'Open source is now mainstream..' (no replies)        
'Open source is now mainstream. More and more developers, organizations, and enterprises are are understanding the benefits of an open source strategy and getting involved. In fact, The Linux Foundation is on track to reach 1,000 participating organizations in 2017 and aims to bring even more voices into open source technology projects ranging from embedded and automotive to blockchain and cloud.'

- Mike Woster, Global Enterprises Join The Linux Foundation to Accelerate Open Source Development Across Diverse Industries, March 30, 2017


Context

(Open Source) - '..“open innovation.” Companies such as AstraZeneca, Lilly, GSK, Janssen, Merck, Pfizer, Sanofi, TransCelerate, and others..'

'..Microsoft, is shifting over to open source for its development.'

          Lead Blockchain Engineer - Talla        
Boston, MA - Lead Blockchain Engineer Boston, MA or Palo Alto, CA
Talla is looking for an entrepreneurial lead blockchain software engineer with experience building innovative services and technologies to help Talla incorporate blockchain & cryptocurrency functionality into their
          Comment on The Crypto stock that’s better than GBTC by ghostface        
Was there recently some insider purchases on the open market? He supposedly got into mining to learn the crypto currency/blockchain business with plans to use that in circling back to security. So far just his secure phone idea. Not sure if this will all pan out but if we compare blockchain excitment to 1999 dot com bubble where there were new ipos and re-imagined stale companies adding dot com to their name and stocks galore exploding higher every day. Under the current situation there is a a dearth of choices on the securities front with a lot of money still learning and wanting to chase any crpto/blockchain story. The money has yet to rush into the limited stocks offering a home to the demand imo. I had forgotten about this one. Thanks for the heads up.
          How Blockchain Technology is Disrupting the Adtech Space        
Blockchain technology: it’s one of the most innovative and talked about technological developments that you actually haven’t heard about. In its most basic sense, blockchain technology allows for digital information to be properly distributed rather...
          Recent Cases Demonstrate Need for Blockchain        

          Comment on Blockchain Betting Platform vDice Raises $1m in Just 90 Minutes by Gulden.Bet        
Nice post! We would like to let you know our beta version of Gulden.bet. Create your football bet on the fly without account and pay with your Gulden wallet. We have had more than 6500 bets in the last 6 months of 2016 :) Just give it a try at: https://gulden.bet https://uploads.disquscdn.com/images/0de679bc30c72208637692bab0ab112365eb5ef465e7cdeea8df7b748aa1abe9.png
          Comment on vDice ICO Offers Investment Opportunity to Be Part of Blockchain Gaming Revolution by Vlad Ilnitskiy        
https://coinidol.com/blockcdn-releases-tv-set-top-box-cryptocurrency-mining/ BlockCDN Releases New TV Set-Top Box For Cryptocurrency Mining
          La blockchain progresse dans le secteur bancaire        
65% des banques s’attendent à être en production dans 3 ans
          ä½œè€…:BW.COM        
Circle为比特币及blockchain做了很多努力,进行了很多工作。Bitcoin is not blockchain, blockchain is not bitcoin.
          Comment on Bartini Aerotaxi: Man’s Wheels In the Air while onboard Blockchain Taxi! by Anonymous        
Am proud of you
          Microsoft announces open source Coco Framework to speed up enterprise blockchain adoption        
Microsoft has today announced Coco Framework, a means of simplifying the adoption of blockchain protocol technology. The aim is to speed up the adoption of blockchain-based systems in the enterprise, whilst simultaneously increasing privacy. Coco -- short for Confidential Consortium -- will be available in 2018, and Microsoft will be making the technology open source to help increase uptake. Intel is working with Microsoft as a hardware and software partner, and Coco Framework features Intel Software Guard Extensions (Intel SGX) to improve transaction speed at scale. The framework is compatible with Ethereum, but Microsoft envisions it being used across financial… [Continue Reading]
          Introducing the Accord Project: “The future of law will be revolutionized by legaltech”        

We've been so focused on the benefits blockchain has on the finance sector that we've forgotten about the legal industry. Enter the Accord Project, the world’s first consortium for smart legal contracts. It's worth your attention because it seems to be the place where legal and tech come together. We invited Peter Hunn and Houman Shadab, founders of Clause.io to tell us more about the Accord Project and the aim of this initiative.

The post Introducing the Accord Project: “The future of law will be revolutionized by legaltech” appeared first on JAXenter.


          Blockchain – An Emerging Force in the New Gold Bull Market        

If there’s one thing gold doesn’t suffer from, it’s a lack of fair-weather friends. Recently, the yellow metal has seen more of its share. Investment gurus love to flood the airwaves and Internet with praise for gold when it looks … Continue reading

The post Blockchain – An Emerging Force in the New Gold Bull Market appeared first on Fortress Gold Group.


          Spring 2017 tech reading        
Hello and a belated happy new year to you! Here's another big list of articles I thought was worth sharing. As always thanks to the authors who wrote these articles and to the people who shared them on Twitter/HackerNews/etc.

Distributed systems (and even plain systems)

Tuning

SQL lateral view

Docker and containers

Science and math

Golang

Java streams and reactive systems

Java Lambdas

Just Java

General and/or fun

Until next time!

          VoIP & Tell: VUC653 - IoT, LBRY and more Blockchain        
Another far-ranging discussion by the panel
          Stuff The Internet Says On Scalability For August 4th, 2017        

Hey, it's HighScalability time:


Hands down the best ever 25,000 year old selfie from Pech Merle cave in southern France. (The Ice Age)

If you like this sort of Stuff then please support me on Patreon.

 

  • 35%: US traffic is now IPV6; 10^161: decision points in no-limit Texas hold’em; 4.5 billion: Facebook translations per day; 90%: savings by moving to Lambda; 330TB: IBM's tiny tape cartridge, enough to store 330 million books; $108.9 billion: game revenues in 2017; 85%: of all research papers are on Sci-Hub; 1270x: iPhone 5 vs Apollo guidance computer; 16 zettabytes: 2017 growth in digital universe; 

