Sunday, August 28, 2011

Riots and the Big Data Problem

The recent riots in London
Back from vacation, I was catching up on a few recent issues of The Economist. The riots in England have obviously made headlines in the UK magazine and one particular issue - very much related to content management - caught my eye.

The rioters were acting in plain view of the cameras and they were coordinating their actions using the BBM (BlackBerry Messenger). The UK is one of the countries with the highest density of surveillance cameras in the world and so the police have apparently plenty of video material and BlackBerry traffic to analyze to identify and apprehend some of the trouble-makers. Turns out, the data is not just plenty - there is too much of it.

Indeed, the data volumes are so huge that the police hardly stand a chance to ever analyze it. Strapped by tight budgets and austerity measures, the UK police have barely the resources to prosecute the most severe crime and there are no resources left to dig through the gigabytes and gigabytes of surveillance data.

This is an interesting “big data” problem. Lots has been written about big data lately. The availability of detailed data tracking for every transaction and every move opens up new opportunities that just a few years ago were unthinkable. Analyzing and understanding the data patterns leads to new types of services and efficiencies that savvy companies have already begun to take advantage of. And more is to come.

That’s all great for structured data which is relatively easy to mine and analyze using computer programs. The challenge comes when the data is unstructured, such as text messages or video feeds. Unstructured data is much harder to analyze programmatically with reliable outcomes and speeds that can keep up with the torrential pace at which the data is being generated.

Sure, content analytics are already a well established discipline and many vendors from IBM to OpenText have content analytics offerings today. IBM even made a lot of headlines earlier this year with its Watson project - a supercomputer specialized on natural language analysis and reasoning... and on the TV game Jeopardy. Watson was a unique system designed for a specific purpose and even Watson would have had a hard time identifying faces of perpetrators from hours of riot video footage.

That job is much harder and the technology is by far not as mature. Content analytics have a great future in light of the big data problem and it will be fun to watch as the technology matures over the next few years. In the mean time, let's hope the UK police apprehend the key trouble makers from the recent riots by whatever means they have at their disposal.

Sunday, August 21, 2011

What's Missing in Google+

Google’s foray into social media, Google+, has been busily adding users and receiving great reviews for its innovative design and capabilities. Everybody is raving about circles, the cool picture albums, and the way Google integrated its other properties. After having attracted over 750 million users, Facebook is now finally feeling the heat. Or is it?

Google+ has quickly attracted millions of users, enjoying what’s perhaps the fastest growth in history. However, when I look at the type of communication on Google+, I mostly see my professional ‘friends’ posting links to their own blog posts and articles. I do the same - we have all quickly jumped aboard since we understand the power of social media and we use Google+ as a free advertising tool. In fact, out of all the people in my Google+ circles, the only one posting something personal is Sergey Brin.

There is one fundamental challenge that Google+ has and it is not the features or design. It is a great tool but it doesn’t connect me with any new users. So far, I have been only connecting with the same folks I am already connected with on Facebook or on Twitter. And since we all are already connected on those networks, we continue using them since they work just fine.

When I started using Twitter after I was already on Facebook, I was able to ‘connect’ with many new people. The connections are of different type. I am connected with people like Richard Branson and Pete Cashmore on Twitter even if they don’t know me and care about me. Twitter makes it easy to connect with such people since it allows unilateral connections via “following”. On the other hand, my friends on Facebook know me and I know them - it is a bilateral connection where both sides agreed to connect. There is a difference between those two tools which is why I am using them both.

Google+ is not different. Sure, I have joined just like everybody else who’s actively using Facebook or Twitter is going to do. Curiosity drove me there and perhaps the urge not to be left behind. But it will be hard if not impossible for Google to throw enough new features at me to make me move at the cost of Facebook or Twitter. To do that, one of two scenarios would have to occur:  

1. I would start using Google+ actively if all my contacts would use it as their primary social network, at the cost of Facebook and Twitter. That’s a hard one to achieve since both Facebook and Twitter are thriving and continuing to add users and - more importantly - traffic. This is the challenge with social networks - according to the Metcalfe’s Law the networks become more valuable as more users join in. But that means that a network replacing another one becomes only useful if it reaches a critical mass of users. And “users” means not people who have signed up but people who actively engage.

