Palantir: Worth $20 Billion?
December 12, 2015
I read “U.S. Data Company Palantir Raises $679.8 Million.” The key points in the write up from my point of view were that Palantir is valued at $20 billion, which may be a record for a company providing search and content analysis. The other point is that the company has raised more than $670 million. The company keeps a low profile and reminds me of the teenage Autonomy from the early 2000s. Value may become an issue at some point.
Stephen E Arnold, December 12, 2015
Data Center Costs
December 9, 2015
I find cost estimates useful and sometimes entertaining. Most companies do not reveal their costs for specific line items. When costs are released, they are “shaped” like clay to present a good looking pot, ash tray, or dish.
I read “Average US Data Center Costs $270 Million over 10 Years.” That works out to $20 million or so every year. Here are some details from the write up, which may make interesting reading to a company with $5 million in revenue:
with the right site-selection strategy, organizations can more than halve their data center costs. The right blend of tax incentives along with careful consideration of land, construction, energy and staffing costs can slash up to 52.1 percent, or $140.9 million, off the 10-year price tag of running a data center.
Another item:
Power costs can also significantly affect data center budgeting. “Power costs average 13.2 percent of the total project cost over the life of the project, but vary from 6.5 percent in Quincy, Washington, to 21.3 percent in Boston,” stated CBRE. Southern California and Silicon Valley also command high electricity rates, while Des Moines, Tulsa and Quincy, Wash. offer cheap power.
And:
Regionally, there’s not much difference in a data center costs. In the western, central and eastern parts of the U.S., enterprises can expect to pay $271.5 million, $270.2 million and $268.7 million on average over 10 years, respectively.
Planning an online intensive, Big Data operation, a Lake Superior sized data lake, and a private cloud? You have some rough numbers.
Stephen E Arnold, December 9, 2015
Alphabet Spells Sell for Sergey Brin
December 6, 2015
I read “Alphabet Inc (GOOG) Major Shareholder Sergey Brin Sells 33,340 Shares of Stock.” Sergey Brin, according to the write up, sold 33,340 shares of the Alphabet Google thing on November 30, 2015. But the interesting part of the write up was this list of Mr. Brin’s transactions:
- On Friday, November 27th, Sergey Brin sold 33,332 shares of Alphabet stock. The stock was sold at an average price of $760.52, for a total value of $25,349,652.64.
- On Wednesday, November 25th, Sergey Brin sold 33,332 shares of Alphabet stock. The stock was sold at an average price of $759.53, for a total value of $25,316,653.96.
- On Tuesday, November 24th, Sergey Brin sold 16,666 shares of Alphabet stock. The stock was sold at an average price of $768.33, for a total value of $12,804,987.78.
- On Monday, November 23rd, Sergey Brin sold 33,332 shares of Alphabet stock. The stock was sold at an average price of $768.31, for a total value of $25,609,308.92.
Fascinating. I thought the Alphabet Google thing was a long term hold. Is there a message here?
Stephen E Arnold, December 6, 2015
Money Laundering: Digital Currency or Old Fashioned Methods?
November 27, 2015
Online is zeros and ones. I worked for a number of years for a fellow with lots of money who explained, “Money is information.” He was mostly correct. However, in the world of big time money laundering, online does not yet have the NFL lineman muscles to do the entire job of keeping financial transactions secret.
The challenge with digital currencies boils down to a search and retrieval problem. Actionable information is embedded in transaction data. Bad actors may not be Bitcoin fans for certain types of unregulated cash transfer tasks.
Navigate to “‘White Gloves,’ ‘VIP Boxes:’ How It’s Done at China’s Underground Banks,” which does a good job of explaining how more traditional money laundering is handled. Bitcoin is okay for moving assets if one has the time, the operational security, and expertise to make the system work.
For folks with JP Morgan-style funds, something more robust and reliable may be needed. Oh, the ability to keep the activity hard to find, hidden from regulators and tax authorities, and reliable is important.
The article states:
In one case Xinhua highlighted this week, state investigators accused a longtime general manager, surnamed Dai, in a state-owned engineering company, Beijing-based China Harbour Engineering, of helping to move $3 million of corruption-tainted gains via a Chinese underground bank onshore. The underground bank used a technique that regulators called an “audit hedge,” essentially depositing 18 million yuan in Mr. Dai’s onshore account in exchange for an equivalent amount of foreign exchange placed in the underground bank’s offshore account. No money crosses the border physically or electronically, making the transaction almost perfectly undetectable — hence “a hedge against audits.”