  • Quotable Quotes:
    • Andrew Roberts: [On Napoleon] No aspect of his command was too small to escape notice.
    • Jason Calacanis: The world has trillions of dollars sitting in bonds, cash, stocks, and real estate, which is all really “dead money.” It sits there and grows slowly and safely, taking no risk and not changing the world at all. Wouldn’t it be more interesting if we put that money to work on crazy experiments like the next Tesla, Google, Uber, Cafe X, or SpaceX?
    • @icecrime: The plural of “it’s not a bug, it’s a feature” is “it’s not a bug tracker, it’s a backlog”.
    • Jeff Darcy: When greater redundancy drives greater dependency, it’s time to take a good hard look at whether the net result is still a good one.
    • uhnuhnuhn: "They ran their business into the ground, but they did it with such great tech!"
    • Anglés-Alcázar: It’s very interesting to think of our galaxy not as some isolated entity, but to think of the galaxy as being surrounded by gas which may come from many different sources. We are connected to other galaxies via these galactic winds.
    • @ojiidotch: Main app now running Python 3.6 (was 2.7 until yesterday). CPU usage 40% down, avg latency 30% down, p95 60% down.
    • Nemanja Mijailovic: It’s really difficult to catch all bugs without fuzzing, no matter how hard you try to test your software. 
    • SandwichTeeth: a lot of companies have security teams solely to meet audit requirements. If you find yourself on a team like that, you'll be spending a lot of time just gathering evidence for audits, remediating findings and writing policy. I really loved security intellectually, but in practice, the blue-team side of things wasn't my cup of tea.
    • jph: security is needed to gradually escalate a user's own identity verification -- think of things like two-factor auth and multi-factor auth, that can phase in (or ramp up) when a user's actions enter a gray area of risk. Some examples: when a user signs in from a new location, or a user does an especially large money transfer, or a user resumes an account that's been dormant for years, etc.
    • @hichaelmart: So while Google is doubling down on gRPC it seems that Amazon is going all in with CBOR. DDB DAX uses some sort of CBOR-over-sockets AFAICT
    • Wysopal: I’d like to see someone fixing this broken market [insecure software and hardware market]. Profiting off of that fix seems like the best approach for a capitalism-based economy.
    • Matthias Käppler: Microservices are often intermediate nodes in a graph of services, acting as façades where an incoming request translates to N outgoing requests upstream, the responses to which are then combined into a single response back downstream to the client.
    • Jack Fennimore: EA Play 2017 was watchable the same way Olive Garden is edible.
    • erikb: [On SoundCloud] TL;DR Top Management started too late to think about making actual money. They also hired an asshole for their US offices. When they got an opportunity to be bought by Twitter they asked for way too much money. And the CEO is basically on a constant holidays trip since 2014, while not failing to rub it in everybody's face via Instagram photos.
    • Jennifer Mendez: If you don’t have the games people want to play, you can wave goodbye to return on investment on a powerful console. Does hardware matter? Of course it does! But it doesn’t matter if you don’t have anything to play on it.
    • Alex Miller: The utility of a blockchain breaks down in a private or consortium setting and should, in my opinion, be replaced by a more performant engine like Apache Kafka.
    • Krish: most of the multi-cloud usecases I am seeing are about using different cloud for different workloads. It could change and I would expect them to embrace the eventual consistency model initially
    • Ian Cutress: Then there is the Ryzen 3 1300X. Compared to the Core i3-7300/7320 and the Core i5-7400, it clearly wins on performance per dollar all around. Compared to the Core i3-7100 though, it offers almost 5% more performance for around $10-15 more, which is just under 10% of the cost.
    • throw2016: Just from an year ago the cpu market has changed completely. The sheer amount of choice at all levels is staggering. For the mid level user the 1600 especially is a formidable offering, and the 1700 with 8 cores just ups the ante.
    • danmaz74: the main reason Rails is declining in relevance isn't microservices or the productivity (!) of Java, but the fact that more and more development effort for web applications is moving into JS front-end coding.
    • Rohit Karlupia: we can deal with [S3] eventual consistency in file listing operations by repeating the listing operation, detecting ghost and conceived files and modifying our work queues to take our new knowledge about the listing status into account.
    • tboyd47: It's the end of an era. From 2005 to 2007, the "Web 2.0" craze, the release of Ruby on Rails, and the rise of Agile methods all happened at once. These ideas all fed into and supported each other, resulting in a cohesive movement with a lot of momentum. The long-term fact turned out to be that this movement didn't benefit large corporations that have always been and usually still are the main source of employment for software developers. So we have returned to our pre-Rails, pre-agile world of high specialization and high bureaucratic control, even if Rails and "Agile" still exist with some popularity.
    • @reneritchie: Only beginning to see the advantages of Apple making everything from atom to bit. Everything will be computational.
    • Vasiliy Zukanov: switching to Kotlin will NOT have any appreciable positive gains on the cost, the effort or the schedule of software projects
    • visarga: Over the years I have seen astronomy become more like biology - diverse both in the kinds of objects it describes and their behavior.
    • Jaana B. Dogan: I think the industry needs a breakdown between product and infra engineering and start talking how we staff infra teams and support product development teams with SRE. The “DevOps” conversation is often not complete without this breakdown and assuming everyone is self serving their infra and ops all the times.
    • David Rosenthal~ Does anybody believe we'll be using Bitcoin or Ethereum 80 years from now?
    • Richard Jones: There is a physical lower limit on how much energy it takes to carry out a computation – the Landauer limit. The plot above shows that our current technology for computing consumes energy at a rate which is many orders of magnitude greater than this theoretical limit (and for that matter, it is much more energy intensive than biological computing). There is huge room for improvement – the only question is whether we can deploy R&D resources to pursue this goal on the scale that’s gone into computing as we know it today.
  • Don't miss all that the Internet has to say on Scalability, click below and become eventually consistent with all scalability knowledge (which means this post has many more items to read so please keep on reading)...


          Stuff The Internet Says On Scalability For July 21st, 2017        

Hey, it's HighScalability time:

Afraid of AI? Fire ants have sticky pads so they can form rafts, build towers, cross streams, & order takeout. We can CRISPR these guys to fight Skynet. (video, video, paper)

If you like this sort of Stuff then please support me on Patreon.

 

  • 222x: Bitcoin less efficient than a physical system of metal coins and paper/fabric/plastic; #1: Python use amongst Spectrum readers; 3x: time spent in apps that don't make us happy; 1 million: DigitalOcean users; 11.6 million: barrels of oil a day saved via tech and BigData; 200,000: cores on Cray super computer;$200B: games software/hardware revenue by 2021; $3K: for 50 Teraflops AMD Vega Deep Learning Box; 24.4 Gigawatts: China New Solar In First Half Of 2017; 

