28
Mar

Why did Yahoo Buy Summly Part Two

Today we found another likely driver for Yahoo’s Summly acquisition. In an article titled Citrix: Windows Phone is barely making a dent in the Workplace, Yahoo actually presents no more than a condensed summary of the cited article, which provides the title to this content. But the article is actually published on someone else’s site. Cool.

By the way, the condensed summary is bracketed with paid display advertising, which brings in some serious cash. Not bad when one considers that software produces the condensed summary and some more software builds a display ad rotation schedule for the sidebars. Little human intervention here. We knew that content annotation was promising, but this system is content management on steroids.

We found this out, accidentally, by using one of the content curation tools that we use daily, newsisfree, on one of our daily searches for news on “enterprise computing”. The article was correctly attributed to Mr. Brad G. Reed, but the link went to Yahoo, not Mr. Reed’s web publisher. More on this one in a coming post to this blog.

With Summly waiting in the wings, the Yahoo annotation engine stands to benefit from a better algorithm, producing shorter summaries and more display ad space. When one considers that Summly brings to Yahoo an established leading position in the small mobile device market for the same type of service (see our first post on this topic, published yesterday, March 27, 2013 for more on this last point) the purchase price looks to be a bargain.

Early stage ISVs with the potential to produce competitive, or at least related, products for the content curation, annotation or aggregation markets should study the Summly story. We think each of these three markets have good legs. People are on the go and need near immediate access to information whether for a very wide range of needs. There is certainly a lot of room in these markets for new players, not to mention a key ingredient — further innovation.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

28
Mar

Why did Yahoo Buy Summly? Part One

On the 25th of March, 2013, Yahoo publicly announced a purchase. Yahoo bought a small ISV by the name of Summly. The acquisition made the front page of the New York Times, the Wall Street Journal, and lots of other publications. The most interesting point about the acquisition for the general public is the age of the CEO of Summly. The CEO, Mr. Nick D’Alosio, is 17 years old and, as of now, likely a millionaire.

But we didn’t find much interesting about this point. The US and most of the western world is rather taken up by youth, but we don’t share their fascination. We were after a real answer to the question of what Yahoo found so compelling about this company to justify an acquisition.

A visit to the Summly web site produces no information of any significance. But a visit to the cached web page for the company with Google did reveal a lot of useful information:

  1. Summly won the “Innovative Touch” award for 2012 from Apple for iPhone Apps. But what does “innovative touch” mean? We found some equally obscure descriptive information on this topic at iPhoneLife, something about ” . . . apps that use new forms of gestures and unusual ways of interacting with content.” (quoted from the iPhoneLife web site)
  2. The Headline banner on the old Summly site reads “Pocket sized news for the iPhone” and, just below, “News you want. Now” — OK, but what’s the big deal about these benefits? After all, there are literally hundreds, if not thousands of news apps for iOS to choose from, almost all of which offer a summary feature

There is even a video on the cached site, and, yes, it does work.

This short video told us a lot.

Summly is a curation tool like Newsisfree, or one we liked a whole lot but can’t use lately, Eqentia. We like these tools quite a bit. We also agree with the point made in the short video: there is just too much “drivel” (quoted from the video) out there to put two and two together, successfully, on most topics. Curation tools are useful to get to the point you’re after at a more rapid pace than pushing through a lot of useless content.

In the next post to this blog we’ll dig further on this one.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

27
Mar

Open Source ISVs are Not Immune to Market Migration to Cloud Computing Options

On March 25, 2013, the US stock brokerage firm Raymond James downgraded Red Hat to “Market Perform”. The reasons for the downgrade included:

  • Signs of diminishing interest, from enterprise business, in the Red Hat Linux system, and,
  • Conversely, signs of greater interest in cloud computing alternatives from the same market

Red Hat will not report quarterly earnings until Wednesday, March 27, 2013. If the analysts at Raymond James are correct, the likely drop in revenue at Red Hat will signal a new freedom for enterprise business. In 2013, the costs associated with maintaining an on premises data center are no longer mandatory. On premises data centers present the most security method of enterprise computing, but elastic services like Amazon Web Services and Microsoft Azure are too compelling, from a cost perspective, for enterprise businesses to any longer ignore.

Improvements in virtualization technology are also likely drivers of this new direction. Products that not only virtualize servers, but also networks, themselves, promise substantial reductions in the cost of operating computing infrastructure. Early stage ISVs with solutions that contribute to the cost savings enterprise businesses can realize by implementing as much virtualization as possible are looking at a promising future.

