Secret of Sundar Pichai’s success

I watched Sundar Pichai’s recent interaction with the students at I.I.T. (Indian Institute of Technology) Kharagpur, India, where he graduated back in 1993. Besides our common country of birth, I had never heard of Sundar until his rapid rise at Google a few years back. I have never met him or listened to him at conferences. So this was the first time, I had a chance to listen to his remarks and his answers to many questions from the audience of 3500 students at his alma mater earlier this week.

Growing up not far from I.I.T. Kharagpur, I was very aware of this institution. It was the first I.I.T. in India established during the 1950s. Other I.I.T’s like at Kanpur, Delhi, Mumbai and Chennai came later. These were the original 5 Indian Institute of Technologies. Lately many new ones have been added.

Sundar did his undergraduate studies in Metallurgy (study about metals). Then how did he switch from that into software? That was one of the questions from a student. He said that he loved Fortran language during his student days and that love for programming continued. The message he was giving was for everyone to pursue their own interest & passion. He mentioned that unlike in India, students at US universities sometimes do not decide their majors, way into their 3rd or 4th year of studies. Sundar’s passion was to build products that would impact a very large number of global users. During his interview at Google, he was asked what he thought of Gmail, which he had never seen nor used. Then the fourth interviewer actually showed it to him. Subsequently, he gave his opinion to the remaining 3 interviewers on what he thought was wrong with Gmail and how to improve it. He emphasized time and again the need to step out of the comfort zone and get an all rounded experience. Today’s students need not be afraid to take some risks and be willing to fail.

Besides technical leadership, Sundar possesses an amazing quality; egoless-ness, so rare to find in Silicon Valley executive community. He said that he truly believes in empowering his team and letting them execute with full trust. This is easier said that done, based on my experience at IBM and Oracle. Large organizations suffer from ego-driven leadership causing great amount of friction and anguish. Sunder’s rise at Google was due to his amazing ability to get teams to work very effectively. From Search, he went to manage Chrome, then he was given Android. His ability to work thru the complexities of products, fiefdoms, and internal rivalries was so evident that he was elevated to the CEO position so quickly. Humility is his hallmark combined with clarity of vision and efficient execution.

He made an interesting comment about the vision at Google. Larry Page said that the moonshot projects are worthwhile because the bar is so high (no competition). Even if you fail, you are still ahead with your knowledge and experience.

It was fun listening to Sundar’s simple and honest answers & remarks.

The new Microsoft

Clearly Satya Nadella has made a huge difference at Microsoft since taking office in 2014. The stock in 2016 hit an all time high since 1999. So investors are happy. Here are the key changes he has made since taking the role as CEO:

  • Skipped Windows 9 and went straight from Windows 8 to Windows 10, a great release. However revenues from Window is declining with the reduction of PC sales.
  • Released Microsoft Office for iPad. Also releasing the Outlook product on iPhone & Android.
  • Embraced Linux by joining the Linux Foundation, previously anathema to Microsoft’s window-centric culture.
  • Spent $2.5B to buy Mojang, the studio behind hit game Minecraft.
  • Introduced Microsoft’s first laptop, The Surface Book.
  • Revealed Microsoft HoloLens, the super-futuristic holographic goggles.
  • Created the new partner program to provide Microsoft products on non-Windows platforms. Hired ex-Qualcomm exec Peggy Johnson to head the bus-dev group.
  • Enhanced company morale and employee excitement.
  • The biggest gamble was the purchase of Linked-In last June for a whopping $26.2B.

It’s important to understand the significance of the Linked-In purchase. Adam Rifkin (I worked with him twelve years back at KnowNow, a smart guy) recently wrote an article on this topic. I like his comment that in a world of machine learning, uniquely valuable data is the new network effect. The right kind of data is now the force multiplier that can catapult organizations past any competitors who lack equivalent data. So data is the new barrier to entry. Adam also makes a statement that the most valuable data is perishable and not static. Software is eating the world and AI is eating software meaning AI is eating data and popping out software.

Now let’s map what this means to the Linked-In purchase by Microsoft which sees the network effects of Linked-In’s data. What Google gets from search, Facebook gets from likes, and Amazon gets from shopping carts, Microsoft will get such insights from Linked-In’s data for its CRM services. Adam makes a point that the global CRM market in 2015 was worth $26.3B – almost exactly what Microsoft paid. It is the fastest growing area of enterprise software. Hence Marc Benioff of SalesForce was not very happy with this acquisition.

The new Microsoft is ready to fight the enterprise software battle with incumbents like SalesForce, Oracle, SAP and Workday.

The resurgence of AI/ML/DL

We have been seeing a sudden rise in the deployment of Artificial Intelligence (AI), Machine Learning (ML), and Deep Learning (DL). It looks like the long “AI winter” is finally over.

  • According to IDC, AI-related hardware, software and services business will jump from $8B this year to $47B by 2020.
  • I have also read comments like, “AI is like the Internet in the mid 1990s and it will be pervasive this time”.
  • According to Andrew Ng, chief scientist at Baidu, “AI is the new electricity. Just as 100 years ago electricity transformed industry after industry, AI will now do the same.”
  • Peter Lee, co-head at Microsoft Research said,  “Sales teams are using neural nets to recommend which prospects to contact next or what kind of products to recommend.”
  • IBM Watson used AI in 2011, not DL. Now all 30 components are augmented by DL (investment from $500M – $6B in 2020).
  • Google had 2 DL projects in 2012, now it is more than 1000 (Search, Android, Gmail, Translation, Maps, YouTube, Self-driving cars,..).

It is interesting to note that AI was mentioned by Alan Turing in a paper he wrote back in 1950 to suggest that there is possibility to build machines with true intelligence. Then in 1956, John McCarthy organized a conference at Dartmouth and coined the phrase Artificial Intelligence. Much of the next three decades did not see much activity and hence the phrase “AI Winter” was coined. Around 1997, IBM’s Deep Blue won the chess match against Kasparov. During the last few years, we saw deployments such as Apple’s Siri, Microsoft’s Cortana, and IBM’s Watson (beating Jeopardy game show champions in 2011). In 2014, DeepMind team used a deep learning algorithm to create a program to win Atari games.

During last 2 years, use of this technology has accelerated greatly. The key players pushing AI/ML/DL are – Nvidia, Baidu, Google, IBM, Apple, Microsoft, Facebook, Twitter, Amazon, Yahoo, etc. Many new players have appeared – DeepMind, Numenta, Nervana, MetaMind, AlchemyAPI, Sentient, OpenAI, SkyMind, Cortica, etc. These companies are all targets of acquisition by the big ones. Sunder Pichai of Google says, “Machine learning is a core transformative way in which we are rethinking everything we are doing”. Google’s products deploying these technologies are – Visual Translation, RankBrain, Speech Recognition, Voicemail Transcription, Photo Search, Spam Filter, etc.

AI is the broadest term, applying to any technique that enables computers to mimic human intelligence, using logic, if-then rules, decision trees, and machine learning. The subset of AI that includes abstruse statistical techniques that enable machines to improve at tasks with experience is machine learning. A subset of machine learning called deep learning is composed of algorithms that permit software to train itself to perform tasks, like speech and image recognition, by exposing multi-layered neural networks to vast amounts of data.

I think the resurgence is a result of the confluence of several factors, like advanced chip technology such as Nvidia Pascal GPU architecture or IBM TrueNorth (brain-inspired computer chip), software architectures like microservice containers, ML libraries, and data analytics tool kits. Well known academia are heavily being recruited by companies – Geoffrey Hinton of University of Toronto (Google), Yann LeCun of New York University (Facebook), Andrew Ng of Stanford (Baidu), Yoshua Bengio of University of Montreal, etc.

The outlook of AI/ML/DL is very bright and we will see some real benefits in every business sector.

Data-driven enterprise

87bcf8ea-34c4-44f7-a9be-e6982c226924-originalI moderated a panel of 3 CIOs last Sunday at the Solix Empower conference on the subject of data-driven enterprise. The three CIO’s came from different industries. Marc Parmet of the TechPar group spent many years at Avery Dennison after stints at Apple and IBM. Sachin Mathur leads the IT innovations at Terex Corp., a large company supplying cranes and other heavy equipments. PK Agarwal, currently dean at Northeastern University, used to be the CIO for the Government of California. Here are some of the points covered:

  • I reminded the audience that we are at the fourth paradigm in science (as per the late Jim Gray). A thousand year ago, science was experimental, then few hundred years back science became theoretical (Newton’s law, Maxwell’s law..), fifty years ago, science became computational (simulation via a computer). Now the fourth paradigm is data-driven science where experiment, theory, and computation must be combined to one holistic discipline. Actually science hit the “big data” problem long before the commercial world.
  • Top level management is starting to understand that data is the oxygen, but they are yet to fully make their organizations data-driven. Just having a data warehouse with analytics and reporting does not make it data-driven, but they do see the value of predictive analytics and deep learning for competitive advantage.
  • While business-critical applications continue to run on-premise, newer, less critical apps such as collaboration and email (e.g. Lotus Notes) are moving to the public cloud. One said that they are evaluating migrating current Oracle ERP to a cloud version. Data security and reliability are critical needs. One panelist talked about not just private, public or hybrid cloud, but “scattered” cloud which will be highly distributed.
  • Out of the 3V’s of big data (volume, variety, and velocity), variety seems to be of higher need – images, pictures, videos combined with sensors deployed in manufacturing and factory automation. For industries such as retail and telcos, volume dominates. The velocity part will become more and more critical as streaming of these data in real-time will need fast ingestion and analysis-on-the-fly for timely decision making. This is the emerging world of IoT where devices with an IP address will be everywhere – individuals, connected homes, autonomous cars, connected factories. They will produce huge amounts of data volume. Cluster computing with Hadoop/Spark will be the most economical technology to deal with this load. Much work lies ahead.
  • There will be serious shortage of “big data” or “data science” skills, of the order of 4-5 million in next few years. Hence universities such as Northeastern is setting up new curriculum on data science. Today’s data scientist must have knowledge of the business, algorithms, comp. science, statistical modeling plus he/she must be good story teller. Unlike the past, it’s not just answering questions, but figuring out what questions to ask. Such skills will be at a premium as enterprises become more data-driven.

We discussed many other points. It was a fun panel.

 

Oracle’s push into cloud solutions

I watched Larry Ellison’s keynotes at this week’s Oracle Open world conference in San Francisco. They are definitely serious in pushing their cloud offerings, even though they came in late. But Oracle claimed that they have been working on it for almost ten years. The big push is at all 3 levels – SaaS, PaaS, and IaaS. The infrastructure as a service claims faster and cheaper resources (computing, storage, and networking) to beat Amazon’s AWS. They make a good point on better security for the enterprises, given the risk of security breaches happening at greater frequency lately. One comment I have is that AWS is beyond just IaaS, they are into PaaS as well (e.g. Docker services, etc. for devops). Oracle’s big advantage is in offering SaaS for all their application suits – ERP, HCM and CRM (they call it CX as customer experience). This is not something AWS offers for the enterprise market, although apps like SalesForce and Workday are available. Microsoft has Dynamics as an ERP on their cloud.

I do agree that Oracle has an upper hand when it comes to database as a service. Larry showed performance numbers for AWS Redshift, Aurora, and DynamoDB compared to Oracle’s database (much faster). They do have a chance to beat AWS when it comes to serious enterprise-scale implementations, given their strong hold in that market. Most of these enterprises still run much of their systems on-premise. Oracle offers them an alternative to switch to the cloud version within their firewall. They also suggest the co-existence of both on-prem and cloud solutions. The total switch-over to cloud will take ten years or more, as the confidence and comfort level grows over time.

AWS has a ten year lead here and they have grown in scale and size. The current run rate for AWS is over $10B in revenue with hefty profit (over 50%). However, many clients complain about the high cost as you use more services of AWS. Microsoft Azure and Google’s cloud services are marching fast to catch up. Most of the new-age web-companies use AWS. Oracle is better off focusing on the enterprise market, their strong hold. Not to discount IBM here, who is pushing their Soft Layer cloud solutions to the enterprise customers. Mark Hurd of Oracle showed several examples of cloud deployment at large to medium size companies as well. One interesting presence at the Open World yesterday was the chief minister (like a state Governor) of the Indian state, Maharashtra (Mumbai being the big city there). He signed a deal with Oracle to help implement cloud solutions to make many cities into “smart” cities and also connecting 29000 villages digitally. This is a big win for Oracle and will set the stage for many other government outfits to follow suit.

I think more competition to AWS is welcome, as no one wants a single-vendor lock-in. Mark Hurd said that by 2020, cloud solutions will dominate the enterprise landscape. The analysts are skeptical on Oracle’s claim over AWS, but a focused Oracle on cloud is not to be taken lightly.

Jnan Dash

Linux & Cloud Computing

While reading the latest issue of the Economist, I was reminded that August 25th. marks an important anniversary for two key events:  25 years back, on August 25, 1991, Linus Torvalds launched a new operating system called Linux and on the same day in 2006, Amazon under the leadership of Andy Jesse launched the beta version of Elastic Computing Cloud (EC2), the central piece of Amazon Web Services (AWS).

The two are very interlinked. Linux became the world’s most used piece of software of its type. Of course Linux usage soared due to backers like HP, Oracle, and IBM to combat the Windows force. Without open-source programs like Linux, cloud computing would not have happened. Currently 1500 developers contribute to each new version of Linux. AWS servers deploy Linux heavily. Being first to succeed on a large scale allowed both Linux and AWS to take advantage of the network effect, which makes popular products even more entrenched.

Here are some facts about AWS. It’s launch back in 2006 was extremely timely, just one year before the smartphones came about. Apple launched its iPhone in 2007 which ushered the app economy. AWS became the haven for start-ups making up nearly two-third of its customer base (estimated at 1 million). According to Gartner Group, the cloud computing market is at $205B in 2016, which is 6% of the world’s IT budget of $3.4 trillion. This number will grow to $240B next year. No wonder, Amazon is reaping the benefits – over past 12 months, AWS revenue reached $11B with a margin of over 50%. During the last quarter, AWS sales were 3 times more than the nearest competitor, Microsoft Azure. AWS has ten times more computing capacity than the next 14 cloud providers combined. We also saw the fate of Rackspace last week (acquired by a private equity firm). Other cloud computing providers like Microsoft Azure, Google Cloud, and IBM (acquired SoftLayer in 2013) are struggling to keep up with AWS.

The latest battleground in cloud computing is data. AWS offers Aurora and Redshift in that space. It also started a new services called Snowball, a suitcase-sized box of digital memory which can store mountains of data in the AWS cloud (interesting challenge to Box and Dropbox). IBM bought Truven Health Analytics which keeps data on 215m patients in the healthcare industry.

The Economist article said, “AWS could end up dominating the IT industry just as IBM’s System/360, a family of mainframe computers did until the 1980s.”       I hope it’s not so and we need serious competition to AWS for customer’s benefits. Who wants a single-vendor “lock-in”? Microsoft’s Azure seems to be moving fast. Let us hope IBM, Google, and Oracle move very aggressively offering equivalent or better alternatives to Amazon cloud services.

The top five most-valued companies are Tech. – almost

On this first day of August 2016, I saw that the top most-valued companies are tech. companies, and the fifth one is almost there. Here is the list.

  1. Apple ($appl): $566 billion
  2. Alphabet ($goog): $562B
  3. Microsoft ($msft): $433B
  4. Amazon ($amzn): $365B
  5. Exxon Mobile ($xom): $356B
  6. Facebook ($fb): $353B

The big move is Amazon’s beating Exxon Mobile (used to be number 1 for many years) to the fourth spot. The switch came after Amazon posted its fifth straight quarter of profits last week as the oil giant’s profits tumbled 59 percent during the same rough period. If Exxon continues its drop, then Facebook will beat it in days.

This is quite remarkable! Other than Microsoft and Apple, the other 3 companies are much younger, Facebook being the youngest one. Their rapid rise is due to the growth of the Internet with its associated areas of search, e-commerce, and social networking. Interestingly Amazon survived the dot-com bust of the early 2000-2001 time unlike Yahoo, AOL, etc. Contrast this to the $4.8B valuation of Yahoo’s core business acquired by Verizon last week! Also, the fastest growing and most profitable of Amazon’s 3 businesses (Books, any commercial items, and AWS) is the cloud infrastructure piece called AWS (Amazon Web Services) with a run-rate of $10B this year. This is way ahead of Microsoft’s Azure cloud or Google’s cloud solutions. 

The importance of cloud is obvious as Oracle just paid $9.3B last week to acquire Netsuite, a company that was funded by Larry Ellison. With a 40% ownership of Netsuite, he gets a hefty $3.5B from this deal. Paradoxically, Amazon lead the way to cloud computing – not IBM, not HP, not EMC/VMWare, and not Microsoft or Google. So no wonder, Amazon is reaping the benefits!