  • Quotable Quotes:
    • sidlls: I think instead there is a category error being made: that CS is an appropriate degree (on its own) to become a software engineer. It's like suggesting a BS in Physics qualifies somebody to work as an engineer building a satellite.
    • Elon Musk: AI is a fundamental existential risk for human civilization, and I don’t think people fully appreciate that
    • Mike Elgan: Thanks to machine learning, it's now possible to create a million different sensors in software using only one actual sensor -- the camera.
    • Amin Vahdat (Google): The Internet is no longer about just finding a path, any path, between a pair of servers, but actually taking advantage of the rich connectivity to deliver the highest levels of availability, the best performance, the lowest latency. Knowing this, how you would design protocols is now qualitatively shifted away from pairwise decisions to more global views.
    • naasking: You overestimate AI. Incompleteness is everywhere in CS. Overcoming these limitations is not trivial at all.
    • 451: Research believes serverless is poised to undergo a round of price cutting this year.
    • Nicholas Bloom: We found massive, massive improvement in performance—a 13% improvement in performance from people working at home
    • @CoolSWEng: "A Java new operation almost guarantees a cache miss. Get rid of them and you'll get C-like performance." - @cliff_click #jcrete
    • DarkNetMarkets: We're literally funding our own investigation. 
    • Tristan Harris: By shaping the menus we pick from, technology hijacks the way we perceive our choices and replaces them with new ones. But the closer we pay attention to the options we’re given, the more we’ll notice when they don’t actually align with our true needs.
    • xvaier: If I have one thing to tell anyone who is looking for business ideas to try out their new programming skills on, I strongly suggest taking the time to learn as much as possible about the people to whom you want to provide a solution, then recruiting one of them to help you build it, lest you become another project that solves a non-issue beautifully.
    • @sebgoa: Folks, there were schedulers before kubernetes. Let's get back down to earth quickly
    • Mark Shead: A finite state machine is a mathematical abstraction used to design algorithms. In simple terms, a state machine will read a series of inputs. When it reads an input it will switch to a different state. Each state specifies which state to switch for a given input. This sounds complicated but it is really quite simple.
    • xantrel: I started a small business that started to grow, I thought I had to migrate to AWS and increase my cost by 5xs eventually, but so far Digital Ocean with their hosted products and block storage has handled the load amazingly well.
    • danluu: when I’m asked to look at a cache related performance bug, it’s usually due to the kind of thing we just talked about: conflict misses that prevent us from using our full cache effectively6. This isn’t the only way for that to happen – bank conflicts and and false dependencies are also common problems
    • Charles Hoskinson: People say ICOs (Initial Coin Offering) are great for Ethereum because, look at the price, but it’s a ticking time-bomb. There’s an over-tokenization of things as companies are issuing tokens when the same tasks can be achieved with existing blockchains. People are blinded by fast and easy money.
    • Charles Schwab: There don't seem to be any classic bubbles near bursting at the moment—at least not among the ones most commonly referenced as potential candidates.
    • Sertac Karaman: We are finding that this new approach to programming robots, which involves thinking about hardware and algorithms jointly, is key to scaling them down.
    • Michael Elling: When do people wake up and say that we’ve moved full circle back to something that looks like the hierarchy of the old PSTN? Just like the circularity of processing, no?
    • Benedict Evans: Content and access to content was a strategic lever for technology. I’m not sure how much this is true anymore.  Music and books don’t matter much to tech anymore, and TV probably won’t matter much either. 
    • SeaChangeViaExascaleOnDown: Currently systems are still based around mostly separately packaged processor elements(CPUs, GPUs, and other) processors but there will be an evolution towards putting all these separate processors on MCMs or Silicon Interposers, with silicon interposers able to have the maximum amount of parallel traces(And added active circuitry) over any other technology.
    • BoiledCabbage: Call me naive, but am I the only one who looks at mining as one of the worst inventions for consuming energy possible?
    • Amin Vahdat (Google):  Putting it differently, a lot of software has been written to assume slow networks. That means if you make the network a lot faster, in many cases the software can’t take advantage of it because the software becomes the bottleneck.

  • Dropbox has 1.3 million lines of Go code, 500 million users, 500 petabytes of user data, 200,000 business customers, and a multi-exabyte Go storage system. Go Reliability and Durability at Dropbox. They use it for: RAT: rate limiting and throttling; HAT: memcached replacement; AFS: file system to replace global Zookeeper; Edgestore: distributed database; Bolt: for messaging; DBmanager: for automation and monitoring of Dropbox’s 6,000+ databases; “Jetstream”, “Telescope”, block routing, and many more. The good: Go is productive, easy to write and consume services, good standard library, good debugging tools. The less good: dealing with race conditions.

  • Professor Jordi Puig-Suari talks about the invention of CubeSat on embedded.fm. 195: A BUNCH OF SPUTNIKS. Fascinating story of how thinking different created a new satellite industry. The project wasn't on anyone's technology roadmap, nobody knew they needed it, it just happened. A bunch of really bright students, in a highly constrained environment, didn't have enough resources to do anything interesting, so they couldn't build spacecraft conventionally. Not knowing what you're doing is an advantage in highly innovative environments. The students took more risk and eliminated redundancies. One battery. One radio. Taking a risk that things can go wrong. They looked for the highest performance components they could find, these were commercial off the shelf components that when launched into space actually worked. The mainline space industry couldn't take these sort of risks. Industry started paying attention because the higher performing, lower cost components, even with the higher risk, changed the value proposition completely. You can make it up with numbers. You can launch 50 satellites for the cost of one traditional satellite. Sound familiar? Cloud computing is based on this same insight. Modern datacenters have been created on commodity parts and how low cost miniaturized parts driven by smartphones have created whole new industries. CubeSats' had a standard size, so launch vehicles could standardize also, it didn't matter where the satellites came from, they could be launched. Sound familiar? This is the modularization of the satellite launching, the same force that drives all mass commercialization. Now the same ideas are being applied to bigger and bigger spacecraft. It's now a vibrant industry. Learning happens more quickly because they get to fly more. Sound familiar? Agile, iterative software development is the dominant methodology today. 

Don't miss all that the Internet has to say on Scalability, click below and become eventually consistent with all scalability knowledge (which means this post has many more items to read so please keep on reading)...


          Å to su bitcoin, blockchain i kriptovaluta?        
Zamislite novac iza kojeg ne stoje banke, složene i skupe institucije koje njime upravljaju. Novac koji je u cijelom svijetu prisutan, svuda...
          Links of interest        
  1. OMICS (a fraudulent open access journal) now has a journal for climate change deniers whose logic includes "the ‘greenhouse theory’ cannot be correct because real greenhouses have glass roofs and the atmosphere does not."
  2. Looking for online videos to learn economics? Here. (Oh, and don't forget that economics is not a science!)
  3. My "thoughts on sustainable solutions" (PDF slides and 58 min MP3)
  4. Water managers are wasting money and/or harming the environment by taking too much water in California, where "water users appeared to more easily achieve the water use reductions requested by utilities during more recent droughts" and Orange Country (California) water managers consistently over-estimate demand [pdf]
  5. Circle, a blockchain-based FinTech company is offering zero cost, "bank rate" multi-currency transfers. I signed up but have not tried it yet.
  6. Bitcoin Energy Consumption Index, (premature) Ethereum Obituaries and WTF is Ethereum? (A good primer)
  7. "Writing advice to my students that would also have been good sex advice for my high school boyfriends"
  8. Not-the-Onion: Bic pens... for her. Read the reviews!
  9. Mumbai was built on a wetlandsthe origin of London's sewers and how Amsterdam invented bike sharing
  10. "Water Security and Climate Change: The Need for Adaptive Governance"
  11. How bureaucracy fails (UK edition)
H/T to TL