Red Hat sells all of the components enterprise businesses require to build private and even public cloud services, but stops short of offering to host cloud efforts. Their web site promotional content looks to us a lot like what we used to see at VMware. But VMware has radically changed their message on this subject. Cloud products and services are prominently featured on their web site. They’ve even included a video presentation from Gartner on the topic to add authority to their message. Red Hat is likely to follow along the same path. Don’t be surprised if shortly you find a much larger section on cloud computing on the Red Hat web site, along with a new hosted services offer.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

26
Mar

Indoor Geolocation Services Look promising for the Future

In an article titled Apple Buys Indoor GPS Specialist in Map War Jessica A. Lessin notes a problem presently impeding further development of location-based marketing services for retailers: “how to detect a mobile-phone user’s location when the user is indoors and traditional GPS technology doesn’t work.”

The company that manages to overcome the hurdle is poised to capture a segment of online advertising with, as we see it, more promise than most. We think it will be easier for retailers to produce results from advertising targeted to consumers shopping in a mall, than has historically been the case for shoppers shopping online, from home.

We also think it is a big deal that the company that purchased WifiSLAM happens to be Apple. Few brick and mortar retailers have been as successful at Apple over the last 5 or more years. Whether WifiSLAM continues to operate as an independent entity, or is, in some way, rolled into the rest of Apple’s retail marketing effort, owning at least one entrant in the race to breakthrough the indoor geolocation barrier is not critically important. We think Apple benefits either way.

What attracts us about this market is not the size as much as it is the atmosphere surrounding product promotion opportunities. Consumers walking through malls are usually on a hunt to buy something. Promoting products directly to them as they make their way past shop after shop brings online advertising much closer to people who really want to buy something. We think conversions will be higher. We also think consumers will benefit more from exploring the products presented to them through an indoor online marketing system. Few consumers have the time to research all of the products sold by all of the shops in a mall, But connecting a consumer’s past buying history with items on sale at specific locations within a shopping center is almost certain to deliver better results.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

25
Mar

How has a Surge in BYOD Affected the Education Software Market?

On Saturday, March 23, 2013, The New York Times published an article by Matt Richtel, Digitally Aided Education, Using the Students’ Own Electronic Gear. In this article, Mr. Richtel signals a shift in the market for educational software from on premises to cloud, software as a service (SaaS) applications: ” . . . a growing number of schools are adopting a new, even more controversial approach: asking students to bring their own smartphones, tablets, laptops and even their own video game players to class.” (quoted from Matt Richtel’s article, a link to which has been provided here).

Smartphones, tablets and video game players use browser clients to access cloud applications. Laptop OSs like Microsoft® Windows and Apple OS X continue to work very well with clients for either software served on premises, or browsers for SaaS. Mr. Richter quotes Professor Elliott Soloway of the University of Michigan who opines on a new trend, schools encouraging students to “bring your own device” (BYOD) to the classroom. Professor Soloway thinks public school administrators are ” . . . hoping there’s going to be a for-free solution because they don’t have any money.” (ibid). The history of SaaSs offered over the Internet includes many examples of free applications — every browser, Facebook, Google, Yahoo, and more. We think it makes sense for educational software ISVs on the lookout for near term markets to concentrate on building SaaS applications.

Articles like this one by Mr. Richtel provide simply another example in a growing list of reasons why ISVs should plan on delivering products over the Internet. ISVs with a deep commitment to products that require an installation on premises will face an increasingly difficult obstacle.

The security argument for on premises computing is compelling (in the past we strongly advocated this position), but our review of some of the history of security breaches point more to SaaS users not following correct guidelines, as the true culprit, rather than flaws in the technology.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

22
Mar

Were Oracle’s Q3 Results a Harbinger of a Fundamental Shift in Enterprise Database Purchasing Trends?

In article published in the March 22, 2013 edition of The Wall Street Journal, “New Rivals Clip Oracle’s Wings”, several wall street analysts present their opinions about the near term prospects for Oracle Corporation. We found several points of interest in the article.

Michael Hickins, who wrote the article with contribution by Rachel King, writes that “Safra Catz, Oracle’s co-president and chief cinancial officer blamed the sales miss on Oracle’s own miscues rather than underlying demand for its products.” But “Peter Goldmacher, who follows technology companies at investment manager Cowen and Co., said ‘there is a larger problem here’ than a one-quarter miscue. He noted that Oracle has had three disappointing quarters in the past two years . . . ‘new companies are offering equivalent or better functionality at a better price,’ he argued.”

Juxtaposing Catz’s comments with the quotes from Goldmacher lead us to doubt, at least the insight, if not the veracity of Catz’s comments from a skeptical position. But once we digested the whole article, we had to wonder if our reaction was not excessive. The drop in revenue only amounted to 2.3%, a miniscule difference for a large ISV with an annual revenue rate of $35Bil +. Why is this article leading us to this type of conclusion?

