A real corporate meeting, avoiding triggering The Boss

This anecdote from a story on Sears struggles is spot on strategic thinking for most corporate meeting:

There, two mid-level employees were preparing a presentation for the CEO, Eddie Lampert, when their boss rushed in with some last-minute advice.

On a chart pad he wrote three words.

“He looks at the presenters and says, ‘Do not say these words to that guy,'” according to a former Sears executive who described the meeting to Business Insider. “That guy” meant Lampert, who would soon appear on a giant projector screen at the front of the room, beamed in live from a home office inside a $38 million Florida estate – 1,400 miles away from headquarters.

The pad with the three words was out of sight of Lampert’s video feed. One of the words on it was “consumer.”

The stakes were high. If any of those words were uttered in front of Lampert, the two presenters would “get shredded” by the CEO, whose frequent tirades had fostered a climate of fear among the company’s most senior managers, said another person – this one a former vice president.

These two and other executives say “consumer” can trigger Lampert. He wants employees to instead refer to shoppers as “members,” which is his term for customers who are enrolled in Sears’ Shop Your Way rewards program.

It was at that moment, as the executive attending the meeting watched fellow employees anxiously censor themselves in front of Lampert, that he realized he needed to flee the sinking 123-year-old company.

That perfectly captures how much energy you need to spend on seemingly ridiculous details to be successful in corporate environments, not only in caustic ones, but pretty functional ones as well. I love chronically this type of tacit corporate knowledge.

The rest of the article is great background on how older companies are struggling to modernize with plenty of anonymized sources telling gritty, but helpful stories.

451: Mesosphere momentum, container usage

From Jay Lyman:

Mesosphere says it is adding enterprise customers and building up deal sizes. The company has also grown its number of employees to 200, up from 150 in March. Mesosphere declined to comment, but 451 Research estimates its annual revenue is in the $25m range.”

And, from a recent survey on container usage:

Our Voice of the Enterprise (VotE) Software-Defined Infrastructure, Workloads and Key Projects survey, conducted in April and May, indicates that out of 718 enterprise IT decision-makers polled 23.7% have implemented containers. By comparison, 25.1% have implemented Software-Defined Networking, 26.7% have implemented Software-Defined Storage and 92.9% have implemented server virtualization.

Source: Mesosphere rises where containers and big data come together in the enterprise

Seeking the simple answer considered harmful

“This ties to our species’ well-documented, frequently harmful distaste for uncertainty. All too often, people latch recklessly onto easy and straightforward answers that happen to be quite wrong. It’s yet another human foible Trump has expertly exploited, and is himself victimized by.

“That’s one of the real prices we pay for not being comfortable with uncertainty,” said Lewis. “We end up seeking out charlatans, people who will tell us with total certainty stuff that is unknowable, and so you end up with bad financial advisers or quacks in medicine — and Trump, who appeals to that need for total certainty, and seems to preserve it in himself by never acknowledging he made a mistake.”

Source: “Michael Lewis on the Psychological Quirks Trump Exploited to Become President”

Snarkily summarizing Trump’s press conference

But the questions kept coming back to Russia, and to the ways that its bad behavior was really all Hillary Clinton’s fault. He mocked her for having travelled to Russia, when she was Secretary of State, with a red plastic “Reset” button as a prop. “There’s no reset button,” Trump said. “We’re either going to get along or we’re not.” He was talking about Putin. But watching Trump on Wednesday was a reminder that, after an ugly campaign, there are no reset buttons to be found at Trump Tower, either, not even ones painted gold. And in nine days Trump moves into the White House.

Some fine tone while at the same time summarizing the highlights.

Link

Word of mouth trumps facts

I recently met with the CEO of a large shoe retailer who said something that resonated with me. To paraphrase, he said, “If I show content that has Kanye West in a pair of our sneakers, along with a link to buy the sneakers, that’s going to be much more successful than an ad explaining why that sneaker is great.” He was referring to the rise of sneaker culture and how stars can have a big impact.

But the flip side is that people believe what they perceive to be “authentic.” We are living in a society where perceived authenticity holds greater weight over right or wrong. Although Google is only a voice command away, we are increasingly less likely to check the veracity of someone who we believe is telling the truth.

Moreover, we are likely to continue believing our friends even after hearing a contradictory truth from someone we don’t know.