          Darwin Lab Off-Campus For Freshers : BE / BTech – 2017/ 2016 Batch : Technical Analyst : Gurgaon : On Aug 2017        
Darwin Lab Pvt Limited [www.darwinlabs.io] Darwin Lab Off-Campus For Freshers : BE / BTech – 2017/ 2016 Batch : Technical Analyst @ Gurgaon Exclusive Job For PresentJobs.com Job Description :  About The company: Darwin Labs is a Gurgaon based studio & incubator working on bringing our three verticals (Virtual Reality, Blockchain Technology & AdTech) together. ...
          Darwin Lab Off-Campus For Freshers : BE / BTech – 2017/ 2016 Batch : Software Developer : Gurgaon : On Aug 2017        
Darwin Lab Pvt Limited [www.darwinlabs.io] Darwin Lab Off-Campus For Freshers : BE / BTech – 2017/ 2016 Batch : Software Developer @ Gurgaon Exclusive Job For PresentJobs.com Job Description :  About The company: Darwin Labs is a Gurgaon based studio & incubator working on bringing our three verticals (Virtual Reality, Blockchain Technology & AdTech) together. Darwin ...
          iMerge invests in blockchain cloud provider Ledgable        
Download this post in PDF format iMerge takes a share in Blockchain-As-A-Service (BaaS) provider Ledgable. Ledgable has developed a unique blockchain service: “we offer a platform where clients can create their own blockchain in less than half an hour. They define the data structure and autorisations, we do the rest. With this cloud solutions, companies … Continue reading iMerge invests in blockchain cloud provider Ledgable
          Blockchain: Auch die Zukunft der Medien hängt an einer Kette        
Dies war mein letzter Artikel, den ich für das WirtschaftsBlatt geschrieben haben. Am 2. September wurde die einzige Wirtschaftstageszeitung Österreichs eingestellt. Wir hatten in der Zeitung eine Rubrik, die hieß Wirtschaftswunder. Hier war eigentlich alles erlaubt: Reportagen, Features und auch Meinungsstücke oder Analysen. Oder alles zusammen. Schön, dass jemand der nicht an Wirtschaftswunder glaubt, das letzte Stück in dieser Rubrik schreiben durfte. Der Begriff der Blockchain kommt hier allerdings zu kurz, so dass ich auf folgenden Artikel (Was ist eigentlich die Blockchain?) aus der FAZ verlinken möchte. Gern hätten wir auch in den nächsten 21 Jahren beschrieben und beleuchtet, wie und wo die Geschäfte in Österreich und auf der Welt gut und wo sie schlecht laufen. In den nächsten Wochen und Monaten werden wir stattdessen die vielen Karriere-Beilagen des WirtschaftsBlatts durchsehen, die seit 1995 Woche für Woche erschienen sind: Tipps für Bewerbungen oder wie man eine Firma gründet wird uns...
          VIDEO: Blockchain explained in three minutes        
It's early days in understanding the technology's potential in finance. FN presents a quick walk-through of the story so far
          The public vs private debate on blockchain        
Bitcoin promised to open up the current financial system but blockchains run by top-tier banks would be the opposite of that libertarian dream
          Blockchain: Four financial frontrunners        
Brainstorming ideas, setting up specialist labs, launching small-scale systems...FN looks at how four big names in finance are exploring blockchain
          Bitcoin, App Security, and Oracle's Controversial Licensing Policies        
Discover how blockchain, the tech behind bitcoin, is extending its reach beyond financial services into new industries. Also learn from developers about the pros and cons of componentizing application software, examine what a recent court case shows about Oracle's licensing policies, and more. Published by: ComputerWeekly.com
          A shiny new look, improved (Open Source) docs, and touch down in Singapore        

Picture the scene. It’s late at night. You’re surrounded by takeout boxes and coffee cups. You’re not sure when it got dark and you really need the bathroom, but just… 10.. minutes… more… perfecting your distributed blockchain deep-learning-powered todo list app (that also controls the weather). Sound familiar? We get it: we’ve been there too. […]

The post A shiny new look, improved (Open Source) docs, and touch down in Singapore appeared first on Tyk API Gateway and API Management.