2. I would start using Google+ actively if it allowed me to connect with new users with whom I am not already connected with on Facebook or Twitter. There are plenty of people I know who are not on Facebook or Twitter and there are plenty of interesting people out there I don’t know at all. Google needs to find a way to connect me with those folks. That’s what Facebook and Twitter accomplished due to the different type of connections they allow. Find a way how to engage the social media skeptics through some new, must-have services. Or find a way to suggest connections with people who could be interesting to know through a new type of connection. But don’t copy Facebook and Twitter.

Of course there is a third scenario possible, if either Facebook or Twitter stumble. They could become sleezy and offensive like MySpace did or nerdy and lame like what happened to Second Life. They could implode due to lawsuits, privacy invasions, availability issues or talent drain. They could go public and start making irrational moves under the pressure from Wall Street. All of that is possible. But on its own, Google+ needs to make happen one of the two scenarios above. And that’s not happening right now.

Thursday, August 18, 2011

HP Kills Palm

In April 2010 - not even 18 months ago - I wrote my comments about the then announced acquisition of Palm by Hewlett-Packard. Back then, I was speculating about five possible scenarios and I guess I was wrong. The scenario number 6 has occurred and HP pulled the plug on the Palm devices and probably also on the webOS mobile operating system today.

This move doesn't come as a big surprise. Yes, it is unusual for a company with the kind of resources that HP has to give a project that little time to prove itself - particularly a relatively recent $1.2 bln acquisition. But since the launch of it's new webOS based devices just a couple of months ago (in February 2011), it became apparent that they were flopping in the market place. Just earlier this week, it was reported that Best Buy sold less than 10% of the 200,000 Touchpads they ordered. Clearly, the mobile devices market is becoming a market space where you either make it big or go home. HP is leaving now.

That begs the question: how will this move reshape the mobile market. Apple is today clearly the player to beat. Until this week, I thought that Google was the a number 2 (or even number 1) but their acquisition of Motorola announced earlier this week has potentially put Android on a new trajectory and I see plenty of challenges ahead. But today, Google is certainly one of the top 2 vendors in the mobile market place.

The position number 3 is heavily contested. Microsoft wants it really bad and they have made a lot of good moves so far. Their deal with Nokia was received somewhat skeptically at first, but it makes much more sense since the Google/Motorola deal. Microsoft now stands a good chance to take over the spot number 3 and perhaps even number 2 in the foreseeable future, particularly should Google mess up with Motorola.

The position number 3 is currently occupied by RIM and RIM appears to be under a lot of pressure now. RIM has missed its numbers in the June earnings announcement and has been losing market share at an alarming pace recently. Yet, RIM and its BlackBerry franchise do have an impressive installed base and an access to the enterprise market that other vendors envy. That makes RIM a likely target and there is plenty of possible suitors about.

So where does that leave HP? Well, they may decide not to participate in the mobility games any longer just like their big rivals IBM and Oracle. HP's new strategy appears to be following IBM's example by divesting the PC business (which was also announced today) and focusing on "higher margin growth categories". Both were acquisitions, by the way - remember Compaq (2002) and EDS (2008)?

If HP decides to participate, it has three options:

1. Embrace Android which would make them a Google partner. That's less likely now as Google's Android strategy is at crossroads and since HP also announced the acquisition of Autonomy today which puts it on a collision course with Google in the enterprise search space.

2. Go with Windows Phone which would continue HPs long standing partnership with Microsoft. This is quite a feasible scenario but HP appears to be wanting to get out of the hardware business today. By the way, how ironic is it that while HP is getting out, Google - the ultimate Internet company - is getting into the hardware business by acquiring Motorola?