With commodity goods like shoes, much of that seems fine: there’s little functional difference between them except the intangible, subjective “feature” of brand that exists only in people’s heads.

On the other end where there are more factual differences between products – let’s say things like bluetooth headphones, cars, computers, and dishwashers – wading through all the comparing fact claims is exhausting and getting a trusted friend to recommend something is valuable. Or, there’s sites like The Wirecutter for people who like to read.

Link

451: Container market to be $2.7B by 2020, from $762m in 2016

451-container-market-2017-01-09

451 Research estimated this week the application container segment reached a robust $762 million in 2016 and is forecast to grow at a 40-percent compound rate over the next four years to $2.7 billion.

And, on usage, from an April/May 2016 survey:

451 Research’s Voice of the Enterprise: Software-Defined Infrastructure Workloads and Key Projects survey conducted in April and May 2016 showed that of the roughly 25% of enterprises we surveyed who use containers, 34% were in broad implementation of production applications and 28% had begun initial implementation of production applications with containers.

I’m somewhat suspicious that there’s $762m in container software and services sales, but who knows, really?

I haven’t read through their entire cloud enabling technologies market sizing yet, from Dec 2016, (basically, private cloud software and services, any things used by *aaS vendors, not the actual public cloud services, which are another market) , which is more than just containers. That market is pegged at $23bn in 2016, going to $39bn in 2020:

2016 CET Market Monitor - Public Cloud vs. CET.png

More on 451’s blog.

Source: “Container Market Pegged at $2.7B by 2020”

When to go private cloud

As represented with the star in the map above, according to CPI data, at labor efficiency of 1,000 VMs per engineer and 66% utilization, these enterprises are poised to beat public cloud on price regardless of whether they use a commercial orchestration software package, an OpenStack distribution or the OpenStack source.

And, on IaaS pricing:

But price still does matter: In a 451 Research custom study commissioned by Microsoft earlier this year, the biggest reason to change primary provider was price, cited by 34% of respondents. Consumers don’t necessarily want the cheapest cloud service, but they don’t want to feel ripped off. If there is a cheaper option elsewhere, it appears end users will take it into consideration.

Announcements on price cuts gather attention, and are a great publicity and discussion tool for service providers. We think cloud prices will continue to come down through 2017, and may spread beyond virtual machines into object storage, and perhaps even databases – virtual machines came down 7% globally in 2015, but the cost of our small application only came down 2.4%. The fact that margins are still healthy suggests providers aren’t sacrificing huge amounts of gross margin to give such cuts. If they are, it might be a few nickels and dimes here and there, but it’s more likely that they are reducing costs through better procurement and management. If we are in a cloud price war, we’ve yet to see it really get off the ground.

And, see more commentary on the topic of IaaS pricing.

Source: Cloud gross margins: The price war has yet to really kick off

From “The Call of Cthulhu”

The most merciful thing in the world, I think, is the inability of the human mind to correlate all its contents. We live on a placid island of ignorance in the midst of black seas of infinity, and it was not meant that we should voyage far. The sciences, each straining in its own direction, have hitherto harmed us little; but some day the piecing together of dissociated knowledge will open up such terrifying vistas of reality, and of our frightful position therein, that we shall either go mad from the revelation or flee from the deadly light into the peace and safety of a new dark age.

“The Call of Cthulhu,” H.P. Lovecraft

From “The Haunter of the Dark”

Against these, some two miles away, rose the spectral hump of Federal Hill, bristling with huddled roofs and steeples whose remote outlines wavered mysteriously, taking fantastic forms as the smoke of the city swirled up and enmeshed them. Blake had a curious sense that he was looking upon some unknown, ethereal world which might or might not vanish in dream if ever he tried to seek it out and enter it in person.

“The Haunter of the Dark,” H.P. Lovecraft.

TrumpTech: If the rocket scientists can do it cheaper, surely IT can too

Boeing and Lockheed were already worried about their costs long before the election. If I were the United Space Alliance, I would be even more terrified of the danger of losing government business now. And those of us in federal IT need to realize that our time may be around the corner.

As we discussed in the 2017 predictions show last month, the Trump adminstration is clearly not reliable in it’s agenda or principals for any reliable, let alone logical, predictions. Cutting spending in favor of “non-traditional” options, though, seems like something they’d goof into.

