DarkCyber noted “Algolia Finds $110M from Accel and Salesforce for Its Search-As-a-Service, Used by Slack, Twitch and 8K Others.” The write up reports that the company has “closed a Series C of $110 million, money that it plans to invest in R&D around its search technology, including doubling down on voice, and further global expansion in Europe, North America and Asia Pacific.”
Economists: The Borjes Approach
October 28, 2019
Now this is a source among sources: Epoch Times. DarkCyber is not equipped to identify the information in “Krugman Admits He and Mainstream Economists Got Globalization Wrong.” One point in the write up evoked memories of a college course when I was a callow youth; to wit:
the consensus economists failed to measure adequately and properly account for the impact of globalization on specific communities, some of which were disproportionately hit hard. This despite the fact that models predicted, and figures later showed, that free trade was a net gain in terms of both jobs and wages in the broader American economy. Generalized gain but localized pain.
There you go. Better for everyone. Not so good for some others.
In business, the technology magnets are doing fine. Local retail shops, not so fine. Some countries are chugging along. Others seems to be shifting into riot mode. Planning a trip to Bogota, Lima, or Paris for a three day week end soon?
What about that college economics class through which I sat asking such questions as, “What is this professor talking about?” and “Have I awakened in a short story by Jose Luis Borges?”
Maybe the Epoch Times is neither wrong nor right about Paul Krugman? Paradoxical thoughts have legs in the online world. What’s real and what’s fake? Think of those riders in the wasteland in front of what seems to be a mountain range. Borges did and look what that earned him.
Stephen E Arnold, October 28, 2019
Amazon AWS Revenue
October 25, 2019
Amazon’s third quarter 2019 results revealed that net sales went up. The number of interest in Harrod’s Creek is AWS. The company’s data report:
- AWS revenue hit $9 billion, up from $6.7 billion in the third quarter of 2018
- Amazon rolled out a fully managed service for business forecasting
- The Quantum Ledger Database is now available as a fully managed service
- AWS cut prices of storage for several classes of service.
Net net: Plenty of cash but Microsoft’s cloud service may be nibbling at some service areas in which Amazon had minimal competition for a number of years.
Stephen E Arnold, October 25, 2019
Security Industry Blind Spot: Homogeneity
October 24, 2019
Push aside the mewlings about Facebook. Ignore Google’s efforts to quash employee meetings about unionization. Sidestep the phrase “intelligent cloud revenue.”
An possibly more significant item appeared in “Information Security Industry at Risk from Lack of Diversity.” The write up states:
The Chartered Institute of Information Security (CIISec) finds that 89 percent of respondents to its survey are male, and 89 percent over 35, suggesting the profession is still very much in the hands of older men.
Furthermore, the security industry is wallowing in venture funding. That easy money has translated into a welter of security solutions. At cyber security conferences, one can license smart monitoring, intelligent and proactive systems, and automated responses.
The problem is that this security country club may be fooling itself and its customers.
The write up quotes from the CIISec report, presenting this segment:
“If the industry starts to attract a more diverse range of people whilst spreading awareness of the opportunity available, we could be well on the way to truly modernizing the industry,” adds Finch. “Key to all this will be both organizations and individuals having a framework that can show exactly what skills are necessary to fulfill what roles. This will not only help hire the right people. It will also mean that it the routes to progress through an individual’s career are clearly marked, ensuring that individuals who enthusiastically join the industry don’t over time become jaded or burn out due to a lack of opportunity.”
Partially correct opines DarkCyber. The security offered is a me-too approach. Companies find themselves struggling to implement and make use of today’s solutions. The result? Less security and vendors who talk security but deliver confusion.
Meanwhile those bad actors continue to diversify, gain state support, and exploit what are at the end of a long day, vulnerable organizational systems.
Stephen E Arnold, October 24, 2019
Algolia: Cash Funding Hits $184 Million
October 15, 2019
Exalead was sucked into Dassault Systèmes. Then former Exaleaders abandoned ship. Algolia benefited from some Exalead experience. But unlike Exalead, Algolia embraced venture funding with cash provided by Accel, Point Nine Capital, Storm Ventures, and Y Combinator, among others.