          Reactie op Doorbraakinnovaties in de logistiek – blockchain door Bruis van Driel        
De crux zit hem erin dat afgesproken standaarden gerespecteerd dienen te worden. Dit nastreven wordt exponentieel moeilijker met de toename in het aantal participanten en processen. Bij AirBnB zijn er vijf participanten (huurder, verhuurder, bank voor elk van hen, airbnb). Van hoe bitcoin opgezet is heb ik niet veel verstand, maar zijn het er drie volgens mij (miner, koper, verkoper). Bij (inter)nationaal transport zijn dit er veel meer (koper, verkoper, fabriekant, voor elke modaliteit (lucht, weg, rail, (deep-)sea) een of meerdere vervoerders, terminals, luchthavens, banken voor elke partij, kredietverstrekkers, lokale, regionale, nationale en supranationale overheden. Vooral in die laatse groep financiele instelling en overheden zit een grote hoeveelheid complexititeit die niet te sturen is omdat overheden zich in het algemeen slecht laten sturen en al zeker niet in de richting van een standaard die geen direct gewin oplevert. De marktpartijen in de industrie zullen ook niet snel afstappen van systemen waarin veel geld is geinvesteerd De technologie in delen van de keten inbrengen zal wel lukken, maar om de hele keten dezelfde technologie te laten gebruiken gaat nog (teintallen) jaren duren, wat niet wil zeggen dat het niet geprobeerd moet worden. Maar disruptive zou ik het dan niet meer willen noemen
          SEC Issues Investigative Report Concluding DAO Tokens, a Digital Asset, Were Securities        
Crowdfund Beat News Wire, SEC issued an investigative report stating, “tokens offered and sold by a ‘virtual’ organization known as ‘The DAO’ were securities and therefore subject to the federal securities laws.” U.S. Securities Laws May Apply to Offers, Sales, and Trading of Interests in Virtual Organizations FOR IMMEDIATE RELEASE 2017-131 Washington D.C., July 25, 2017— The Securities and Exchange Commission issued an investigative report today cautioning market participants that offers and sales of digital assets by “virtual” organizations are subject to the requirements of the federal securities laws. Such offers and sales, conducted by organizations using distributed ledger or blockchain technology, have been referred to, among other things, as “Initial Coin Offerings” or “Token Sales.” Whether a particular investment transaction involves the offer or sale of a security – regardless of the terminology or technology used – will depend on the facts and circumstances, including the economic realities of the transaction. The SEC’s Report of Investigation found that tokens offered and sold by a “virtual” organization known as “The DAO” were securities and therefore subject to the federal securities laws. The Report confirms that issues of distributed ledger or blockchain technology-based securities must register offers and sales of such securities unless a valid exemption applies. Those participating in unregistered offerings also […]
          Delaware Blockchain Initiative?        
Crowdfund Beat News Wire, Delaware Blockchain Initiative: Transforming the Foundational Infrastructure of Corporate Finance or much of American corporate finance is Delaware corporate law. Later this year, a small change to Delaware corporate law, if enacted, could facilitate a major simplification of the plumbing of the financial system built on top of that foundation. The change is part of the Delaware Blockchain Initiative (DBI), which then-Governor Jack Markell introduced in May 2016. The initiative will allow for the application of distributed ledger technology to many of the private sector’s most basic and critical legal documents, which companies currently file with the Delaware Division of Corporations. What Is Blockchain Technology? Blockchain technology, also known as distributed ledger technology, is a new type of information technology that combines two components: distributed ledgers and smart contracts. Distributed ledgers are mutual, shared ledgers. They create a single record of transactions among multiple parties, providing one immutable, “golden copy” of data that all parties see at the same time and can trust as valid. Consequently, parties do not need to maintain their own copies and reconcile with each other. Distributed ledgers are append-only databases that maintain a perfect, immutable audit trail of who did what […]
          23 mai Lundi de l'IE , organisés par le Cercle d'Intelligence Economique du MEDEF ILE-DE-FRANCE, nous vous invitons à l'événement suivant Le phénomène blockchain quels enjeux, quels usages         
Secuobs.com : 2016-04-19 17:35:47 - Global Security Mag Online - La blockchain est le protocole qui sous-tend notamment les crypto-monnaies telles que le Bitcoin Mais ses potentialités dépassent largement cet usage Le protocole blockchain apporte la couche de confiance décentralisée qui manquait encore à l'Internet Il est vraisemblable que le phénomène blockchain provoque, dans les mois et les années qui viennent, un véritable bouleversement de l'économie numérique Toutes les grandes institutions mondiales, à commencer par celles du monde bancaire, se sont - Événements
          La blockchain, nouvel ange-gardien des sociétés d'assurance         
Secuobs.com : 2016-04-12 16:37:09 - Global Security Mag Online - Née avec l'avènement du bitcoin et des crypto-monnaies, la blockchain - technologie d'enregistrement des transactions sur un grand livre sécurisé, peut trouver des applications dans tous les secteurs d'activités Elle doit contribuer pleinement à la révolution que connaît aujourd'hui le marché de l'assurance et représente à l'évidence une belle opportunité pour réinventer notre industrie Big data, dématérialisation ou encore machine learning, la digitalisation a créé un séisme dans de nombreux pans de - Points de Vue
          29 novembre au 1er décembre 2016 TRUSTECH incorporating CARTES , l'événement mondial dédié aux technologies basées sur la confiance, annonce une édition 2016 exceptionnelle        
Secuobs.com : 2016-04-11 17:47:08 - Global Security Mag Online - - Blockchain, fintech, identification électronique e-gouvernements, et data management seront les thèmes centraux de ce RDV qui se déroulera pour la première fois à Cannes Osama Bedier, CEO de Poynt et JB Straubel, Co-Fondateur de TESLA comptent parmi les personnalités qui s'exprimeront lors des conférences Nouveau nom, nouveau format, nouvelles cibles, nouveau lieu la prochaine édition de l'événement mondial des solutions de paiements sécurisés, d'identification et de connexions ne sera - Événements
          Episode-2046- Cryptocurrency in the Real World ~ Who’s Using it and for What        
TweetBailey Reutzel is an independent freelance journalist covering the intersection of finance, culture and technology. She started writing about bitcoin in early 2013 for American Banker and PaymentsSource and has since become one of the leading journalists covering cryptocurrency, blockchain … Continue reading
          Quest'uomo vuole lo Stato svizzero sullo smartphone        
Daniel Gasteiger è un ex investitore bancario e vuole attuare niente di meno che la rivoluzione digitale dello Stato svizzero. Pioniere della tecnologia civica, si autodefinisce ingenuo. Proprio questa ingenuità potrebbe avvantaggiarlo nella sua missione. "Una giornalista di una radio locale mi ha appena chiesto perché collaboriamo solo con il piccolo cantone di Sciaffusa", ci dice Daniel Gasteiger. "Semplicemente perché lì sono innovativi!" Daniel Gasteiger si interessa di pionieri, i cosiddetti "first mover". Lui vede sé stesso come tale. In questo solco, la sua startup per prestazioni con la tecnologia blockchain (utilizzata in particolare per i Bitcoin), Procivis, ha recentemente annunciato che insieme al cantone di Sciaffusa creerà un'identità elettronica (identificativo digitale, ID) per i cittadini. Questo contributo fa parte di #DearDemocracy, la piattaforma di swissinfo.ch sulla democrazia diretta. A livello nazionale questo gigantesco progetto sarà maturo per una ...
          Ventajas del blockchain para la industria financiera y de la banca        
Aunque el blockchain aún tiene que superar muchos obstáculos para acometer la transformación de la banca que promete, muchas instituciones están invirtiendo en esta tecnología para incorporarla en sus procesos, por el ahorro de costes y la seguridad que garantiza, entre otras ventajas.
          Illinois Opens Blockchain Development Partnership with Hashed Health        
CHICAGO - The Illinois Blockchain Initiative announced today its partnership with blockchain healthcare innovation company Hashed Health, to leverage blockchain and distributed ledger technologies. The pilot program will initially explore opportunities to improve the efficiency and accuracy of the medical credentialing process in Illinois. The concept will leverage a blockchain-based registry to streamline the sharing of medical credential data and smart contracts to automate workflow related to multistate and interstate licensure.
          Visa Taps Blockchain for Cross-Border Payment Plan        
Visa is putting a bitcoin-style network to work as it aims to take on a new market, the large and complex cross-border payments made between businesses.

          Email of the day on good food and the length of the video        

Thank you for sharing your views and experiences of restaurants in Italy’s north east. As humans, we are sensual beings and there are few experiences as satisfying as a good meal with friends which engages all our senses and heightens our mood. The quality and attention to detail that goes into food on both a local and national level is one of the richest evocations of culture there is, which is why our family generally travels to eat more than any other single factor.

China is a vast nation and regulation of the food sector is spotty at best. Therefore, the best policy is to focus on historic significant restaurants and/or those which serve Communist Party cadres. Those are the most likely to use original unadulterated ingredients.

What I have found is that making small changes to my diet has had a positive effect on my cholesterol. I have introduced nuts, particularly walnuts to my diet. I eat a lot more vegetables and fruit and I avoid meat at least a couple of days a week. We also tend to balance meat intake between seafood and animal products on about a 50/50 basis. I make my own granola bars which are high in oatmeal and also eat oatmeal with fruit for lunch most days.