3. Acquire RIM which would fit HP's focus on the enterprise market. As I said above, RIM is likely to be in play soon and HP could indeed be one of the suitors. HP would probably not shy away from the high price tag of $15-20 bln or more - they have spent big money like that in the past. And the RIM acquisition by HP appears less problematic than by Microsoft, Google, or some of the fence-setters such as IBM, Oracle or Cisco.

In the end, I dare to predict that HP will stay out of the mobile devices market. If they want to be more like IBM, they are better served by focusing on services and remaining hardware agnostic. Too bad about Palm, though, as that was a good piece of technology. I still remember when US Robotics shipped the first Palm Pilot back in 1996 - the first successful personal digital assistant (PDA) which is how we called smartphones before they had the 'phone' feature. Well, an era has come to an end. After the demise of Nokia's Symbian, there is yet again one less contender in the mobile race. It is a four-horse race now with Apple, Google, Microsoft and RIM and there are only three (or less) spots left!

Monday, August 15, 2011

Why the Google's Purchase of Motorola Could Be Great News for Microsoft

Google surprised many this morning by announcing its intent to acquire Motorola Mobility, the mobile device manufacturer that has recently created by the Motorola split. At $12.5 bln, Google is spending some serious change - not that they can’t afford it - which only underscores the importance of mobility today and going forward. The stakes are high and so it is not a surprise that the key contenders are jockeying for positions.

So what are the consequences of this move? Google has been touting its Android operating system as open and open sourced and it was very successful in attracting many different hardware manufacturers including Samsung, HTC, LG, Dell, and, of course, Motorola. By buying Motorola, Google will need to convince the other vendors to stay with the Android OS which may be tricky now that Google is a direct competitor. Sure, Google sold its own smartphone in the past - the Nexus - but that was just a tactical maneuver to get Samsung and co. motivated and the phone was discontinued soon after they started shipping. Now with Motorola, Google is firmly in the competing corner.

None of the vendors licensing Android have been using Android exclusively and they all have other options. To stay with Android, Google will have to convince them that there is a solid Chinese wall between Motorola and Android to avoid any channel conflict. Google doesn’t have any credentials in that. Google will have plenty of struggle to combine its highly profitable advertising business with the low margin, highly competitive hardware business from Motorola and Motorola isn’t a small bite to swallow. Controlling both the software and hardware could give Google a leg up over the immensely profitable Apple franchise which in a way validates Apple’s closed and vertically integrated strategy.

The Motorola acquisition may motivate other Android phone makers to look for alternatives and the most obvious one is Microsoft. Many of these vendors are already shipping a Windows Phone based product and the Google acquisition of Motorola is likely going to send a strong breeze into Microsoft’s sails. It could possibly also give RIM a little bit of a reprieve, even though RIM is not ready to license out its own mobile operating systems (yes, they have two - the BlackBerry OS and the QNX). Similarly, Apple will not likely license its iOS to other vendors but should enjoy a boost in marketshare while the Motorola deal is being sorted out.

Some pundits call for Microsoft to acquire RIM and/or Nokia in response to Google’s move. I suggested the Microsoft-RIM marriage a long time ago but since the Nokia deal, that acquisition is less likely. In fact, Microsoft is standing strong right now as a dependable operating system vendor from whom all the device manufacturers can safely license the mobile OS. All of a sudden, that sounds much more attractive than licensing from the hard-to-predict Google. I think that the status quo is working really well for Microsoft. And even Nokia, having bet the house on Windows Phone must be breathing a sigh of relief.

Google actually claimed that the primary rationale behind the Motorola acquisition is the pile of patents that come with the deal. Well...whatever. I think that the patent wars that are currently raging between Google, Apple, Microsoft and others are not helping customers and that they are very detrimental to the industry in general. The patent laws may have to evolve but that could be a topic for another blog post. Besides, why is everyone claiming that their pile of thousands of patents is better than the other guy’s pile? Since when are patents sold by the pound?

