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
Google Hits Microsoft in the Nose: Alleges Security Issues
April 15, 2022
The Google wants to be the new Microsoft. Google wanted to be the big dog in social media. How did that turn out? Google wanted to diversify its revenue streams so that online advertising was not the main money gusher. How did that work out? Now there is a new dust up, and it will be more fun than watching the antics of coaches of Final Four teams. Go, Coach K!
The real news outfit NBC published “Attacking Rival, Google Says Microsoft’s Hold on Government Security Is a Problem.” The article presents as actual factual information:
Jeanette Manfra, director of risk and compliance for Google’s cloud services and a former top U.S. cybersecurity official, said Thursday that the government’s reliance on Microsoft — one of Google’s top business rivals — is an ongoing security threat. Manfra also said in a blog post published Thursday that a survey commissioned by Google found that a majority of federal employees believe that the government’s reliance on Microsoft products is a cybersecurity vulnerability.
There you go. A monoculture is vulnerable to parasites and other predations. So what’s the fix? Replace the existing monoculture with another one.
That’s a Googley point of view from Google’s cloud services unit.
And there are data to back up this assertion, at least data that NBC finds actual factual; for instance:
Last year, researchers discovered 21 “zero-days” — an industry term for a critical vulnerability that a company doesn’t have a ready solution for — actively in use against Microsoft products, compared to 16 against Google and 12 against Apple.
I don’t want to be a person who dismisses the value of my Google mouse pad, but I would offer:
- How are the anti ad fraud mechanisms working?
- What’s the issue with YouTube creators’ allegations of algorithmic oddity?
- What’s the issue with malware in approved Google Play apps?
- Are the incidents reported by Firewall Times resolved?
Microsoft has been reasonably successful in selling to the US government. How would the US military operate without PowerPoint slide decks?
From my point of view, Google’s aggressive security questions could be directed at itself? Does Google do the know thyself thing? Not when it comes to money is my answer. My view is that none of the Big Tech outfits are significantly different from one another.
Stephen E Arnold, April 15, 2022
AI Helps Out Lawyers
April 11, 2022
Artificial intelligence algorithms have negatively affected as many industries as they have assisted. One of the industries that has benefitted from AI is law firms explains Medium in: “How Artificial Intelligence Is Helping Solve The Needs Of Small Law Practitioners.” In the past, small law firms were limited in the amount of cases they could handle. AI algorithms now allow small law practices to compete with the larger firms in all areas of laws. How is this possible?
“The latest revolution in legal research technology ‘puts a lawyer’s skill and expertise in the driver’s seat…’ New artificial intelligence tools give lawyers instant access to vast amounts of information and analysis online, but also the ability to turn that into actionable insights. They can be reminded to check specific precedents and the latest rulings, or be directed to examine where an argument might be incomplete. That leaves the lawyers themselves to do what only they can: think, reason, develop creative arguments and negotiation strategies, provide personal service, and respond to a client’s changing needs.”
Lawyers used to rely on printed reference materials from databases and professional publications. They were limited on the number of hours in a day, people, and access to the newest and best resources. That changed when computers entered the game and analytical insights were delivered from automated technology. As technology has advanced, lawyers can cross reference multiple resources and improve legal decision making.
While lawyers are benefitting from the new AI, if they do not keep up they are quickly left behind. Lawyers must be aware of current events, how their digital tools change, and how to keep advancing the algorithms so they can continue to practice. That is not much different from the past, except it is moving at a faster rate.
Whitney Grace, April 11, 2022
Why Be Like ClearView AI? Google Fabs Data the Way TSMC Makes Chips
April 8, 2022
Machine learning requires data. Lots of data. Datasets can set AI trainers back millions of dollars, and even that does not guarantee a collection free of problems like bias and privacy issues. Researchers at MIT have developed another way, at least when it comes to image identification. The World Economic Forum reports, “These AI Tools Are Teaching Themselves to Improve How they Classify Images.” Of course, one must start somewhere, so a generative model is first trained on some actual data. From there, it generates synthetic data that, we’re told, is almost indistinguishable from the real thing. Writer Adam Zewe cites the paper‘s lead author Ali Jahanian as he emphasizes:
“But generative models are even more useful because they learn how to transform the underlying data on which they are trained, he says. If the model is trained on images of cars, it can ‘imagine’ how a car would look in different situations — situations it did not see during training — and then output images that show the car in unique poses, colors, or sizes. Having multiple views of the same image is important for a technique called contrastive learning, where a machine-learning model is shown many unlabeled images to learn which pairs are similar or different. The researchers connected a pretrained generative model to a contrastive learning model in a way that allowed the two models to work together automatically. The contrastive learner could tell the generative model to produce different views of an object, and then learn to identify that object from multiple angles, Jahanian explains. ‘This was like connecting two building blocks. Because the generative model can give us different views of the same thing, it can help the contrastive method to learn better representations,’ he says.”
Ah, algorithmic teamwork. Another advantage of this method is the nearly infinite samples the model can generate, since more samples (usually) make for a better trained AI. Jahanian also notes once a generative model has created a repository of synthetic data, that resource can be posted online for others to use. The team also hopes to use their technique to generate corner cases, which often cannot be learned from real data sets and are especially troublesome when it comes to potentially dangerous uses like self-driving cars. If this hope is realized, it could be a huge boon.
This all sounds great, but what if—just a minor if—the model is off base? And, once this tech moves out of the laboratory, how would we know? The researchers acknowledge a couple other limitations. For one, their generative models occasionally reveal source data, which negates the privacy advantage. Furthermore, any biases in the limited datasets used for the initial training will be amplified unless the model is “properly audited.” It seems like transparency, which somehow remains elusive in commercial AI applications, would be crucial. Perhaps the researchers have an idea how to solve that riddle.
Funding for the project was supplied, in part, by the MIT-IBM Watson AI Lab, the United States Air Force Research Laboratory, and the United States Air Force Artificial Intelligence Accelerator.
Cynthia Murrell, April 8, 2022
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