Perhaps the biggest lessons from “Ending the Food Fight” was that there are significant differences in the nutritional value between different kinds of the same food. For example, rolled oats are much more highly processed than steel cut oats. They metabolise much quicker and do not have the same fibre content. The other big point is that how we combine different foods has a large impact in how they are metabolized and what effect they have on our health.


          Goldman-backed startup Circle launches no-fee foreign payments service         

Blockchain technology is increasingly being viewed as a way of transferring data from one location to another in a secure manner that is immune from the types of threats that have assailed the SWIFT network; most spectacularly with the Bangladesh heist. However, speculating on the value of crypto currencies as a business model would appear to be fraught with dangers.


          If you bought $100 of bitcoin 7 years ago, you'd be sitting on $75 million now         

At the Tech Symposium I spoke at in London last week Charlie Morris made a number of important points about bitcoin which I found very educative. The most important of these was his point relating to the fact that bitcoin is a digital asset rather than a currency so it is a misnomer to describe it as a cryptocurrency. The best way to value bitcoin is in the strength of the network supporting it and therefore it is a barometer for the prevalence and acceptance of blockchain.


          Binded: Simple, One-Click Official Copyright Registrations        
Over the past 11 years I’ve talked a great deal about copyright non-repudiation services. These are services that, unofficially, register your work so that you have a third-party verified timestamp of when the work was created. The first post was back in 2006 when I talked about ESBN.org, which later became Numly. In 2008 I wondered if copyright non-repudiation was worthwhile and in 2016 I looked at how blockchain technology might change the industry. However, non-repudiation services have always had one serious problem: They aren’t a substitute for registration with the U.S. Copyright Office. Basically, if you’re in the United States and you want to file a lawsuit for copyright infringement, you’re going to need a registration with the U.S. Copyright Office (USCO). If you want statutory damages and attorneys fees you’re going to need a timely registration, meaning either within 3 months of publication or before the infringement. This made…
          Update for Customers With Bitcoin Stored on Coinbase         

This is not exactly great news for investors in bitcoin since the essence of the platform is that the blockchain is inalienable and now they find that there are going to be two blockchains.


          ÐžÐ¿ÑƒÐ±Ð»Ð¸ÐºÐ¾Ð²Ð°Ð½ Exonum, фреймворк для создания приватных блокчейнов        
Разработчики компании Bitfury Group опубликовали новый фреймворк для разработки приватных блокчейнов Exonum, который позволяет создавать свои безопасные и высокопроизводительные blockchain-решения. Exonum является полностью открытым решением, поэтому пользователям доступна не только вся библиотека кода, но и клиентское программное обеспечение для управления блокчейном. Exonum написан на языке программирования Rust, который уделяет особое внимание вопросам безопасности.
          Blockchain Investment Fund Begins Initial Coin Offering for New PV Plants        

Energy-focused blockchain investment fund Solar DAO yesterday started the preliminary initial coin offering (ICO) for its two-stage crowdfunding campaign to raise funds for the construction of new solar PV plants.

 


          European Energy Trading Firms to Test Blockchain Technology        

A trial of blockchain-based peer-to-peer trading will be undertaken this year in the European wholesale energy market. Swedish power company Vattenfall on June 7 said that its Business Area Markets unit has joined 22 other European energy trading firms to conduct the trial.


          Nevada Governor Signs Bill Providing Legal Recognition of Blockchain        

Nevada Gov. Brian Sandoval this week signed a billed that provides legal recognition of blockchain in satisfying the requirements for written records, specifically contracts.


          How Smart Contracts [Could] Simplify Clean Energy Distribution        

On Tuesday May 9, Rocky Mountain Institute announced that ten energy companies from nine nations, including Sempra and Royal Dutch Shell, had joined the Energy Web Foundation (EWF), a nonprofit comprising of Rocky Mountain Institute and Grid Singularity, with a mission to accelerate the commercial deployment of blockchain technology in the energy sector. The foundation also announced $2.5 million in funding.

This is big news. Why? Because if the vision of what blockchain can do comes true, it could eliminate a lot of the complexities around managing distributed energy resources. And the fact that major energy companies are allocating resources to understand it is evidence that blockchain is worth paying attention to.


           Regis86         
@Bruszczetta: Tylko w takim wypadku to podlega pod rozpowszechnianie materiałów objętych prawem autorskim, za co można beknąć. Trochę frajerstwem by było robić coś takiego i to jeszcze za darmo - istotne ryzyko i zero zysku, a nawet spore koszty (transfer). Moim zdaniem jeśli nie "oszukali" jakoś Chomika (bug w generowaniu tokenów, słaba losowość danych użytych do jego generowania, jakaś luka w "logice biznesowej" chomika, która pozwala dostać darmowy dostęp wielokrotnie etc.), to nie robiliby czegoś takiego, bo rachunek potencjalnych zysków i strat im się nie kalkuluje...

No chyba, że całość jest obliczona na to, żeby zgarniać od ludzi "podarunki" w BTC i liczyć na duży wzrost kursu, bo z dobrowolnych donacji raczej tego nie pociągną - póki co stan konta wynosi 0 :-)

https://blockchain.info/address/1HiftqgxUGxaRxaPw6uJFJzQk8KJ2ERb9Y
          Un 70% de las empresas globales se habrán enfrentado a ciberataques significativos para 2019, según IDC        

La consultora apunta que la inteligencia artificial y el blockchain serán tecnologías claves en los próximos años


          Oferta Inicial de Ctiptomoedas chinesas        
Anúncio: Algumas startups são pioneiras no uso da tecnologia blockchain, e certas estão começando rapidamente a ganhar atenção. Essas startups não estão apenas mudando a maneira como rastreamos,...

Isso é apenas um resumo! Para saber os detalhes dessa oportunidade, acesse o blogdosrepresentantes.com
          Decentralized Long-Term Preservation        
Lambert Heller is correct to point out that:
name allocation using IPFS or a blockchain is not necessarily linked to the guarantee of permanent availability, the latter must be offered as a separate service.
Storage isn't free, and thus the "separate services" need to have a viable business model. I have demonstrated that increasing returns to scale mean that the "separate service" market will end up being dominated by a few large providers just as, for example, the Bitcoin mining market is. People who don't like this conclusion often argue that, at least for long-term preservation of scholarly resources, the service will be provided by a consortium of libraries, museums and archives. Below the fold I look into how this might work.

These institutions would act in the public interest rather than for profit, and thus somehow be exempt from the effects of increasing returns to scale. Given the budget pressures these institutions are under, I'm skeptical. But lets assume that they are magically exempt.