To sum it up, the Motorola acquisition is a very risky and pricey move for Google who’s finding itself on an unfamiliar ground with hardware and who’ll have a lot to prove to keep Android open. I also believe that this deal has opened the door for Microsoft who’s suddenly looking like a safe bet when it gets to licensing a decent mobile operating system. It will be fun to watch how this is going to play out.

Tuesday, August 9, 2011

The Cloud and the Asymmetric Patriot Act

USA PATRIOT Act of 2001
There have been numerous articles recently about cloud-based companies and their policies in regards to the Patriot Act. Most recently, Dropbox and Microsoft Office 365 have generated headlines when the press found out that their end user license agreement includes clauses that basically state that the company may have to hand the customer data over to the law enforcement authorities under certain circumstances – such as to comply with the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (in short USA PATRIOT Act).

Microsoft drew an additional dose of criticism as their policy apparently implies that they would repatriate and hand over data from European customers, even if the data resides on European soil. That, in turn, would be in violation with Europe’s data privacy and safe harbor laws which raised many eyebrows. Unlike the United States, the Europeans take personal privacy much more seriously. For example, an employee’s email belongs to the employee in many European countries and not to the company as it is the law in the US. By the way, am I the only one who finds the whole notion of cloud data residing on some country’s soil a little paradoxical? Since when do clouds care about borders?

My take is that the problem might not lie with the cloud based companies and their frivolous attitude towards their customers’ data. I believe that the challenge lies in the Patriot Act itself. The Patriot Act has been signed into law in October 2001 as a response to 9/11 and it was extended in May 2011. The Act grants the US government sweeping privileges to access private data in case of suspected terrorist threats. The US law enforcement agencies can apparently get your private data by requesting access to say Dropbox servers because suspected terrorists might be allegedly using Dropbox to plan their activities.

This kind of law would seem to violate the 4th Constitutional Amendment which protects citizens against unreasonable searches – law enforcement is supposed to get a court order and not many European courts would ever allow this. But the Patriot Act has been passed in the wake of 9/11 and anything to protect the US citizens from terrorists has a higher priority than protecting their civil liberties.

This reminds me of the speech that Sun co-founder and former Chief Scientist Bill Joy gave at TEDtalks back in 2006. Joy spoke about the asymmetric threats in the scary world we live in: “We can’t give up the rule of law to fight an asymmetric threat and we can’t fight the threat the stupid way we are doing because a million dollar act causes a billion dollar damage which causes a trillion dollar response which is largely ineffective and almost certainly has made the problem worse.”. If anything, Joy’s speech was understated as the 9/11 response has reached several trillions by now. The Patriot Act is part of that response and the cost keeps rising.

The effectiveness of the Patriot Act has been questioned many times but that’s not my point. The terrorists aren’t stupid and they know about it and they know about plenty of other data sharing services that are not run by American companies and are thus not subject to the Patriot Act. My point is that the generic and sweeping authority that the Patriot Act gave to the US government is scaring the good guys away from the Cloud.

At least 99.99% of people are not terrorists; they are people like you and me and we get all nervous about using online services that do not offer us sufficient privacy. Many countries have a culture and laws that demand a much higher privacy protection than the United States.  The customers are already worried about the hackers who could compromise their information. And now, even the government is snooping in my data?  Perhaps, my data is better protected if I use the online services of a company based in the Germany or Canada - countries that are not subject to the Patriot Act?

The US economy needs stimulation. We shouldn’t be scaring away the privacy-loving Europeans. The United States could easily be known as the country where your data is the safest – attracting business from the entire world. But that is not what people think today. Right now, the secure data hosting business is going elsewhere.

The press is crucifying US cloud companies for the alleged vagueness in their end user policies. But what if those companies just try to do business in an environment that effectively forces them to have such clauses in their policies? Is the media barking up the wrong tree?

I know that there is a lot of good that came out of the Patriot Act but I suggest that in the era of cloud computing, it may need to be reviewed and possibly amended.