The write up adds:
Having Salesforce as a strategic backer in this round is notable: the CRM giant currently does not have a native search product in its wide range of cloud-based services for enterprises, instead opting for endorsed integrations with third parties, such as Algolia competitor Coveo. The plan will be to further integrate with Salesforce although no products to speak of as of yet.
The challenge will be to go where few search and retrieval systems have gone before.
Some people have forgotten the disappointments and questionable financial tricks promising search vendors delivered to stakeholders and customers.
With venture firms looking for winners, returns of 20 percent will not deliver what the sources of the funds expect. The good old days of a 17X return may have cooled, but generating an 8X or 12X return may be a challenge.
Why?
In the course of our researching and writing the enterprise search report in 2003 to 2006 and out and our subsequent work, several “themes” or “learnings” surfaced:
- Good enough search is now the order of the day; that is, an organization-wide search system does not meet the needs of many operating units. Examples range from the legal department to research and development to engineering and the drawings plus data embedded in product manufacturing systems to information under security umbrellas with real time data and video content objects. Therefore, the “one solution” approach dissipates like morning fog.
- Utility search from outfits like Amazon are “good enough.” This means that a developer using Amazon blockchain services and workflow tools may use the search functions available from Amazon. Maybe Amazon will buy Algolia, but for the foreseeable future, search is a tag-along function, not a driver of the big money apps which Amazon is aiming toward.
- Search, regardless of vendor, must spend significant sums to enrich the functions of the system. Natural language processing, predictive analytics, entity extraction, and other desired functions are moving targets. Adding and tuning these capabilities becomes expensive. And it the experiences of Autonomy and Fast Search & Transfer are representative, the costs become difficult to control.
DarkCyber hopes that Algolia can adapt to these research factoids. If not, search and retrieval may be rushing toward a disconnect between revenues, sustainable profits, and investor expectations.
The wheel of fortune is spinning. Where will it stop? On a winner or a loser? This is a difficult question to answer, and one which Attivio, BA-Insight, Coveo, Elastic, IBM Watson, Lucidworks, Microsoft, Sinequa, Voyager Search, and others have been trying to answer with millions of dollars, thousands of engineering hours, and massive investments in marketing. I am not including the search vendors positioned as policeware and intelware; for example, BAE NetReveal, Diffeo, LookingGlass, Palantir Technologies, and Shadowdragon, among others.
Worth monitoring the trajectory of Algolia.
Stephen E Arnold, October 15, 2019
AI: Of, By, and For the One Percenters
September 28, 2019
I read “At Tech’s Leading Edge, Worry About a Concentration of Power.” You can too if you pay the Gray Lady or have a dead tree version of the estimable newspaper.
The main point of the write up is that doing smart software with machine learning and lots of data is expensive. Therefore, if a person struggles to pay the rent, smart software is going to be out of reach.
Sure, Amazon offers deals, but the fees for big time machine learning can be beyond the reach of the average country club member. Even a pro athlete with a history of interesting tweets may not be able to handle the invoices from Google, Microsoft, and other cloud vendors.
The newspaper observes against these somewhat poorly kept smart software secrets:
Computer scientists say A.I. research is becoming increasingly expensive, requiring complex calculations done by giant data centers, leaving fewer people with easy access to the computing firepower necessary to develop the technology behind futuristic products like self-driving cars or digital assistants that can see, talk and reason.
Is there a fix?
Well, sort of. The New York Times pointed to foundation support; for example:
At the Allen Institute in Seattle, Mr. Etzioni [former professor and online expert] said, the team will pursue techniques to improve the efficiency of artificial intelligence technology. “This is a big push for us,” he said. But Mr. Etzioni emphasized that what he was calling green A.I. should be seen as “an opportunity for additional ingenuity, not a restraint” — or a replacement for deep learning, which relies on vast computing power, and which he calls red A.I.
Net net: Smart software requires big bucks, big brains, big computing, and big effort. Can innovations emerge from a lab like the one beleaguered Tesla operated?