The whole point of truly decentralized peer-to-peer systems is that they cannot be centrally managed; for example by a consortium of libraries. A system of this kind needs management that arises spontaneously by the effect of its built-in incentives on each individual participant. Among the functions that this spontaneous management needs to perform for a long-term storage service is to ensure that:
  • the storage resources needed to meet the demand are provided,
  • they are replaced as they fail or become obsolete,
  • each object is adequately replicated to ensure its long-term viability,
  • the replicas maintain suitable geographic and organizational diversity,
  • the software is maintained to fix the inevitable vulnerabilities,
and that the software is upgraded as the computing infrastructure evolves through time. Note that these are mostly requirements on the network as a whole rather than on individual peers. The SEC's report on Initial Coin Offerings recognizes similar needs:
Investors in The DAO reasonably expected Slock.it and its co-founders, and The DAO’s Curators, to provide significant managerial efforts after The DAO’s launch. The expertise of The DAO’s creators and Curators was critical in monitoring the operation of The DAO, safeguarding investor funds, and determining whether proposed contracts should be put for a vote. Investors had little choice but to rely on their expertise.

By contract and in reality, DAO Token holders relied on the significant managerial efforts provided by Slock.it and its co-founders, and The DAO’s Curators, as described above.
Even in the profit-driven world of crypto-currencies, the incentive from profit doesn't always lead to concensus (see the issue of increasing the Bitcoin block size, and the DAO heist), or to the provision of resources to meet the demand (see Bitcoin's backlog of unconfirmed transactions). Since we have assumed away the profit motive, and all we have left is a vague sense of the public interest, the built-in incentives powering the necessary functions will be weak.

This lack of effective governance is a problem in the short-term world of crypto-currency speculation (see the surplus GPUs flooding the market as Ethereum miners drop out). It is a disaster in digital preservation, where the requirement is to perform continuously and correctly over a time-scale of many technology generations. Human organizations can survive much longer time-scales; 8 years ago my University celebrated its 800-th birthday. Does anybody believe we'll be using Bitcoin or Ethereum 80 years from now as it celebrates its 888-th?

We have experience in these matters. Seventeen years ago we published the first paper describing the LOCKSS peer-to-peer digital preservation system. At the software level it was, and has remained through its subsequent evolution, a truly decentralized system. All peers are equal, no peer trusts any other, peers discover others through gossip-style communication. At the management and organizational level, however, formal structures arose such as the LOCKSS Alliance, the MetaArchive and the CLOCKSS Archive to meet real-world demand for the functions above to be performed in a reliable and timely fashion.

Trying by technical means to remove the need to have viable economics and governance is doomed to fail in the medium- let alone the long-term. What is needed is a solution to the economic and governance problems. Then a technology can be designed to work in that framework. Blockchain is a technology in search of a problem to solve, being pushed by ideology into areas where the unsolved problems are not technological.
          Initial Coin Offerings        
The FT's Alphaville blog has started a new series, called ICOmedy looking at the insanity surrounding Initial Coin Offerings (ICOs). The blockchain hype has created an even bigger opportunity to separate the fools from their money than the dot-com era did. To motivate you to follow the series, below the fold there are some extracts and related links.

So far the series includes:
  • ICOs and the money markets:
    how can you determine fair relative value or what the no-arbitrage condition for a multitude of crypto currencies should be if they bear no income potential whatsoever? They have no time value of money in the ordinary sense.

    If and when they do bear interest it is derived not from lending to a productive industry but to short sellers — and this is done at heterogeneous rates across varying exchanges and at varying risk. There is no uniform base lending rate. Everything is arbitrary. Worse than that, the lack of income equates the whole thing to a casino-style game of chance, with ongoing profits entirely dependent on ongoing capital inflows from external sources.
  • In the crypto world, you can get something for nothing:
    you have some cash, and I have a “token”. The token is worthless. It has no purpose or function. There’s a big label on the token that says, “this token cannot be used for anything”. And we exchange the two, and so I end up with your cash, and you end up with nothing, and for some reason you’re happy with the transaction. ... This is a pretty accurate description of an “initial coin offering” (ICO) that has raised $200m worth of cryptocurrency. The company behind it is called block.one ... In an earlier post, we likened an initial coin offering to a Kickstarter campaign. Investors hand over their money, and in return get some sort of access to the product when it’s finished. The access is granted by a token that can be used with the software being developed. Block.one’s initial coin offering is different. There’s a token, but it can’t actually be used for anything. This is from the FAQs:
    The EOS Tokens do not have any rights, uses, purpose, attributes, functionalities or features, express or implied, including, without limitation, any uses, purpose, attributes, functionalities or features on the EOS Platform.
    You might want to read that over a couple of times, keeping in mind that investors have spent over $200m buying these “EOS Tokens”.
  • From dot.comedy to ICOmedy…:
    mainstream media coverage of the crypto phenomenon has all focused on the similarities with the dotcom mania of the late 90s, which came to a head in the Spring of 2000. ... Sure, there was a mania, and stocks went to comical valuations, and thousands and thousands of people thought they had become overnight millionaires, only to discover they weren’t. Yes, it was tech-related and people were making fabulous predictions about how the world was going to change. ... But during the dotcom era it was clear that the world was changing, for real. Old skool, analogue businesses like Barnes & Noble were getting Amazon-ed. It was clear that all forms of business were already being revolutionised as the digital aged dawned. The trouble was that greed and a herd-like mentality sent the public markets potty for a time.

    The crypto craze is different. It has grown from fringe libertarian philosophy, preaching that any and all government is a bad thing, and that all our current systems where society is organised centrally will soon be replaced by loose ‘non-trusting’ digital networks and protocols that transcend the nation state. ... State sovereignty is not going to disappear. Democratic government is generally a good way for nations to organise their affairs. Dollars will buy you food and energy for the foreseeable.
  • What does a crypto startup do with $230m?:
    You’ve probably never heard of Tezos before. It’s a “new decentralized blockchain” that’s apparently better than all the other blockchains, and last week, it completed a $230m fundraising. ... If the sum of money raised was a guarantor of success, then Tezos would now be a sure bet. It’s the biggest ICO to-date. The platform is the brainchild of Kathleen and Arthur Breitman, who previously worked at Accenture and Goldman Sachs respectively. They have been developing it through their venture Dynamic Ledger Solutions since 2014 and if they can get the Tezos blockchain running for three months “substantially as described” in their marketing, they and the other investors in DLS like venture capitalist Tim Draper will make $20m.
    What they will do with nearly a quarter of a billion dollars isn't clear. Ideas include "Acquire mainstream print and TV media outlets to promote and defend the use of cryptographic ledger in society"!
Ether price
Leaving aside the daily multi-million dollar heists, of which last Sunday's was $8.4M from Veritaseum, there is the opinion of one of Ethereum's co-founders that the speculative frenzy in Initial Coin Offerings is dangerous:
Initial coin offerings, a means of crowdfunding for blockchain-technology companies, have caught so much attention that even the co-founder of the ethereum network, where many of these digital coins are built, says it’s time for things to cool down in a big way.

