Assuming the company still wants to buy Yahoo after a massive hack of 500 million of its email users, Verizon will own properties generating about $4.6 billion a year in digital ad dollars, according to eMarketer research. That’s still just a fraction of Facebook’s $12.1 billion and Google’s $53.1 billion.
And unlike its forecasts for Facebook and Google, eMarketer projects no growth for Verizon’s piece of the pie even while the overall pie is growing—by as much as 20% a year, based on an estimate from Pew Research…. What’s worse for Armstrong, and everyone else competing for ad dollars, is Morgan Stanley’s assertion (paywall) that 85% of every new digital ad dollar in the first quarter of 2016 went to Facebook and Google.
Whitehurst thinks no one is paying enough attention to Open Stack, the freely-available software stack. “We had three deals over a million dollars last quarter,” for Open Stack, said Whitehurst. “We are finally seeing it move into production in a pretty significant scale. Verizon [Communications] and others are running our Open Stack, and so to reach that production point is pretty exciting.”
The research company found that owners of the Echo spent around 10 percent more after they bought the voice-powered smart speaker than they did before.
The NPD Group’s Checkout Tracking purchase monitor provided the data, analyzing customer spending and overall number of receipts, and found that there was also a 6 percent bump in the overall number of purchases made by Echo owners on Amazon.com when compared to their pre-Echo existence.
I cut the below montage-y overview of the history of enterprise open source from a Register piece I’m working on. Here it is!
For me, the dawn of enterprise open source was somewhere around 2001 when IBM committed billions of dollars to shoring up Linux. Around this same time, the Eclipse Foundation (also launched by IBM) started it’s IDE market re-rigging, and the Apache Web Server was climbing the hill to market dominance piloting the way for the rest of the Apache Software Foundation.
Java’s history is representative of open source’s involvement with most infrastructure software. Java started as closed source, holding onto that model like a waterlogged man hugging floating detritus. Despite this, in the 2000s Java’s course was changed by the influence of open source with the likes of Fleury’s JBoss crew (how I miss their pirate-like antics!), Apache Tomcat, and the Spring Framework. These and so many other open source projects acted as forcing functions for innovation in Java and still do. Eventually, Sun open sourced Java, both JBoss and Spring were gobbled up by larger companies, and open source became the norm in the Java world.
To top this all off, Microsoft open sourced .Net in 2014 and now supports a wide array of open source software in its Azure cloud. Open source is the de facto standard when it comes to new infrastructure software.
Some interesting ideas to improve debit (and credit, one’d presume) with software-driven features:
CardGuard provides additional protection against fraud, since customers are able turn their debit card “on” or “off.” When the card is “off,” no withdrawals or purchases will be approved, with the exception of previously authorized or recurring transactions. Additionally, transaction controls can be set according to location, meaning transactions attempted outside of the geographic parameters set by the customer will be declined.
With CardGuard, customers are able to better manage their spending by establishing limits for debit card purchases based on the amount of the transaction. Additional controls can be set to manage spending in different categories by enabling or disabling transactions for certain merchant groups, such as gas, grocery or retail stores.
On the contrary, as this book will argue, the digital revolution is very much like the industrial revolution. And the experience of the industrial revolution tells us that society must go through a period of wrenching political change before it can agree on a broadly acceptable social system for sharing the fruits of this new technological world. It is unfortunate, but those groups that benefit most from the changing economy tend not to willingly share their riches; social change occurs when losing groups find ways to wield social and political power, to demand a better share. The question we ought to be worried about now is not simply what policies need to be adopted to make life better in this technological future, but how to manage the fierce social battle, only just beginning, that will determine who gets what and by what mechanism.
Underlying the problem is rich people putting all their money under the mattress. Their wealth isn’t flowing down to the rest of the people. These wealthy folks have worked hard, and feel like they’re owed all that money (rather than having taken away by high taxes and redistributed); or, at least, they feel others are not deserving.
However, as the book goes into say, this mind-set ignores how a functioning society enables that success in the first place, and now sustains it:
A makers-and-takers conception of the world is one that neglects the social foundation on which wealth is built. We aren’t merely divided into makers and takers. We are participants in societies, operating according to a broad social consensus. When that consensus breaks down, the wealth goes away. Society either agrees a way to share its riches that most members find acceptable, or the system fractures and the social wealth available to everyone shrinks.
[A]fter pairing, I realized how much of my time I spend staring into space when I program alone.
For the Sun: WTF? files:
Gerstner questioned whether three or four years from now any proprietary version of Unix, such as Sun’s Solaris, will have a leading market position.
