changes are evident. Let me offer two examples:
Lacework
The cybersecurity outfit Lacework has just allowed about 20 percent of their workforce to find their future elsewhere. Uber, perhaps? Piece work via Fiverr.com? A for-fee blog on Substack, the blog platform with real journalists, experts, pundits, wizards, etc.?
“Cloud Security Firm Lacework Lays Off 20% of Staff
” reports:
A well-funded startup in the cybersecurity industry, Lacework, has become the latest tech firm to disclose a major round of layoffs amid fears of a broader economic slowdown. In a statement provided to Protocol, Lacework confirmed that the layoffs impacted 20% of its employees, in connection with what it called a “decision to restructure our business.”
Is the number of future hunters let loose in the datasphere accurate? The article points out that Lacework used the outstanding Twitter to say, 20 percent was a “significant overestimate.” Whom does one believe? In today’s world, I have to hold two contradictory statements in my mind because I sure as heck don’t know why a hot sector with a well funded company is making more parking available and reducing demand for the ping pong table.
Cybersecurity Does Not Work
The second example I noted an advertisement in my dead tree version of the Wall Street Journal. Here’s the ad from the May 26, 2022, publication:
The text Tanium advertisement declares that cybersecurity systems fail their customers. The idea is that there are many cybersecurity vendors, and each offers pretty good barriers to a couple of threats. The customers of these firms’ products have to buy multiple solutions. The fix? License Tanium, a “best place to work.”
Stepping Back
The first example provides a hint that certain companies in the cybersecurity market are taking steps to reduce costs. Nothing works quite as well as winnowing the herd. My hunch is that Lacework is like a priest in ancient Greece poking at a sacrificial lamb and declaring, “Prepare for the pestilence and the coming famine. Have a good day.”
The second example may signal that the policy of cybersecurity vendors not criticizing one another is over. Tanium is criticizing a pride of cyber lions. My hunch is that the gloves will be coming off. Saying that no other vendor can deal with cyber threats in the Wall Street Journal is a couple of levels above making snarky comments in a security trade show booth.
Net Net
Bad actors can add some of the Lacework castoffs to their virtual crimeware teams hiding behind the benign monikers of front companies in Greece and Italy, among other respected countries. The Tanium ad copy offers proof that existing cyber defense may have some gaps. The information will encourage bad actors to keep chipping away at juicy online targets. Change has arrived.
Stephen E Arnold, May 26, 2022
An Analyst Wrestles with the Palantir Realities
May 23, 2022
Palantir Technologies in my world view is a services and software company positioned as a provider of intelware. Intelware means software and services which allow users to extract high-value information from text, numeric, and possibly image and video data.
Palantir, founded in 2003, has been influenced from its inception by precursor software like the original i2 Ltd. Analyst Notebook and BAE Systems Detica. Both of these systems allowed user to intake “content”, enter the names of people or things, and display the outputs so that the higher-value facts were presented in a useful way; for example, a chart or a relationship graph.
The US government works to learn about new and potentially useful software and systems. Not surprisingly, a government agency showed interest in Palantir’s software when the entrepreneurs involved in the company started describing the Palantir features and functions. Appreciate that in its early years almost two decades ago, the presentations and demonstrations captured what I call “to be” systems; that is, at some point in the future, Palantir’s system and software would be everything that Analyst Notebook, Detica, and the other intelware vendors could offer. The pitch is compelling.
Palantir, now almost two decades old, is a publicly traded company, and it is working overtime to move beyond sales to governments in the US and elsewhere. One of the characteristics of selling intelware to non-governmental organizations is that the capabilities of the system and its use by government clients are often disconcerting to a financial institution, a big hospital chain, or consulting firm focused on real estate.
Furthermore, intelware systems require data. Some data can be easily imported into a system like Palantir’s; for example, plain ASCII text and Excel spreadsheets. Other data are in a format which must be transformed so that Palantir can import the information. Other data present challenges like converting an image with a date and time stamp into an indexed content object. That indexing, to be helpful and to reduce the likelihood of errors, has to be accurate. Some non-text data must be enriched. French content processing experts refer to this enrichment as “fertilization.”
The write up “Palantir: Complete Disaster” includes this statement:
We think there are three possible courses of action in the disaster that has been Palantir, all of which are correct.
Here are the three “courses of action”:
- Don’t buy shares in Palantir.
- Buy shares, maybe short the stock.
- Buy shares and ride out the downturn.
Each of these options ignore two issues. The first is why Palantir is not closing deals and showing a profit. The second is why an intelware company is not able to amp up its sales to government agencies in the US, Western Europe, and selected government agencies elsewhere.
My view is that Palantir is a tough sell for these reasons:
- To land a deal, the prospect has to know what the payoff from using the Gotham / Foundry system is. “Intelligence” is a hot concept, but it is a tough sell unless there is a “champion” inside the prospect’s organization to grease the skids.
- Competitors offer comparable products for as little as $5,000 per month and some of these competitors bundle third party data which can be fused with the licensee’s data with minimal fiddling with filters and file conversions.
- Newer systems are easier to use, include automated workflows which speed analysts, investigators, and and researchers work.
The slow sales of Palantir follow the same type of curve that sales of Autonomy, Fast Search & Software, and many other “information” or “intelligence” focused products have. The initial sales are from government agencies which want better mouse traps. When the intelware does not deliver markedly significant payoffs, the licensees keep looking for better, faster, and cheaper options.