Maybe, just not probable. When big outfits “help”, the opportunity for “borrowing” may be tempting. In an ethics free zone, who wins?
The one percent. What’s different this time?
Stephen E Arnold, September 28, 2019
Mithril Capital Tarnished by Federal Probe
September 26, 2019
This is a true or false situation.
You may be familiar with Peter Thiel, who co-founded PayPal and Palantir Technologies and has since used his billions to become a prominent venture capitalist. So prominent, in fact, that his involvement as co-founder helped Mithril Capital raise over $1billion. Now, though, Vox Recode reports. “The FBI Is Investigating a Venture Capital Fund Started by Peter Thiel for Financial Misconduct.” The investigation centers on Ajay Royan, Mithril co-founder who has a long history of working with Thiel. Though the probe is in its early stages, investigators have questioned individuals “close to Mithril” about possible financial misconduct. We’re told Mithril’s investors have complained in recent years that Royan failed to invest some of their cash in startups while collecting a fortune in fees for himself. Reporter Theodore Schliefer specifies:
“Mithril is likely collecting as much as $20 million a year in management fees, sources familiar with the figures have previously told Recode — an unusually large haul for a venture capital firm that each month has a smaller and smaller staff and therefore smaller and smaller expenses. (Mithril disputed the $20 million figure but did not provide an alternative.) At least 75 percent of the firm’s management company is owned by a Cayman Islands limited company that is, in turn, owned in excess of 75 percent by Royan, according to legal documents. So some of that money is going to Royan directly as salary. Those management fees go further in a low-tax state like Texas, where Mithril Capital said it was moving late last year. Several employees resisted the sudden move to Austin, which has a much smaller startup scene than Silicon Valley. Royan has said the move was rooted in his distaste for the Bay Area. But beyond that, two sources told Recode that Mithril leaders alluded to tax advantages when privately explaining the multiple reasons for the move. Mithril denied this.”
While denying any wrongdoing, Royan is sensibly cooperating with investigators. He also seems to be playing defense, offering uncharacteristic interviews at several financial and tech news outlets. Schliefer observes Thiel’s reputation is suffering from the association, though his direct involvement with the firm appears to be minimal.
The lengthy article shares some interesting details about the firm. Several staff members have recently bailed, for example.
Would an analysis of the available data with the Palantir Gotham system provide some insight?
Cynthia Murrell, September 26, 2019
Amazon Pricing Glitch?
September 22, 2019
A thread on YCombinator Hacker News presented a question from an Amazon cloud customer. The issue was a doubling of prices. The thread suggested that a glitch took place with different costs reported on the Billing * Cost Spend Summary and the AWS Cost Management Dashboard. Comments range from “AWS usage reporting is utter crap” to “I killed a bunch of service content and my cost STILL seems to be going up.” Glitch or some other factor? Interesting.
Stephen E Arnold, September 22, 2019
Elastic Stack Goes Into Cyber Security
September 11, 2019
The open source search company Elasticsearch has augmented its offerings with new security technology. ZDNet delves into Elasticsearch’s new endeavor in the article, “Elastic Takes the First Steps Toward Building Out Its SIEM Solution.” Elastic Stack is Elasticsearch’s open source analytics tool and it received a new update: Elastic NV. Elastic NV is a data model and UI for Security information and Event Management (SIEM).
Elasticsearch has a lot of competition, so the company decided that making its log, search, and analytics stack more utilitarian would expand its client base. The SIEM update is an appealing security solution:
“The SIEM features lay the foundations for a more fleshed-out solution going forward with the new Elastic Common Schema, an open source specification for field naming conventions and data types; think of the new common schema as a Rosetta Stone for the different types of logs, metrics, and other contextual data that is used for analyzing security events. Additionally, the 7.2 release adds a dedicated user interface for security events, featuring a timeline viewer to store evidence of an attack, pin and annotate relevant events, and provide query filtering capabilities.”
While appealing the Elastic SIEM offerings are still skeletal, but Elastic acquired Endgame-a company that designs endpoint security solutions. Elastic will probably include it in a future SIEM update.
