Facebook valued higher than IBM?

Yesterday Facebook with its stock soaring to new heights, exceeded IBM in terms of market value. This morning, it’s slightly less (IBM at $194B vs Facebook at $193B). However Facebook is higher than Oracle’s value and is the third largest company in the valley after Apple and Google. For enterprise software folks like me, this is very hard to explain. Value of what? – the photographs, likes and connected friends?

Market value is the total number stocks multiplied by the stock price. Sometimes, it can be a huge multiple of the current revenue – as is the case for Facebook. It’s projected annual revenue for this year at $12B is minuscule compared to IBM’s $100B in 2013. Facebook is 10 years old with 7000 employees compared to IBM’s age at 103 with more than 400,000 employees. The market value indicates the “projected” growth of a company and a higher demand of its stock increases the value. Sustainability is another issue.

Facebook reported stellar performance earlier this week, exceeding the analyst’s projection. It’s mobile advertising revenue was impressive, compared to zero two years ago. This pushed the stock to almost $76, twice the price of its IPO at $38 and four times the low of $18 at one time. Mark Zuckerberg is worth almost $33B at the ripe age of 31, adding a whopping $1.6B yesterday to his net worth.

I guess social networking is a huge force. With 1.2 billion users, Facebook owns a great treasure called the “social graph” of a huge population. Advertisers would bet all their money to reach such an audience. This year, the net spend on mobile advertising would exceed that of TV and print media spending. Every time, you use Facebook, it keeps track of you and your connections, plus photographs, links, timeline, etc. There are privacy issues being debated.

Facebook is growing very fast in countries like India and Brazil. No wonder Sheryl Sandberg visited India last month and met the new prime minister Mr. Modi to discuss how Facebook can be used for better governance in the largest democracy of the world. Incidentally, IBM’s largest number of employees now are in India, bigger than the US. 

It is still hard to digest the fact that Facebook is almost equal to IBM’s value!

The new IBM-Apple partnership

We live in interesting times for sure. Who would have thought ten years ago that IBM and Apple would become partners? Here is the announcement as reported in eWeek

Apple and IBM surprised many on July 15, announcing a global partnership that will see the companies attempt to “transform enterprise mobility.” The announcement, punctuated with comments from Apple CEO Tim Cook and IBM CEO Ginni Rometty, served notice of the companies’ intentions to make Apple smartphones, tablets and mobile services pre-eminent in the enterprise, replacing the BlackBerry devices and security services that long held the dominant position in that market. The partnership only confirms what Apple has been doing for years with its smartphones, tablets and even its notebook and desktop PCs, moving deeper into enterprises. The company has been touting its success in the corporate world, saying that many of the top companies in the world are now using its iPhones and iPads. In the IBM announcement, Apple’s Cook said that the company’s iPhones and iPads are now running in more than 98 percent of the Fortune 500 and 92 percent of the Global 500. Both Apple and IBM expect those figures to grow with this new partnership.

What is in it for Apple? Apple has been trying for years to shed the idea that its products only appeal to consumers. The company has brought proprietary app development and remote device management to iOS devices and continues to offer stats on enterprise integration. With the IBM deal, however, Apple is making something abundantly clear: It cares deeply about the corporate world and it wants to do all it can to be a success in that market. 

What is in it for IBM? For IBM, the Apple partnership is a software play. IBM said in its own press release that it plans to make applications that are designed for enterprise customers, but come with a wide array of features that simply aren’t available right now in the mobile market. That could provide IBM (and Apple) with a leg up in the enterprise. While IBM could have extended the partnership to OS X and perhaps made Apple a bit happier as it tries getting that platform into the enterprise, Big Blue said in its statement that the agreement applies only to iOS. That means that iPhones and iPads will play a central role in this agreement, and Macs and iPods running iOS will be left out. 

Developing mobile Apps together? Although IBM plans to chart the course for software in this partnership, the companies are actually going to come together on development. IBM said that both Apple and its own developers will collaborate to leverage iOS as much as possible and get every last bit out of the technology built into iPhones and iPads. That’s a core component in this: IBM has lofty goals, and it can only be successful if it can fully harness the power of iOS and Apple hardware. 

Leveraging Big Data: Big data and analytics will be a core focus of this effort, IBM said. The apps—over 100, in total—will look at how to get companies to insert their massive amounts of data into iOS devices, analyze it and make actionable decisions. Mobile devices have traditionally been viewed as too underpowered to handle big data. IBM sees it differently.

Playing in the IBM Cloud: Although IBM is building apps for on-premise use, the company said that it will also offer all of the solutions it’s developing on its Bluemix development platform. Customers will need to head over to the IBM Cloud Marketplace and then download the apps they desire. IBM said it will also try to find other ways to leverage the cloud. 