Link

TrumpTech – survey on Joe Six Pack’s sentiment, telco predictions

I didn’t check the legit’ness of the survey, but:

When it comes to tech priorities for the next four years, the general public doesn’t have the same agenda as tech leaders. For example, only 8% of the general public cares about the Internet of Things and only 5% sees 5G development as a priority. STEM education is only a priority for 13%.

What they do care about is security and hacking, particularly of government data (43%) and consumer data (38%). So if Trump’s administration does come into conflict with the social media and cloud giants, he’s going in with the public’s backing.

There’s no majority belief among either the tech elites or the general public that Trump will make the tech industry more innovative than before (42% and 39% respectively). Among the general public, the largest percentage believes that no change is the most likely option (40%), while more tech elites than Joe Six Packs fear stagnation (28% v 21%).

And, labor-wise:

Some 37% of the general public sees technology as a job destroyer for the average American. The sector is accused of bringing in foreign workers to the US by 70% of the general public and of shipping jobs overseas by 60%. (To be fair, the tech elites go along with these two conclusions!) Over half of the general public (56%) believe that US citizens should be given preference for tech jobs.

Meanwhile, one of the outgoing administrators says there’s plenty of tech jobs, just not qualified candidates:

These efforts will founder if there isn’t a continuing supply of qualified recruits, so next up is to increase access to high-quality science, technology, engineering and mathematics (STEM) education. Underlying the importance of education, the OST noted that more than 600,000 high-paying tech jobs went unfilled in the U.S. in 2015, and the number has only grown since.

See also another outgoing letter that encourages continuing programs that ease IT procurement and shared, cloud services like cloud.gov. Seeing how the Truml administrators treat those programs will be a key litmus test. As I alluded to yesterday, these types of programs seem like ideal “do more with less”/”copy the private sector” programs that fit into Trump’s campaign rhetoric. But, hey: hypocracy ¯_(ツ)_/¯

Telco M&A and regulations

Also, see this extensive net-neutrality/telco prediction piece from Caroline Craig.  With more from 451, if you have access

Despite a very activist FCC under President Barack Obama and Wheeler – resulting in stringent net-neutrality and privacy rules, and a pro-competitive view of mergers and acquisitions – US telecom operators recently have been more than willing to push the envelope. Multiple operators have experimented aggressively with zero-rating. Verizon, in particular, has explored the edges of consumer privacy – from its so-called (and abandoned) ‘super cookie’ effort to its ongoing emphasis on mobile advertising, including customer-data-driven ad targeting. While some industry M&A has stalled, AT&T’s surprising bid for Time Warner pushed the boundaries of vertical integration. A Trump administration looks to be much more hands-off, likely accelerating industry M&A and encouraging telecom providers to experiment freely, with the forces of the competitive market (rather than regulators) reining in anti-consumer oversteps. As the mobile market is now constituted – with four highly competitive wireless operators and a slew of cable operators and other disruptors (e.g., Google and new IoT upstarts) ready to leap in – we’re okay with that. No one wants an anti-competitive industry structure or to see consumer privacy exploited, but overly harsh limits can be destructive, too. It’s up to mobile and broadband operators to not abuse their likely new freedoms, and up to their customers (and regulators) to punish them if they do.

Bonus! check out the huge uptick in digital advertising spend this cycle:

As a matter of fact, digital media spending for 2016 political campaigns was projected to top $1 billion, contributing 9.8 percent of media spend. Comparatively, digital spending during the last presidential election season in 2012 was $160 million. 

Link

Creativity: not much needed at your job

Capabilities such as creativity and sensing emotions are core to the human experience and also difficult to automate. The amount of time that workers spend on activities requiring these capabilities, though, appears to be surprisingly low. Just 4 percent of the work activities across the US economy require creativity at a median human level of performance. Similarly, only 29 percent of work activities require a median human level of performance in sensing emotion.

Four fundamentals of workplace automation

Keeping money at the top

Given that the wealthiest 10% of Americans own 81% of all stocks and mutual funds, these uses of corporate cash are a direct transfer of corporate profits away from creating jobs and capital investment, increasing income inequality. And the repurchase trend has accelerated radically. Stock buybacks as a percent of capital spending have risen to an all-time high of 113% in the last five years, compared to 60% in 2000 and 38% in 1990.