The answer is all about hyperbole. We attended the Bloomberg Big Data Conference last Thursday (seems like ages ago), on March 14, 2013. The observations on NoSQL “databases” (without rows or columns) in Mr. Hickens’ article, together with some of the conference commentary leads us to think that Wall Street analysts spending time tracking ISVs with Big Data solutions are on a hunt for the hackneyed “next big thing.”

But massive relational databases are very much like massive NoSQL “databases” (perhaps data libraries, or merely repositories would be a better term). The same type of tools are required to, once again, tag with metadata for browser, index and categorize based upon taxonomies.

We think the whole discussion is puffed up. Investors should exercise caution.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

21
Mar

Why Early Stage ISVs Should Plan on App Dev that Services Multiple Computing Platforms

Every business, regardless of size, must plan for managing risks. Some businesses consciously build a risk management strategy, while, for other businesses, the process appears to be unconscious, or even missing.

We think an important area of exposure for early stage ISVs can usually be found in their product development strategy. When we look at a product development plan, we ask about the computing surroundings around the tools and applications the business plans to produce. Is this software captivate to a specific computing platform, for example, Microsoft® Windows, of GNU/Linux? If the answer is yes, we usually attempt to learn more about the rationale behind the business’ decision to fully commit development efforts to one computing paradigm.

One needn’t look much further than the historical timeframe from late 2010 to present to note a radical shift in computing. Lots of business users are making radical changes in how they handle their daily computing tasks. Large ISVs, for their part, are contributing to the flux with new offers intended to support users doing what they used to do with desktop computers, but now with tablets, smart phones, or phablets.

A small ISV with one application on the market for MS Windows computing can, literally, plan on a very likely decline in revenue over the next few years as users continue to shift over to computing via other devices with their own operating systems and platforms.

How could this small ISV avoid the mess it might shortly find itself in? We think it makes sense to take core business capabilities and apply them over as wide a computing landscape as possible. If you build workflow tools for Oracle, or Microsoft products, you should explore opportunities to build workflow tools for Google Apps. By taking the steps required to open alternate markets you will provide your business with a defense should a worst case scenario arise. Better yet, write your applications in code that has been proven to be genuinely portable. It also makes sense to develop either a cloud SaaS for your solution, or a version of the solution that works with each of the browsers on the market today.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

20
Mar

What is the Value of Big Data to the Healthcare Industry in the United States in 2013?

The Bloomberg Big Data Conference panel discussion, “Rethinking Risks and Opportunities in Big Data: Healthcare” left us wondering whether the no SQL databases and related tools of big data can deliver high value to the healthcare industry in the United States in 2013. Ed Park, EVP and COO of athenahealth cautioned against simply implementing big data for implementation sake: “Pouring more money into the system hasn’t helped a lot for the last 20 years, and pouring more and more money in over the next twenty years is not necessarily going to help either”. We agree with his point. If IT systems fail to deliver meaningful value, then users cannot be expected to either keep using them, or look to add to them.

We got the familiar sense of a technology with questionable value from the healthcare panel discussion on big data. Opportunities to capture real descriptions of high value from the narratives presented by each of the panelists eluded us. If the best we can do is point to 23andme when citing an example of a business with a high value offer for the public, in our opinion something is missing.

On the other hand, we had a conversation with a colleague from the healthcare industry a year ago with something more meaningful to say on the topic. This individual held a technical management position in the Center for Disease Control (CDC) of the United States Federal Government in Atlanta, GA. The narrative he presented, for us, was much more compelling as he recounted how the Hollywood film “Contagion” actually depicted some of the systems in place at US CDC. The potential for massive repositories of data producing meaningful indicators of where threatening viruses are likely to spread next is a much more obvious demonstration of value than either purchasing one’s personal DNA profile, or crafting a highly persuasive “gentle” reminder to schedule a colonoscopy for someone turning 50.

The predictive capabilities of the US CDC big data systems are also an excellent example of a Cassandra whose warning is never ignored.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

19
Mar

On the Healthcare Panel Discussion from the Bloomberg Big Data Conference, March 14, 2013, Washington DC

The Bloomberg Big Data Conference, held on March 14, 2013 in Washington DC included a panel discussion on the impact of big data on the healthcare industry. The panel was moderated by Matt Berry, Director of Healthcare Analysis, Bloomberg Government. Panelists included Mr. Oliver Kharraz, Founder and COO of ZocDoc, Ed Park, EVP and COO of athenahealth, and David Riley, Chief of Informatics, Harris Healthcare Solutions.

Matt Berry kicked off the discussion with a question. Why should doctors connected to medical practices of any size care about big data? The first panelist to respond to the question was Oliver Kharraz.