IBM, a reseller of iPhone & iPad? IBM is essentially becoming another outlet for Apple to sell its iPhones and iPads. The companies have agreed to have IBM sell iPhones and iPads to enterprise customers that come with desired applications already on them. That should make it easier for corporate customers to join the mobile fray and for Apple to improve its already-strong enterprise integration. 

There you go folks! This new partnership appears like a big winner for Apple as it expands its already-dominant market for iPhone/iPad into the enterprise. IBM is betting on the mobile apps on iOS to make its cloud and big data initiatives more appealing.

Gone are the days in 1984 when Apple ran that advertisement during the introduction of the Mac, portraying IBM as the big bad evil force. With IBM’s PC business sold to Lenovo few years back, IBM is into software and services business (includes cloud infrastructure service).

Yes, these are interesting times!

Re-Imagination – new disruptive technologies

I like this word re-imagination from Mary Meeker’s Internet Trends presentation. We are seeing so many aspects of our life being transformed by the internet.

Take for example, ordering a cab to go somewhere. Either we phone for a yellow cab here in California or if you are in New York city, then you stand and wave for an incoming yellow cab to stop. The new game-changer is Uber. All you do is touch your smartphone screen for UberX or Black car and you get an instant message about the car coming in less than 5 minutes time with the driver and car info. It is cheaper and you pay by card (pre-registered in your Uber account). This is re-imagining the transport sector. Uber, a San Francisco company is worth about $17B and is operating in 70 cities around the world. Quite a disruptive force!

The following list shows several new alternatives using the internet technology that impacts varieties of activities:
– Grocery shopping – Amazon Fresh or Instacart
– Yellow Pages – Yelp
– Booking hotel – Airbnb
– Driving in traffic – Waze
– Satellite radio – Spotify
– TV Remote control – Amazon Fire TV
– Meeting new people – Tinder
– New money – Bitcoin
– Smart TV adopters – Apple TV, Google Chromecast, Amazon Fire TV, Roku
– Mojo Update (uploadable, sharable, findable) – Pinterest for common interests, Eventbrite for tickets, Fitbit/MyFitness Pal – measuring steps/distance/calories,
WhatsApp (instant messages, photos, videos),….

This list goes on and we find a new single-purpose application appearing almost every day. Gone are the days of multi-purpose web applications! In the area of data mining and analytics, we find new companies like Dropcam for home monitoring (just acquired by the Nest division of Google), Jawbone health wearable device, Netflix for media personalization and discovery, AppDynamics for application performance monitoring, SnapLogic for cloud integration, and Ayasdi for automated insight discovery.

No wonder that our kids are growing up with such different habits than the old times – no physical newspaper reading, no TV watching at specific show times (Youtube is good enough), or no sending emails in the old fashioned way (all short messages and Twitter and Facebook for broadcast). Even physical book reading is declining, with eBook readers all around.

Last month my two sons gave me two gifts on Fathers day – Apple TV and Google Chromecast. Now I see the benefit of not using cable. I also love using Uber during my trips. My Fitbit keeps me alert on meeting my daily walking goals.

This follows the dictum – Old order changeth yielding place to new.

MongoDB World in NY City this week

I attended the MongoDB World in NY city earlier this week on June 24th. and 25th. There were 2000 attendees for this first-time event. I met many people who flew in from all over the world. It was quite a phenomenon for a six-year old company. The momentum of MongoDB  is truly amazing.

For those who do not know MongoDB, it’s a new generation open source NoSQL database for building highly interactive modern applications. Enterprises have built “systems of record” over last 3 decades using traditional RDBMS such as DB2, Oracle, MySQL and SQL Server. These systems are like the interstate highways built during the 1930s across the USA. They serve the business in handling basic functions, but are inadequate in meeting several new needs. Hence the need for building “systems of engagement” has arrived. These systems connect customers, employees, and partners into the business using mobile devices and providing visibility of critical business information. MongoDB provides two crucial functions – an easy to use development platform with very high coding velocity; and a horizontally scalable operations spanning 100s and 1000s of commodity servers at much lower cost compared to the traditional systems. Many new features for easy management of such distributed systems were announced.

While Hadoop brings a highly economic distributed  platform to handle batch-oriented offline analytics, MongoDB addresses the online transactional workloads. They compliment each other, much like today’s operational systems do with the data warehousing solutions. Hadoop is a step up in the EDW and analytics world, while MongoDB is a step up in the mission critical business transaction world. At the conference, many customers across all verticals presented success stories on how they have used MongoDB to address the data variety problem and built systems at record speed. It only takes weeks to a couple of months from inception to finish, not possible using the standard RDBMS-based technologies. Special features like handling spatial data with indexing and text search, were highlighted by some customers.