Will Palantir be able to generate a profit and deliver organic growth?
If the trajectory of precursor companies is the path Palantir is on, the answer is, “No.”
Stephen E Arnold, May 23, 2022
Facebook: Getting Softer, More Lovable?
May 9, 2022
Is the Zuckbook going soft? Sure, the company allegedly dorked around with Facebook pages in Australia. Sure, a former employee revealed the high school science club thought framework? Sure, the Zuck is getting heat for his semi-exciting vision of ZuckZoom and ZuckGraphics.
The article with the clicky title “Meta’s Challenge to OpenAI—Give Away a Massive Language Model. At 175 Billion Parameters, It’s As Powerful As OpenAI’s GPT-3, and It’s Open to All Researchers” shows that El Zucko is into freebies. The idea is that Zuck’s smart software is not going to allow the Google to dominate in this super-hyped sector. Think of it as the battle of the high school science clubs.
The ZuckVerse anyone who sells gets special treatment. Meta will charge about 48 percent commission.
Selling in Horizon Worlds will be limited to a few creators located in the US and Canada who must be eighteen years old. The 50% commission is a huge chunk of a creator’s profit, even if the item is an NFT:
“Meta spokesperson Sinead Purcell confirmed the figure to The Post, adding that Horizon Worlds will eventually become available on hardware made by other companies. In those cases, Meta will keep charging its 25% Horizon Worlds fee but the other companies will set their own store transaction fees. Vivek Sharma, Meta’s vice president of Horizon, told The Verge that the commission is ‘a pretty competitive rate in the market.’”
Zuckerberg criticized Google and Apple for taking 30% commission fees to digital creators. He claims that when the Metaverse adds a revenue share the commission rate will be less than 30%.
Zuckerberg claims he wants to support creators and help them make a living wage, but his statements are probably hot air. Talk is cheap, especially for tech giants. Zuckerberg wants to recoup the lost ad revenue through NFTs.
See. Kinder. Gentler. Maybe a Zuckbork?
Stephen E Arnold, May 9, 2022
NCC April Vendor Contracts: How to Be Slick and Lose Customer Trust
April 28, 2022
I read “Build Vs. Buy: Vendor Contract Shenanigans.” The write up is an excellent reminder of the character traits of MBAs and lawyers; that is, you lose if we provide you with a contract you sign without understanding. The article contains a number of examples of legal behavior which might strike some people as fraud. Oh, well, that is a signed contract, and your firm must comply. I love it when the lawyer tells a contracting officer, “Hey, we are sorry. These are standard terms.” Yep, standard for whom?
Let me highlight three of the methods used to inflict maximum gain for the vendor and delivering discomfort to the customer. Please, consult the original write up for the fourth item on the list.
First, the vendor (in this case, the Google) specifies that when the guaranteed level of service fails, the customer must get everyone in the chain to notify one another that the Googley service did not deliver. A failure to complete this notification within 30 days means you forfeit a “service credit.” (I don’t know what a service credit means, but I don’t think it means cash money.)
Second, the vendor collects the money before service begins. If you don’t use what you bought, there is no refund.
Third, sign our deal and our company will use your logo forever.
The MBAs and lawyers involved in deals with these types of clauses have an ideal rationalization: We are just doing our jobs.
Yes, these individuals are. Just following orders. Where have I heard that before?
Stephen E Arnold, April 28, 2022
The Value of the NSO Group? Probably More Than Zero
April 19, 2022
The Financial Times published “NSO Group Deemed Valueless to Private Equity Backers.” The orange newspaper stated that a consulting firm studied the intelware outfit and provided information with this startling number. There’s a legal dust up underway, and my hunch is that legal eagles will flock to this situation: Alleged misuse of the Pegasus system, financial investments, and the people involved in assorted agreements. The story points out that NSO Group is “not a party” to this particular lawsuit. The folks funding the legal eagles are a consulting outfit called Berkeley Research Group. An outfit called Novalpina Capital convinced some to put money into the cyber gold mine. Then the PR spotlight illuminated NSO Group and a torrent flowed downhill knocking down some once impregnable structures. Plus the FT’s article references to an outfit called Integrity Partners who, according to the Financial Times, are willing to buy NSO Group for several hundred million dollars. Is this a good deal? In my opinion, something is better than zilch.
An unnamed NSO Group spokesperson indicated that the NSO Group’s system was of interest to many customers. If this is true, wasn’t the most recent license deal inked in mid 2021 for the platform? My thought is that the company’s proprietary technology would be of interest to other intelware firms interested in obtaining the licensee base and the platform which might benefit from newer, more sophisticated geo-spatial functionality which I will describe in my OSINT lecture at the US National Cyber Crime Conference on April 26, 2022. Sorry, the info is not for a free blog, gentle reader.
In my opinion, the referenced write up presents a fairly chaotic snapshot of the players, the valuation, and the legal trajectory for this matter. We need to bear in mind that NSO Group is hitting up the US Supreme Court and dealing with its Tim Apple issues.
One thing is crystal clear to me: The NSO Group’s misstep is now sending out concentric pulses which are extremely disruptive to entities rarely in the public spotlight. This is unfortunate and underscores why the Silicon Valley Tel Aviv style is not appreciated in some upscale social circles.
Stephen E Arnold, April 19, 2022
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