Another method is an old fave: Shell accounts. The article stated:
In Ningxia, a small northwestern region home to China’s Hui ethnic minority, criminal gangs in the provincial capital Yinchuan set up 12 trading shells that did nothing but generate false export data as a means to move money in or out of the country under the guise of legitimate corporate payments, according to Xinhua. Companies are allowed to move foreign exchange exceeding China’s $50,000 annual limit for legitimate purposes. Police found that the gangs marked the funds that moved through their shell accounts as “national export incentive awards” obtained from the Yinchuan City Bureau of Finance. Investigators alleged that the gangs used the scheme to defraud the Ningxia government since 2013 of export incentives worth 38.6 million yuan ($6 million). Export scams like these usually facilitate illegally moving funds onshore, rather than offshore. China controls foreign exchange coming onshore just as it does money trying to move offshore. The Ningxia case stemmed from 2013, when China was experiencing a high level of net capital inflows.
When will digital currencies facilitate money laundering on this supersized scale? Not surprisingly, verifiable data about the volume of money laundering via digital currencies is tough to obtain.
I would point out that old fashioned methods still have their use. Investigators, therefore, have to rely on useful software like Maltego and add ins and have the resources to dig out information the old fashioned way. This is not just feet on the street; it is humans pulling information threads.
Stephen E Arnold, November 27, 2015
Alphabet Google: The Quest to Diversify Its Revenue
November 26, 2015
Google has been around 15 years, more if you count Backrub. In that time, Google has managed to generate about 95 percent of its revenue from online advertising. I am not to fond of projections, but if one plots the percentage of revenue Google receives from ads and from other sources, the “other sources” are consistently modest. In short, Google has been and remains a one trick revenue pony. I recall that Steve Ballmer, now an owner of an NBA team and veteran of the wonderful Microsoft management training program. Usually I am skeptical of MBAs who jump from high tech to professional sports, but in this case, Mr. Ballmer seems to be correct.
Nevertheless, I read in “Google Aims to Be ‘Cloud Company’ by 2020, Predicts More Revenue from Cloud Platform Than Ads”:
Urs Hölze, Google’s senior vice president of technical infrastructure, predicts that within the next five years, Google’s Cloud Platform revenues could surpass its advertising revenue. “The goal is for us to talk about Google as a cloud company by 2020,” Holze said.
Let’s see. It is Monday. What companies this week have informed me directly or indirectly that each will generate lots of revenue from the cloud? Answer: Amazon, IBM, and a handful of other outfits. Oh, right Microsoft.
When it comes to revenue diversification, the proof is in the numbers. When I examine a company’s financials, I take a look at what the company has done over the previous years. For example, when a search vendor like Endeca gets stuck in the $150 million range for several years, I think it is unlikely that Endeca will jump to be a $1.0 billion dollar outfit. Google has a history of being unable to diversify its revenue. Maybe one can interpret a subscription to YouTube as a new revenue stream. I am willing to go along with that, but quite a few outfits want to do the cloud thing.
Google wants to do science projects, solve death, launch Loon balloons, and make Glass into a fashionable product. Talk is easy. Revenue from non ad sources may be a little more difficult.
Stephen E Arnold, November 26, 2015
Life Is Perceived As Faster Says Science
November 20, 2015
I read a spider friendly, link baitable article in a UK newspaper. You love these folks because each page view downloads lots and lots of code, ads, trackers, etc.
The story was “Can’t Believe It’s Almost Christmas? Technology Is Speeding Up Our Perception of Time, Researchers Say.” Heck of a title in my opinion.
The main point is captured in this quote from Wizard McLoughlin:
long monologue from a ‘real’ book.
‘It’s almost as though we’re trying to emulate the technology and be speedier and more efficient. It seems like there’s something about technology itself that primes us to increase that pacemaker inside of us that measures the passing of time.”
The “it” I assume means the way the modern world works.
I think the idea is valid. A good example is the behavior of search and content processing companies. Although many companies evidence the behaviors I want to identity, these quirks are most evident among the search and content processing outfits which have ingested tens of millions in venture funding.
The time pressure comes from the thought process like this statement which I recall from my reading of Samuel Johnson:
Nothing focuses the mind like a hanging.