Cloudera founder and CSO Mike Olson gave a keynote on the co-existence of Hadoop and MongoDB, so did Amazon’s CTO Werner Vogels on using MongoDB via AWS. Other keynotes were given by Max Schireson, CEO of MongoDB and Eliot Horowitz, CTO of MongoDB. A number of CIOs and CTOs of large enterprises were present also. The excitement and developer endorsement was visible all around. It clearly showed that amongst the new database solutions, MongoDB is the unquestioned leader. Beside Amazon AWS, MongoDB is also available in other cloud solutions such as Google Cloud Platform and Microsoft Azure.There were many partners showing their support of MongoDB at the exhibition booths – Teradata, Cloudera, AppDynamics, Pure Storage, SAP, etc.

For a first-time event, MongoDB World was quite remarkable!

The High Tech Indian Election – lessons on Big Data, Social Media and 3D Holography

The recent national election in India that spanned over 5 weeks and concluded on May 12th. was unique in terms of  sheer numbers. The total size of the electorate was 815m (more than the population of USA and European Union combined), of which 550m actually voted. Half the electorate was below the age of 25 (voting age is 18). The sheer size and complexity was mind-boggling – it was the greatest democratic process on display!

The final results came out on May 16th., where the former opposition party BJP (Bharatiya Janata Party, or the Indian People’s party) had a land-slide victory, not seen in last 30 years. The leader of BJP is Mr. Narendra Modi, the chief minister (like a state Governor) of the state of Gujarat for last 13 years. He comes from a poor family and climbed up the ranks by sheer hard work and total focus on high growth development of his state. India puts a lot of hope on Mr. Modi to bring speedy growth back to the economy.

Here I will point out how he used technology during the election.

Mr. Modi found a smart technologist from London specializing in 3D Holography. He experimented with that during the state elections in 2012 where his 3D holographic image was beamed to many locations simultaneously. The system was debugged and was ready for effective use this time – broadcasting his image in full 3D to 100s of locations thus reaching millions of people and conveying his message very effectively. Physically he spoke at over 400 rallies, and each one was attended by at least one million people or more. But combined with the virtual presence via holography, his outreach was the maximum compared to any other candidate. Such an experiment of using 3D Holography has never been used before in any election around the world.

The second approach was putting together a crack team of smart Data Scientists  who took a page from president Barack Obama’s election process. Data about the electorate was gathered and dissected like never before. Based on behavior and past preferences, they were segmented and targeted very carefully. This was a bottoms-up approach. Thousands of volunteers followed up the Big data analysis and reached out to the voters in a door-to-door fashion, thus influencing their choices. Without such analysis and pin-point targeting, this would have been impossible within such a short time-frame of 4 months. All this effort was focussed primarily on 2 major states (UP and Bihar) where BJP’s electoral victory was going to be the game-changer (as they had poor record in the past). The results came out as proof of the effectiveness of this approach – BJP got 71 out of 80 in UP, and 31 out of 40 in Bihar (totally beyond any projections and expectations).

The third focus was on fully exploiting the social media such as Twitter, Facebook, and Blogs. The urban population with access to the Internet were constantly reached out via these new communication tools. Mr. Modi has one of the largest followings in Twitter.

It was the clever use of technology by Mr. Modi’s team that clinched their unprecedented victory. The other contesting parties including the current ruling Congres party for last 10 years were nowhere in using technology and hence they lost badly.

Some lesson for all future elections!

Internet of Things – IoT

Cisco would like to use the phrase IoE – Internet of Everything. But the common term is IoT (Internet of Things) these days. It refers to any device that has an IP address, and can communicate. I will be speaking at an IoT Expo in San Francisco on May 5th. and my session is called – Big Data, the oxygen of the Internet of Things. The term IoT is nebulous and involves all kinds of players – device suppliers (wearables, sensors, home appliances, monitors, etc.), backend players with network gears such as routers, hubs, load balancers, and then computing resources, storage, plus a large number of software players. From consumers to enterprises, the impact of IoT will be pervasive. Some new companies such as Kaazing claims to enable the Internet for the IoT. What does that mean? They offer a product called  The Kaazing WebSocket Gateway, an enterprise solution for full-duplex, high-performance communication over the Web built with the HTML5 WebSocket standard at its foundation. I can guarantee that hundreds of companies including incumbents like Cisco will have similar claims.