One of the more popular theories for the decline of Sun is that they accepted Linux way, way too late. As a counter-example, there’s IBM saying that somewhere around 2006 you’d see the steep decline of the Unix market, including Solaris, of course.
If I ever get around to writing that book on Sun, a chart showing server OS market-share from 2000 to 2016 would pair well with that quote.
If you’ve read Stephen’s fine book, The New Kingmakers, you may recall this relevant passage:
In 2001, IBM publicly committed to spending $1 billion on Linux. To put this in context, that figure represented 1.2% of the company’s revenue that year and a fifth of its entire 2001 R&D spend. Between porting its own applications to Linux and porting Linux to its hardware platforms, IBM, one of the largest commercial technology vendors on the planet, was pouring a billion dollars into the ecosystem around an operating system originally written by a Finnish graduate student that no single entity — not even IBM — could ever own. By the time IBM invested in the technology, Linux was already the product of years of contributions from individual developers and businesses all over the world.
How did this investment pan out? A year later, Bill Zeitler, head of IBM’s server group, claimed that they’d made almost all of that money back. “We’ve recouped most of it in the first year in sales of software and systems. We think it was money well spent. Almost all of it, we got back.”
HPE is remaining part of the CSC and Micro Focus businesses by having a shareholding in the new organisations. It’s fascinating to think what this might mean going forward. It’s like neither business wants to fully commit to where future revenue for their business may lie. I say this because I can only assume that infrastructure sales will become a dwindling business as companies move to public cloud; it doesn’t seem to be enough that infrastructure alone will keep businesses buying on-site solutions.
And, a nice summing up of the HP master plan:
Effectively Meg Whitman is unravelling some of the bad decisions of the last few years, including the purchase of Autonomy and acquisition of EDS in 2008. There’s more focus on delivering infrastructure to clients, rather than moving revenue to services – remember HPE’s public cloud offering was also culled at the beginning of 2016.
Lydia has a great overview of the newest Oracle run at IaaS:
The next-gen cloud currently consists of an SDN (capable of both Layer 2 and Layer 3 networking, which is a differentiator), block storage, object storage, and bare-metal servers (thus the initial moniker, “Oracle Bare Metal Cloud”). Virtual machines (VMs) are coming later this year, with containers to follow early next year. Based on a detailed engineering briefing that Oracle provided to myself and my colleagues, I would say that smart and scalable choices seem to have been made throughout. However, I would characterize this early offering as minimum viable product; it is the foundation of a future competitive offering, rather than a competitive offering today.
She goes on the characterize it as bare-metal and point out that composting of price is not how this market works: you compete on capability. That seems to march Oracle’s core belief system.
This a good parable on what can go wrong in large organizations when incentives are not working as planned.:
But the reality seems to be messier and more boring: Wells Fargo wanted its employees to push lots of real accounts, it asked too much of them, and the employees rebelled by opening fake accounts to get the bosses off their backs. The fake accounts weren’t profitable for Wells Fargo, and no rational executive would have wanted them, which is why Wells Fargo kept telling the employees not to open them. But the employees did anyway because they felt like they had no other choice. It was not an evil high-level plot. It was just dumb. It was a form of employee resistance that was channeled into fraud by bad incentives and bad management. There is a limit on how many times you can ask a guy in a hearing “this thing you did was pretty dumb, wasn’t it?” Though look for the Senate Banking Committee to test that limit.
Knowing very little about the details, back in IT-land problems like this usually mean the culture needs some tweaking.
Check out some more commentary.
It’s been a name-your-own-price market for canny buyers of IBM and compatible mainframes for some time now, but according to the Wall Street Journal, Amdahl Corp is making it easy for even the meekest DP manager to turn into a hard bargainer: it is giving big computer buyers an Amdahl coffee mug and telling them it’s worth $1m if they just leave it on their desk when their IBM salesman comes to call.
CIA Director: What do you think of the girl?
Jeremy: I think she’s fuckin’ smart.
CIA Director: We’re all smart, Jeremy.
Source: Zero Dark Thirty
Check out Gartner’s January 2016 profile of Red Hat, very comprehensive. The company is still fueled by its market-leading position is Linux:
Red Hat is the clear Linux market leader, with a 67% share, and it has established a strong market presence in application infrastructure… RHEL subscriptions still drive about 75% of Red Hat revenue
I was looking for that market share number when writing up HPE/HPE Software/Micro Focus’s competitive chances with SUSE. They’re still worth a shot, of course, but the giant is clearly RHEL. Plus:
There’s strong customer loyalty, based on the “it works” product strategy3
Account loyalty is achieved through confidence in mission-critical capability, dependable support and belief in continuing leading-edge R&D. SUSE and Oracle are the main Mode 1 competitors, whereas Ubuntu (primarily for cloud and Web scale) and CentOS (a Red-Hat-controlled, community edition of RHEL) are rivals better suited to Mode 2.”