Search is also more powerful in Elastic NV. Search used to be limited to the Elastic cloud, but it can now be used on-site end systems. Elastic is extending its services also to make a scalable search-based solution to provide insights into detecting potential threats.
Will other enterprise search vendors follow Elastic?
Whitney Grace, September 11, 2019
Enterprise Search: AI and a Low Spend
August 26, 2019
DarkCyber Read “Capacity Raises $13.2 Million to Index Emails, Files, and More with AI.” The company was founded in 2017. We noted this passage:
Capacity (formerly Jane.ai), [is] a startup developing a platform that indexes data from apps, teams, and more and enables users to search through the corpus using natural language.
Plus, the system learns and improves over time.
The company’s funding to deliver AI, multi-source enterprise search is “over $21 million.”
One of the founders is CEO David Karandish, formerly the CEO of Answers.com. He is quoted as saying:
[Capacity] is an intuitive, intelligent AI-powered Teammate who gives employees instant access to the information they need to do their jobs well.
The indexing system can process content from such systems as:
- ADP human resource information
- Box
- NetSuite
- Google Gmail
- Microsoft Exchange
- Microsoft OneDrive
- Sage human resource information
- Salesforce
- ServiceNow
- Zendesk
The system includes “a chatbot with natural language processing capabilities that integrates with popular messaging apps such as Slack and Skype.”
We noted this statement:
Capacity can deliver company-wide announcements, like daily news and event notifications, and onboard new hires by providing access to forms that need to be completed. For customers with websites that have FAQ sections, it can be made public-facing to help cut down on customer service requests.
If Capacity can deliver, outfits like LucidWorks will have some explaining to do to its investors.
Stephen E Arnold, August 26, 2019
LucidWorks: Another $100 Million
August 14, 2019
LucidWorks is an open source “search” play built on Solr. The company is fighting a battle with Elastic. Both companies are likely to face increased pressure from newcomers like Algolia and from the relentless Amazon AWS search system.
According to Crunchbase:
AI-powered search venture Lucidworks has raised $100 million from Francisco Partners and TPG Sixth Street Partners, the company announced today (first reported by Fortune’s Term Sheet).
What’s interesting is that Crunchbase did some math and stated:
The funding amounts to nearly as much (a combined $109 million) as the twelve-year-old company has raised since it was founded in 2007, according to Crunchbase data. Its last raise took place in May 2018 – a $50 million Series E led by Top Tier Capital Partners. So this round is precisely double its last raise.
A free profile of the LucidWorks system is available at www.xenky.com/vendor-profiles.
How different is today’s Lucid from the system available seven or eight years ago? The publicity and marketing collateral generated by the company suggests that artificial intelligence is the core of the “new” LucidWorks.
The question is, “What type of financial payoff is necessary to deliver an upside for those investors who have provided money to the company?”
With investors expecting a dump truck of money, LucidWorks will have to:
- Grow its revenue well beyond “search successes” like Endeca to warrant a big buy out. But Endeca hit a wall at about $100 million in revenue before Oracle bought out the company for an alleged $1 billion. Where is Endeca now?
- Go an an acquisition spree to increase revenues and groom itself for an Autonomy type deal. Autonomy’s $700 million in revenue fetched $11 billion when the well managed Hewlett Packard snapped up the company.
- Revolutionize something, sign up partners, resellers, and licensees, and push for an initial public offering.
The odds are that LucidWorks, which was founded in 2007, has been laboring to achieve success for 12 years. That effort has now required $209 million.
Unlike Palantir, which is essentially a search and retrieval system, LucidWorks lacks the stealth, sparkle, and cachet of its Palo Alto neighbor. Search and retrieval remains a market niche with has a reputation for generating pivots, repositionings, and massive financial shocks. Will LucidWorks follow the Convera trajectory which carried Allen & Co. into a storm?
LucidWorks has to distinguish itself as more than a cash burning machine, and that is getting more difficult, not easier, carrying the color flag which says, “Artificial intelligence.” The AI parade is choked with similar banners. Maybe AI is the secret sauce that will jump start search vendors struggling for revenue and “smart money” investors?
Stephen E Arnold, August 14, 2019
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