Let us examine some vertical industries and see how IoT will have an impact. Take transportation, for example. Today, Southwest, Jet Blue, and Delta provide onboard wifi connectivity. The newer aircrafts like Boeing 787 or Airbus 380 are like flying data centers. Onboard connectivity via wifi or cellular is offered already. New applications such as real-time credit card verification for duty-free shopping can minimize exposure to fraud. Such applications can also reduce inventory onboard for duty free goods depending on historical records. The main goal will be to improve business operations. On the other side, operation and safety of the aircraft will use sensors providing real-time data and alerts for any abnormal events. GE-built aircraft engines have over 1000 sensors.

Healthcare industry will see increased use of monitoring of patients. Even devices will track if individuals are taking timely medicine or not. Qualcomm’s MU-MIMO (multi-user, multiple-input, multiple-output) Wi-Fi radio approach is getting popular in healthcare. Similarly verticals like retail, manufacturing, and financial services will see big benefits of greater device connectivity. Retail industry can locate geo-location of customers and offer discounts as they walk into the store, based on past purchases. Manufacturing will see more just-in-time maintenance to reduce cost. The possibilities are numerous.

Data management and analysis becomes the real oxygen here. Hence big data technologies and solutions will be crucial. Among the challenges are mentioned – coding, UI/UX (user interface and user experience), hardware, operations and staffing. How do you integrate all the pieces, as there are no standards yet? How do you get reliable guaranteed communications and optimize traffic flow? The devices will be radically different (Nest thermostats, door security, wearable devices from Fitbit, etc.) and what is required is a level of abstraction that can be coded to.

There are other challenges also in terms of staffing and organization. Start small and figure out the touch points and what to solve. What options exist? Then identify toolsets, process, staffing and training. Security and protection against malware hackers become important.

We are at the beginning of this key movement and like any other technology cycle, solutions will emerge. But today there are more questions than answers.

 

The 3rd. Platform, Big Data, and the Internet of Things

What is the “3rd Platform” of IT? It comprises of the cloud, mobile, social, and big data products. According to IDC, “3rd Platform technologies and solutions will drive 29 percent of 2014 IT spending and 89 percent of all IT spending growth”. Much of that growth will come from the “cannibalization” of traditional IT markets. Here are some interesting quotes and statements I read recently.

  • Adding terabytes to a Hadoop cluster is much less costly than adding terabytes to an enterprise data warehouse (EDW).
  • IDG Enterprise’s 2014 Big Data survey: more than half of the IT leaders polled believe they will have to re-architect the data center network to some extent to accommodate big data services.
  • “Big data has the same sort of disruptive potential as the client-server revolution of 30 years ago, which changed the whole way that IT infrastructure evolved. For some people the disruption will be exciting and for others, it will be threatening.” – Marshall Presser, CTO at Pivotal
  • The traditional IT infrastructure was designed to help the CFO close the company’s books faster than the manual accounting systems that preceded IT. A surprising number of those original systems are still kicking around, adding to the pile of “legacy spaghetti” that CIOs love to complain about.
  • We are seeing a bumpy transition from the old kind of IT that faced mostly inward, to a new kind of IT that mostly faces outward.
  • After years of resistance, IT is following the nearly universal business trend of replacing “product-centricity” with “customer-centricity”.
  • One key challenge is rapidly scaling systems to meet unexpected levels of demand. “I call it the ‘curse of success’ because if the market suddenly loves your product, you have to scale up very quickly. Those kinds of scaling problems are difficult to solve, and there isn’t a universal toolkit for achieving scalability on the Internet of Things. When Henry Ford needed to scale up production, he could add another assembly line.” (Jordan Husney, Strategy Director, Undercurrent)
  • “HDFS is a complete replacement for not just one, but four different layers of the traditional IT stack. The HDFS ecosystem does storage, processing, analytics, and BI/visualization, all without moving the data back and forth from one system to another. It is a complete cannibalization of the existing stack.” (Abhisek Mehta, Founder, CEO of Tresata). My view is that this only applies to the analytics side, not the transaction-processing aspect of business.
  • API-ification of the Enterprise – “Not only we have to change the infrastructure, we have to fundamentally change the way we build applications. Hundreds of millions of new applications will be built. Some of them will be very small, and very transient. Traditional IT organizations – along with their tooling, approaches, and processes – will have to change. For IT, it’s going to be a different world. We’re seeing the ‘API-ification’ of the enterprise.” (Rick Bullota, Cofounder and CTO, ThingWorx

All these observations are interesting, but must be taken with the proper scope in mind. There is a tendency to sensationalize and generalize too quickly. The 3rd Platform is real and Big data is certainly changing the IT landscape. The only question is on the velocity of change!