And, on the future threat (for mainstream buyers) of containers:
Red Hat’s concern is the user perception that containers abstract away the OS. Red Hat will amplify the message that RHEL 7 is threaded with Docker to deliver seamless micro services. Red Hat is leveraging its vast knowledge base into an analytics advisory service named Red Hat Access Insights, to aid IT organizations on situational use. The deployment profiles can be registered, and Red Hat will correlate patterns of dysfunction and potential fault conditions with heuristics, create callback alerts proactively by the intelligence of impending fault and crash data. This will be offered as an optional subscription service, which would be a huge OS differentiation as infrastructures move increasingly to Web scale, microservices, Mode 2 processes and large scalable configurations, such as SAP Hana and in-memory platforms.
With respect to open source as a business model, I like to track their finances:
They’ve grown a lot of late – $1.3bn by Feb 2013 to $2bn by Feb 2016. Still, as 20+ year old tech company, it’s taken a long time to get there. This establishes two things for me: (1.) it’s really hard to be a pure open source company, and’ (2.) once you do, you’re revenue is going to be pretty low compared to others…for all that effort.
From Nancy Gohring:
In 2015, Dynatrace recorded $466.6m in revenue, including $30m from services and $60m from SIGOS, the mobile network-testing company that Keynote acquired in 2006. Dynatrace’s APM revenue was $376.6m, representing 15% growth over the previous year, and making it twice as large by revenue as two of its primary competitors – New Relic and AppDynamics.
She writes fine reports.
By making it easy for people to buy movie tickets online or through a smartphone app, Fandango has experienced breakneck growth over the last two years. A couple of taps and presto! The seats are yours.
And on the “omni-channel,” even cyberspace has lots of omni:
“Consumers, particularly young ones, find it inconvenient to hop into different silos to get something done,” she said. “They want it all in one place. That sounds obnoxious, I know — the definition of a ‘first-world problem’ — but it’s true, and Fandango is solving it for them.”
The three most admired American companies are Apple, Alphabet, and Amazon, according to Fortune; Facebook is in the top 15 and rising fast. Our attention seems to be ever more focused on our phones, and Apple owns 40 percent of the U.S. smartphone market; between them, Google and Facebook collect more than half of all mobile-display advertising revenues. If mobile phones, software, and social networks eat the world, who decides how big the portions can be?
Pieces like this suffer tremendously from a lack of citations, even better links to the actual studies. More little charts a la the Economist would be helpful too.
Nonetheless, it maps to the intuition we have and the “new model of monopolist” that Ben Thompson points out from time-to-time:
Given that aggregators’ “monopoly” is based on consumer choice it is highly unlikely that any of them will ultimately have antitrust problems in the U.S. absent a substantial shift in antitrust doctrine. And, on the flipside, it is very possible that all of them will ultimately have problems in Europe: Europe’s doctrine of prioritizing competition isn’t so much challenging U.S. tech company dominance as it is challenging the very structure of Internet-enabled markets.
As I recall, Ben ads that is the US, anti-trust is done to benefit other companies: you want to make sure market-share/revenue is shared among competitors. Where-as in the EU, anti-trust is done on behalf of the consumers: you want them to have more choice in the market.
Source: America’s Monopoly Problem
Image from geralt.
Millennials want choice when making a booking, Generation Xers want control over their trip, and Boomers don’t really care about the booking process — they just want a smooth travel experience while staying connected with friends and family.
“Although the major themes are the same for Millennials and Gen Xers, the key variables that make up the themes are different,” the report states. “Millennial business travelers want a variety of suppliers from which you can choose to book and prefer booking travel on a third party website. Meanwhile for Gen Xers, it’s all about the ease of making changes to their travel plans. Gen Xers place a value on the ease of making changes and booking directly on a supplier’s website. Gen Xers value this over having more booking choices. Conversely booking was not an important theme for Boomers.”
More than 80 percent of India is reached by a new 4G mobile network called Jio — bankrolled by India’s richest man — which will be free to use until the end of the year. The price will jump to at least $2.25 per month next year, but the rock bottom price is a play to undercut competitors for the market.