The search and processing vendors under the most pressure appear to be taking the following actions. These comments apply to Attivio, BA Insight ,Coveo, and Lucidworks-type companies. The craziness of IBM Watson and HP Autonomy in the cloud may have other protein triggers.
Here we go:
- Big data. How can outfits which struggle to update indexes and process new and changed content handle Big Data? It is just trendy to call a company like Vivisimo a Big Data firm than try to explain that key word search has “real” value.
- Customer support. I don’t know about you, but I avoid customer support. Customer support means stupid telephone selections, dorky music, reminders that the call is being monitored for “quality purposes”, and other cost cutting, don’t-bother-us approaches. Where search and content processing fits in has little to do with customer service and everything about cost reduction.
- Analytics. Yep, indexing systems can output a list of the number of times a word appears in a document, a batch, or a time period. These items can be counted and converted to a graph. But I do not think that enterprise search systems are analytics systems. Again. If it helps close a deal, go with it.
- Business intelligence. I like this one. The idea that a person can look for the name of a person, place, or thing provides intelligence is laughable. I also get a kick out selective dissemination functions or standing queries presented as a magical window on real time data. Baloney. Intelligence is not a variation of search and content processing. Search and content processing are utility functions within a larger more comprehensive systems. Check out NetReveal and let me know how close an enterprise search vendor comes to this BAE Systems’ service.
When will enterprise search and content processing vendors alter their marketing?
Not until their stakeholders are able to sell these outfits and move on to less crazy investments.
The craziness will persist because the time available to hit their numbers is dwindling. Fiddling with mobile devices and getting distracted by shiny bits just makes the silliness more likely.
Have you purchased a gift using Watson’s app? Have you added a Watson recipe to your holiday menu? Have you used a metasearch system like Vivisimo to solve your Big Data problems? Have you embraced Solr as a way to make Hadoop data repositories cornucopias of wisdom?
Right. The stuff may not work as one hopes. Time is running out. Quickly in real time and in imagined time.
Stephen E Arnold, November 20, 2015
Lucidworks: Another $21 Million in Funding
November 19, 2015
Lucidworks (a eight year old “start up” founded in 2007) has raised an additional $21 million in funding. According to Crunchbase, the total funds injected into the open source centric company is now $53 million.
The news release “Lucidworks Announces $21 Million in Series D Funding” states:
Lucidworks, the chosen search solution for leading brands and organizations around the world, today announced $21 million in new financing. Allegis Capital led the round with participation from existing investors Shasta Ventures and Granite Ventures. Lucidworks will use the funds to accelerate its product-focused mission enabling companies to translate massive amounts of data into actionable business intelligence.
The statement included this observation attributed to Spencer Tail, Allegis Capital:
Lucidworks has proven itself, not only by providing the software and solutions that businesses need to benefit from Lucene/Solr search, but also by expanding its vision with new products like Fusion that give companies the ability to fully harness search technology suiting their particular customers. We fully support Lucidworks, not only for what it has achieved to date — disruptive search solutions that offer real, immediate benefits to businesses — but for the promising future of its product technology.
Lucidworks, formerly Lucid Imagination, competes with Elastic. Companies from IBM to OpenSearchServer offer solutions which compete in the same market sector. Elastic’s funding is in the $104 million range.
The horses are away from the starting gate. And the winner will be a steed with the best jockey? Stay tuned because the track is muddy.
Stephen E Arnold, November 19, 2015
All You Can View Patents
November 18, 2015
Patent information is available to peruse via the USPTO Web site and Google has an accurate patent search (that is significantly easier to use than USPTO’s search), but this does not tell the complete story of US patents. GCN announced that the USPTO plans to remedy missing patent information in the article, “USPTO Opens The Door To Four Decades Of Patent Data.”
With the help of the Center of Science and Innovation Policy (CSSIP), the USPTO launched the new tool PatentsView:
“The new tool allows individuals to explore data on patenting activity in the United States dating back to 1976. Users can search patent titles, types, inventors, assignees, patent classes, locations and dates. The data also displays visualizations on trends and patent activity. In addition, searches include graphic illustrations and charts.”
People will be able to conduct the equivalent of an “advanced search” option of Google or an academic database. PatentsView allows people to identify trends, what technology is one the rise or dropping, search a company’s specific patents, and flexible application programming interface to search patent information.
The USPTO wants people to access and use important patent and trademark data. It faces the issue that many organizations are dealing with that they have the data available and even with the bonus of it being digital, but its user interface is not user-friendly and no one knows it is there. Borrowing a page from marketing, the USPTO is using PatentsView to rebrand itself and advertise its offerings. Shiny graphics are one way to reach people.
Whitney Grace, November 18, 2015
Sponsored by ArnoldIT.com, publisher of the CyberOSINT monograph
More Big Data Value Floundering
November 15, 2015
Here in Harrod’s Creek, Kentucky, the mist is rising from the mine drainage ditch. Value is calculated in a couple of easy ways. Here are two concrete examples:
One of my neighbors buys my collection of used auto parts. Before he puts the parts in his truck, a 1950 Chevrolet, he pays me cash money. Once I count the money, I help him load the parts and watch him drive away in a haze of Volkswagen type emissions.
Here’s another:
A person calls me and wants to talk with me about enterprise search and content processing. I explain that I don’t “talk” for free. If the caller transfers cash money to my PayPal account, then I call the person and answer questions. The time buys minutes. When the minutes are consumed, I hang up.
The notion of value, therefore, is focused on cash, not feeling good, having a nice day, or winning an election as the friendliest retired consultant in Harrod’s Creek.
Now navigate to “What Is the Value of Big Data to Your Business?” There is a gap between my definition of value and the definition of value set forth in this write up.
Here’s an example of Big Data value:
Big data and how it shapes your company
Big data is at the center of many decisions in any company. It will allow your company to:
Reduce and manage risk
Without data, organizations are vulnerable to many risks. Big data allows financial institutions to profile their customers when giving them credit facilities. Insurance companies can also create risk profiles which will allow them to set appropriate premiums for different customers. Agricultural enterprises as well, can use data on weather and food pricing to control production.
Better decision making
Collecting data on employees’ interests, behavior, interactions, work time, resource use and resource allocation can be very instrumental in creating better structures, improving the flow of information, increasing inter-departmental cooperation, increasing efficiency, saving time and saving resources.
Get a competitive edge
Monitoring competitor products, marketing activities, sales and pricing will help you to respond urgently with your own counter measures. If you are selling your products on a platform like Amazon, you can keep an eye on your biggest competitors and respond accordingly when they seem to be outselling you.
News flash. None of these listicle items deliver value from my point of view. Like other buzzwords and whizzy concepts, backfilling with generalizations is not going to convince me that Big Data has “value” unless the situation is linked to cash money.
Call me old fashioned, but this approach to value is one reason many companies are struggling to generate revenue from their search and content processing efforts.
Stephen E Arnold, November 15, 2015
Lexmark: Analysis Suggests More Challenges Ahead
November 15, 2015
I read a wonky financial review of Lexmark. You know Lexmark. It was a unit of IBM which manufactured or assembled printers and sold ink. Ink is almost expensive as movie popcorn.
The write up is “Sunday Update for Lexmark international Incorporated.” If you are fortunate to have an unfiltered Internet connection, you may be able to view the write up. If not, buzz your financial advisor. These folks work on Sundays.
The main point of the write up is that the data in this chart provide a glimpse of the challenges Lexmark, owner of the ISYS Search Software, face. ISYS was crafted in the late 1980s, and it provides the basics of information access. The problem is that open source options and baked in search solutions make search and retrieval a utility, not a key feature.
Here’s the chart, which suggests that the August 2015 dip may be the new normal for the company.
Does this remind you of a profile of Table Mountain? I see some parallels. Sharp drop, big job to get back on top.
More interesting is that the summary of analysts expectations is that only two analysts have an opinion. One rates Lexmark as a hold. The other? Strong sell.
The write up points out that Lexmark is in the buzzword business; for example:
The Company operates in the office printing and imaging, enterprise content management (ECM), business process management (BPM), document output management (DOM), intelligent data capture and search software markets. Lexmark’s products include laser printers and multifunction devices, dot matrix printers and the associated supplies/solutions/services, as well as ECM, BPM, DOM, intelligent data capture, search and Web-based document imaging and workflow software solutions and services.
Maybe acronyms are not selling? I hope they do. Lexmark is based about one hour from the hollow in which I reside in rural Kentucky. A healthy Lexmark keeps the trailers in my trailer park rented. Perceptive, right?
Stephen E Arnold, November 15, 2015
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