The $520 billion that companies spent on 2015 stock repurchases alone is enough to pay the average U.S. wage to 11 million workers — considerably more than our 7.8 million citizens who are currently unemployed. To put this in a different perspective, the amount corporations spent on stock repurchases in 2015 that went to the wealthiest 10% of the population was $60 billion more than the total federal government spending on all safety net programs combined.

From How Big Business Created the Politics of Anger, March 2016.

2016 average total return of IPOs was 23%, $15.2bn in tech M&A

why-so-serious

Investors are betting 2017 will be better. Renaissance Capital pointed out that the average total return of I.P.O.s in 2016 reached 23 percent, a sharp reversal from the negative 2.1 percent return of 2015 offerings and surpassing the 21 percent return of two years ago.

So says a startup IPO wrap-up from Meanwhile, in the enterprise tech space, Brenon over at 451 reviews 2016:

The number of enterprise-focused companies that have set sail to Wall Street this year is once again mired in the single digits. That’s a disappointment given the abundant IPO-ready tech vendors and a bullish investor base that has pushed the broader US equity market to record levels in 2016.

By our count, just eight enterprise tech firms have made it public on the two major US exchanges so far this year, matching the total from 2015.

Those companies:

Company Date of offering
SecureWorks April 22, 2016
Twilio June 23, 2016
Talend July 29, 2016
Apptio September 23, 2016
Nutanix September 30, 2016
Everbridge October 10, 2016
BlackLine Systems October 28, 2016
Quantenna Communications October 28, 2016

But, the reason isn’t a lack of exits, there’s been much M&A in tech this past year, as Scott says:

Total M&A spending on infrastructure management jumped 57% to $15.2bn, with the volume of transactions rising to 152 from 146 as we near the end of 2016.

There are some big chunks in there – like the weirdly structured HP/MicroFocus deal for HP’s Software and cloud software groups which was $8.8bn, but left HP owning 51% of the combined company…so whatever you call that kind of deal.

It’s be even more helpful to see what the profits/returns on these deal were. Brenon has this on those eight tech IPOs:

The valuation of these acquisitions underscores the fact that December dealmaking has featured more ‘value’ than ‘growth’ strategies. All five of this month’s biggest deals have gone off at less than 4.4 times trailing sales, which is the average multiple for the 50 largest transactions announced overall in 2016, according to the M&A KnowledgeBase. On average, buyers in December have paid 3.3x trailing sales, a full turn lower than they did in the previous months of the year.

Can’t get enough of that computer in your pocket

Nomophobia (/’noʊ-moʊ-‘foʊ-biː-ə/; noh-moh-pho-bee-ah): Fear of being without one’s mobile phone.

No-mobile-phobia, or nomophobia, is probably one of the great universals of the day. This newly minted word describes a real problem internationally, as we all grow ever more attached to the tiny devices that dominate our lives. The word appeared on both British and American captioning professionals’ lists.

Link

It’s Not the Economy, Stupid

Rational anaysis is hard to find in real life:

But in Elkhart, people have jobs they didn’t have six years ago, and they’re working more hours. Their homes are worth more than they were before Obama took office, on average, and their paychecks are fatter than they used to be. Yet Obama is, and will likely remain, the president who didn’t do anything right.

Link

Meddling with Apple and Chinese Manufacturing

A nice discussion that highlights the complexity id trade policy and, thus, rhe high risks of fucking it up. I like this critique of trade criticism:

What makes Navarro’s critique challenging is that it’s not wholly wrong, at least from the American worker perspective, yet it’s not particularly actionable.

So often, that last part is overlooked: you have to actually be able to on something, despite the past. Until we have time machines, finding flaws and suggesting how we should have fixed them is little use on its own. Sure, you need a good analysis of history to figure out what to do next, but it’s deciding what to do next, and doing it, that count.

Link

Cloud Foundry’s Vision: A Services Ecosystem that Transcends Containers

“What’s the whole point of Cloud Foundry? It’s an abstraction on infrastructure,” stated Kearns. “And really, if you net it even further down, the whole point is to absolve organizations — particularly, traditional, non-tech organizations — from undifferentiating heavy lifting. What that means is, working on things that are not relevant or differentiating for your business.

Also, much discussion of the history of service broker/registries.

Link