Mr. Kharraz prefaced his answer with two points:

First, he observed that big data plays a familiar role in clinical aspect of the healthcare industry; second, he made reference to Cassandra, the character in Homer’s Iliad who had the gift of predicting the future. Despite her predictions, Kharraz noted, the Trojans failed to act on them, with grim result. We aren’t as familiar with the well known role big data (circa 2013) plays in clinical medicine. Nor do we get the point of the Cassandra analogy. If Mr. Kharraz is correct, and someone is not acting on a highly accurate depiction of future reality based on big data, then someone is either foolish, or, perhaps, big data is not as convincing as Mr. Kharraz claims it to be.

He described a highly connected world, where medical services, events and participants interact within closed loop systems. He claimed these systems make a “huge impact” by providing us with concrete evidence, rather than something abstract, of the efficacy (or lack thereof) of specific treatments for specific individuals. He answered Berry’s question, in part, with a conclusion: access to the big data collected from these close loop systems benefits healthcare professionals. Once they can use the data, they gain a better understanding of “what’s in it for me.” We are less than convinced on this point.

He also described “the social engineering piece of [big data]”. Kharraz summed up this aspect as “just getting the patient to do it”, meaning his or her prescribed treatment, through another application of big data. He noted how his product, ZocDoc, is used to send out “reminders of preventative screenings”. He described how the program can be configured to send out a birthday notice to a patient just turning 50 along with a reminder to schedule a first colonoscopy. ZocDoc, he explained, can pull on a big data repository including “millions and millions” of records of messages sent, to select a likely persuasive message for an individual recipient. But, we ask, at what cost need we outfit our practice with this complex social media system to merely send treatment reminders?

Part of the problem, Ed Park of athenahealth observed, is getting healthcare professionals to stop doing things, for a moment, “to gain insight” with a look at big data. Park took a few moments to demystify big data with a reference to an unnamed clinical organization, which paid an outside firm to analyze terrabytes of data about its patients. The objective of the effort was to come up with a picture of the top 5% of people using its services. The results didn’t tell management at the organization anything new. Park concludes, if we are going to point out to healthcare professionals the benefits they can capture with big data, we need to start, by verifying the value of the data itself. We agree with Park.

In the next post to this blog we will continue a description of this panel discussion.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

18
Mar

Energy Sector Needs for Big Data Provide ISVs with Opportunities for Product Development

Michael R. Nelson, Analyst, Technology and Internet Policy, Bloomberg Government, moderated a panel discussion, “Rethinking Risks and Opportunities in Big Data: Energy and Utilities”, last Thursday, March 14, 2013, during the Bloomberg Big Data Conference, held in Washington, DC in the United States.

Amit Narayan, CEO of Autogrid, Inc. noted that “Big Data is all about breaking down silos . . . ” Clearly, if he is correct, then ISVs have an opportunity to develop lots of tools for big data for the energy sector. Power generation and consumption businesses present a unique combination of Information Technology (IT) and Industrial Control System (ICS) computing. The combination of these two highly dissimilar computing architectures amounts to a barrier to entry ISVs can depend upon to retard the rate of commoditization for this market.

Mr. Narayan described an ambitious objective, to transform utility meters from their present role as obstacles to business intelligence gathering, into powerful bridges between what he referred to as “the physics of the grid” and the “economics of the grid.” Power producers own “the physics of the grid” including Distribution Architecture (DA) and the Smart Grid, while their counterparts on the business side work with customers and the “economics of the grid”.

Few if any businesses in this category have connected DA, the Smart Grid and Smart Meters to provide an end to end big data collection method free of silos. Without enterprise wide access to the data, these businesses can’t implement the efficiencies promised by the advanced technology built into each of the components of the system. The result is an experience like Hurricane Sandy, unpleasant for energy producers and consumers, alike.

Some of the tools required to breakdown the big data silos in the energy business must deliver a better method of managing data privacy to users. The panel spent time discussing the question of how data collected from smart meters should be handled. The consensus of the participants (including Mr. Narayan, Mr. Paul Rogers, Chief Development Officer, GE Global Software Headquarters, Mr. Robert W. Bechtel, CTO and Senior Policy Advisor, Office of Energy Efficiency and Renewable Energy, U. S. Department of Energy, and Michael A. Farber, SVP, Strategic Technology and Innovation Group, Booz | Allen | Hamilton) was that the data belongs to the consumer. The energy provider has the right to work with the data, but then needs to return the data to the consumer.

We think the system they described for managing the privacy of data relies too heavily on trust. ISVs can add value by developing tools that transparently provide producers an opportunity to work with data, but, nevertheless, safeguard the ownership rights of the consumer. Any tools in this category should provide a capability to render the data anonymous.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved