Category Archives: Microsoft

Serverless, FaaS, AWS Lambda, etc..

If you are part of the cloud development community, you certainly know about “serverless computing”, almost a misnomer. Because it implies there are no servers which is untrue. However the servers are hidden from the developers. This model eliminates operational complexity and increases developer productivity.

We came from monolithic computing to client-server to services to microservices to serverless model. In other words, our systems have slowly “dissolved” from monolithic to function-by-function. Software is developed and deployed as individual functions – a first-class object and cloud runs it for you. These functions are triggered by events which follows certain rules. Functions are written in fixed set of languages, with a fixed set of programming model and cloud-specific syntax and semantics. Cloud-specific services can be invoked to perform complex tasks. So for cloud-native applications, it offers a new option. But the key question is what should you use it for and why.

Amazon’s AWS, as usual, spearheaded this in 2014 with a engine called AWS Lambda. It supports Node, Python, C# and Java. It uses AWS API triggers for many AWS services. IBM offers OpenWhisk as a serverless solution that supports Python, Java, Swift, Node, and Docker. IBM and third parties provide service triggers. The code engine is Apache OpenWhisk. Microsoft provides similar function in its Azure Cloud function. Google cloud function supports Node only and has lots of other limitations.

This model of computing is also called “event-driven” or FaaS (Function as a Service). There is no need to manage provisioning and utilization of resources, nor to worry about availability and fault-tolerance. It relieves the developer (or devops) from managing scale and operations. Therefore, the key marketing slogans are event-driven, continuous scaling, and pay by usage. This is a new form of abstraction that boils down to function as the granular unit.

At the micro-level, serverless seems pretty simple – just develop a procedure and deploy to the cloud. However, there are several implications. It imposes a lot of constraints on developers and brings load of new complexities plus cloud lock-in. You have to pick one of the cloud providers and stay there, not easy to switch. Areas to ponder are cost, complexity, testing, emergent structure, vendor dependence, etc.

Serverless has been getting a lot of attention in last couple of years. We will wait and see the lessons learnt as more developers start deploying it in real-world web applications.

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Amazon+Whole Foods – How to read this?

Last Thursday (June 15, 2017), Amazon decided to acquire Whole Foods for a whopping $13.7B ($42 per share, a 27% premium to its closing price). On Friday, stock prices of Walmart, Target, and Costco took a hit downwards, while Amazon shares went up by more than 2%. So why did Amazon buy Whole Foods? Clearly Amazon sees groceries as an important long-term driver of growth in its retail segment. What is funny is that a web pioneer with no physical retail outlet decided to get back to the brick-and-mortar model. Amazon has also started physical bookstores at a few cities. We have come full circle.

Amazon grocery business has focussed on Amazon Fresh subscription service so far to deliver online food orders. Amazon will eventually use the stores to promote private-label products, integrate and grow its AI powered Echo speakers, boost prime membership and entice more customers into the fold. Hence this acquisition is the start of a long term strategy. Amazon is known for its non-linear thinking. Just see how it started a brand new business with AWS about 12 years back and now it is a $14B business with a 50%+ margin. It commands a powerful leadership position in the cloud computing business and competitors like Microsoft Azure or Google’s GCE are trying hard to catch up.

The interesting thing to ponder is how the top tech companies are spreading their tentacles. This was a front-page article in today’s WSJ. Apple, a computer company that became a phone company, is now working on self-driving cars, TV programming, and augmented reality. It is also pushing into payments territory challenging the banks. Google parent Alphabet built Android which now runs most PC devices. It ate the maps industry; it’s working on internet-beaming balloons, energy-harvesting kites, and self-driving technologies. Facebook is creating drones, VR hardware, original TV shows, and even telepathic brain computers. Of course Elon Musk brings his tech notions to any market he pleases – finance, autos, energy, and aerospace.

What is special about Amazon is that it is willing to work on everyday problems. According to the author of the WSJ article, this may be the smarter move in the long run. While Google and Facebook have yet to drive significant revenue outside their core, Amazon has managed to create business after business that is profitable, or at least not a drag on the bottom line. The article ends with cautionary note, “Imagine a future in which Amazon, which already employs north of 340,000 people worldwide, is America’s biggest employer. Imagine we are all spending money at what’s essentially the company store, and when we get home we’re streaming Amazon’s media….”

With few tech giants controlling so many businesses, are we comfortable to get all our goods and services from the members of an oligopoly?

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 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!

Microsoft + LinkedIn @ $26.2 billion cash!

This is big news this morning – Microsoft buying LinkedIn at $26.2B cash. LinkedIn’s stock is soaring by 47% as we write while Microsoft stock is falling! This is one of the biggest acquisitions since Dell’s acquiring EMC few months back. So how does this work?

Well, Satya Nadella explains the importance of a professional network in their scheme of cloud offerings, from Office360 to Dynamics. Imagine walking to a meeting and viewing all the attendees info from their LinkedIn profiles. He said, “It helps us differentiate our CRM product with social selling. It helps us take Dynamics [Microsoft’s suite of business management software] into new spaces like human capital management with recruiting, and learning, and talent management.”

LinkedIn had a bad quarter and the stock was going south by as much as 40%. So there was some anxiety on where the company was heading in future. They saw this opportunity to be part of a larger company and the board quickly jumped into this offer, as it seems. As far as the synergy is concerned, time will tell how they integrate and make it look like a seamless cloud offering. Reid Hoffman, chairman of LinkedIn will stay as an advisor, but his new role is yet to be defined. Jeff Weiner will continue to stay as CEO reporting to Nadella.

This certainly strengthens Microsoft’s cloud presence and adds value to the Dynamics business more than the Office360 side. But use of Office360 suite in creating and managing documents/profiles may add to the growth of that business. If they can make it a success, Satya Nedella’s leadership will have a new feather in his cap.

Stack Fallacy? What is it?

Back in January, Tech Crunch published an article on this subject called Stack Fallacy, written by Anshu Sharma of Storm Ventures. Then today I read this Business Insider article on the reason why Dropbox is failing and it is the Stack Fallacy.  Sharma describes Stack Fallacy as “the mistaken belief that it is trivial to build the layer above yours.”

Many companies trivialize the task of building layers above their core competency layer and that leads to failure. Oracle is a good example, where they thought it was no big deal to build applications (watching the success of SAP in the ERP layer initially built on the Oracle database). I remember a meeting with Hasso Plattner, founder of SAP back in the early 1990s when I was at Oracle. He said SAP was one of the biggest customers of Oracle at that time and now Oracle competes with them. For lack of any good answer, we said that we are friends in the morning and foes in the afternoon and welcomed him to the world of  “co-opetition”. Subsequently SAP started moving out of Oracle DB and was enticed by IBM to use DB2. Finally SAP built its own database (they bought Sybase and built the in-memory database Hana). Oracle’s applications initially were disasters as they were hard to use and did not quite meet the needs of customers. Finally they had to win the space by acquiring Peoplesoft and Siebel.

Today’s Business Insider article says, “…a lot of companies often overvalue their level of knowledge in their core business stack, and underestimate what it takes to build the technology that sits one stack above them.  For example, IBM saw Microsoft take over the more profitable software space that sits on top of its PCs. Oracle likes to think of Salesforce as an app that just sits on top of its database, but hasn’t been able to overtake the cloud-software space they compete in. Google, despite all the search data it owns, hasn’t been successful in the social-network space, failing to move up the stack in the consumer-web world. Ironically, the opposite is true when you move down the stack. Google has built a solid cloud-computing business, which is a stack below its search technology, and Apple’s now building its own iPhone chips, one of the many lower stacks below its smartphone device”.

With reference to Dropbox, the article says that it underestimated what it takes to build apps a layer above (Mailbox, Carousel), and failed to understand its customers’ needs — while it was investing in the unimportant areas, like the migration away from AWS. Dropbox is at a phase where it needs to think more about the users’ needs and competing with the likes of Google and Box, rather than spending on “optimizing for costs or minor technical advantages”.

Not sure, I agree with that assessment. Providing efficient and cost-effective cloud storage is Dropbox’s core competency and they are staying pretty close to that. The move away from AWS is clearly aimed at cost savings, as AWS can be a huge burden on operational cost, plus it has its limitations on effective scaling. In some ways, Dropbox is expanding its lower layers for future hosting. It’s focus on enterprise-scale cloud storage is the right approach, as opposed to Box or Google where the focus is on consumers.

But the Stack Fallacy applies more to Apple doing its own iPhone chips, or Dell wrongfully going after big data. At Oracle the dictum used to be, “everything is a database problem – if you have a hammer, then everything looks like a nail”.

In Memoriam – Ed Lassettre

I was out of the country when my old colleague from IBM days, Ed Lassettre passed away last November. I only found out earlier this month about his demise from a mutual friend from IBM Almaden Research. Ed was one of the best computer software professionals I knew and respected.

He was at IBM’s Santa Teresa Lab (now called Silicon Valley Lab) when I started there back in 1981 after my five-year stint at IBM Canada. That year he got promoted to a Senior Technical Staff member (STSM), the very first at the lab to get that honor. Subsequently he became an IBM Fellow, the highest technical honor. His reputation of being one of the key software engineers for IBM’s MVS operating system preceded him. Ed had spent a few years at IBM’s Poughkeepsie Lab in upstate New York. He did his undergraduate  and post-graduate studies at Ohio State University in Math. He had deep insights into the intricacies of high performance computing systems. When we were building DB2 at the IBM lab, Ed was providing guidance on its interface with the operating system.

Subsequently I went to IBM’s Austin Lab for two years in the mid-1980s to lay the foundation of the DB2 product for the PC (which at the time lacked the processing power and memory of the large mainframes). Hence our design had to accommodate to those limitations. The IBM executives wanted someone to audit our design before giving the green signal for development. I could not think of a better person than Ed Lassettre to do that. At my request Ed spent some time and gave a very positive report on our design. He had great credibility in the technical community. Many times, I sought his views on technical matters and he provided timely advice. His wisdom was complemented by a tremendous humility, a rare feature in our industry.

I had left IBM back in 1992 for Oracle and lost touch with Ed. Later on I found that he had retired from IBM and joined Microsoft Research. He was a good friend of the late Jim Gray, also at Microsoft Research at the time. Ed retired from Microsoft in 2013 at the age of 79! He was quite well-known in the HPTC (High Performance Technical Computing) world.

RIP, Ed Lassettre, a great computer scientist and friend! You will be missed.