“People say ICOs are great for ethereum because, look at the price, but it’s a ticking time-bomb,” Charles Hoskinson, who helped develop ethereum, said in an interview. “There’s an over-tokenization of things as companies are issuing tokens when the same tasks can be achieved with existing blockchains. People are blinded by fast and easy money.”

Firms have raised $1.3 billion this year in digital coin sales, surpassing venture capital funding of blockchain companies and up more than six-fold from the total raised last year, according to Autonomous Research. Ether, the digital currency linked to the ethereum blockchain, surged from around $8 after its ICO at the start of the year to just under $400 last month. It’s since dropped by about 50 percent.
The frenzy around ICOs using Ethereum was so intense that it caused a worldwide shortage of GPUs, but:
Over the past few months, there has been a GPU shortage, forcing the prices of mid-range graphics cards up as cryptocurrency miners from across the world purchased hardware in bulk in search for quick and easy profits.

This has forced the prices of most modern AMD and certain Nvidia GPUs to skyrocket, but now these GPUs are starting to saturate the used market as more and more Ethereum miners sell up and quit mining. Some other miners are starting to look at other emerging Cryptocurrencies, though it is clear that the hype behind Ethereum is dying down.

Earlier this week Ethereum's value dropped below $200, as soon as the currency experienced a new difficulty spike, making the currency 20% harder to mine and significantly less profitable. This combined with its decrease in value has made mining Ethereum unprofitable for many miners, especially in regions with higher than average electricity costs.
As I write, it is back around $225. If you are minded to invest, the FT's Alphaville blog just announced a great opportunity.



          Is Decentralized Storage Sustainable?        
There are many reasons to dislike centralized storage services. They include business risk, as we see in le petit musée des projets Google abandonnés, monoculture vulnerability and rent extraction. There is thus naturally a lot of enthusiasm for decentralized storage systems, such as MaidSafe, DAT and IPFS. In 2013 I wrote about one of their advantages in Moving vs. Copying. Among the enthusiasts is Lambert Heller. Since I posted Blockchain as the Infrastructure for Science, Heller and I have been talking past each other. Heller is talking technology; I have some problems with the technology but they aren't that important. My main problem is an economic one that applies to decentralized storage irrespective of the details of the technology.

Below the fold is an attempt to clarify my argument. It is a re-statement of part of the argument in my 2014 post Economies of Scale in Peer-to-Peer Networks, specifically in the context of decentralized storage networks.

To make my argument I use a model of decentralized storage that abstracts away the details of the technology. The goal is a network with a large number of peers each providing storage services. This network is:
  • decentralized in the sense that no single entity, or small group of entities, controls the network (the peers are independently owned and operated), and
  • sustainable, in that the peers do not lose financially by providing storage services to the network.
I argue that this network is economically unstable and will, over time, become centralized. This argument is based on work from the 80s by the economist W. Brian Arthur1.

Let us start by supposing that such a decentralized storage network has, by magic, been created:
  • It consists of a large number of peers, initially all providing the same amount of storage resource to the network.
  • Users submit data to be stored to the network, not to individual peers. The network uses erasure coding to divide the data into shards and peers store shards.
  • Each peer incurs costs to supply this resource, in the form of hardware, bandwidth, power, cooling, space and staff time.
  • The network has no central organization which could contract with the peers to supply their resource. Instead, it rewards the peers in proportion to the resource they supply by a token, such as a crypto-currency, that the peers can convert into cash to cover their costs.
  • The users of the network rent space in the network by buying tokens for cash on an exchange, setting a market price at which peers can sell their tokens for cash. This market price sets the $/TB/month rent that users must pay, and that peers receive as income. It also ensure that users do not know which peers store their data.
Although the income each peer receives per unit of storage is the same, as set by the market, their costs differ. One might be in Silicon Valley, where space, power and staff time are expensive. Another might be in China, where all these inputs are cheap. So providing resources to the network is more profitable in China than in Silicon Valley.

Suppose the demand for storage is increasing. That demand will preferentially be supplied from China, where the capital invested in adding capacity can earn a greater reward. Thus peers in China will add capacity faster than those in Silicon Valley and will enjoy not merely a lower cost base because of location, but also a lower cost base from economies of scale. This will increase the cost differential driving the peers to China, and create a feedback process.

Competition among the peers and decreasing hardware costs will drive down the  $/TB/month rent to levels that are uneconomic for Silicon Valley peers, concentrating the storage resource in China (as we see with Bitcoin miners).

Lets assume that all the peers in China share the same low cost base. But some will have responded to the increase in demand before others. They will have better economies of scale than the laggards, so they will in turn grow at the laggards' expense. Growth may be by increasing the capacity of existing peers, or adding peers controlled by the entity with the economies of scale.

The result of this process is a network in which the aggregate storage resource is overwhelmingly controlled by a small number of entities, controlling large numbers of large peers in China. These are the ones which started with a cost base advantage and moved quickly to respond to demand. The network is no longer decentralized, and will suffer from the problems of centralized storage outlined above.

This should not be a surprise. We see the same winner-take-all behavior in most technology markets. We see this behavior in the Bitcoin network.

I believe it is up to the enthusiasts to explain why this model does not apply to their favorite decentralized storage technology, and thus why it won't become centralized. Or, alternatively, why they aren't worried that their decentralized storage network isn't actually decentralized after all.

References:

  1. Arthur, W. Brian. Competing technologies and lock-in by historical small events: the dynamics of allocation under increasing returns. Center for Economic Policy Research, Stanford University, 1985. in Arthur, W. Brian. Increasing Returns and Path Dependence in the Economy, Michigan University Press, 1994.

          Archive vs. Ransomware        
Archives perennially ask the question "how few copies can we get away with?"
This is a question I've blogged about in 2016 and 2011 and 2010, when I concluded:
  • The number of copies needed cannot be discussed except in the context of a specific threat model.
  • The important threats are not amenable to quantitative modeling.
  • Defense against the important threats requires many more copies than against the simple threats, to allow for the "anonymity of crowds".
I've also written before about the immensely profitable business of ransomware. Recent events, such as WannaCrypt, NotPetya and the details of NSA's ability to infect air-gapped computers should convince anyone that ransomware is a threat to which archives are exposed. Below the fold I look into how archives should be designed to resist this credible threat.

Background

Before looking at the range of defenses an archive could deploy, some background on the ransomware threat.

What Is Ransomware?

Ransomware is a class of malware which, once it infects a system, typically behaves as follows:
  • It searches the network for other systems to which it can spread, either because they have vulnerabilities the ransomware knows how to exploit, or because credentials for those systems are available on the infected system.
  • It encrypts all data writable by the infected system with a unique key, and reports the key and the system's ID to the ransomware's headquarters.
  • It informs the user that their data has been encrypted, and that the user can obtain a key to decrypt it by paying a ransom, typically in Bitcoin.
Some ransomware operations, Cerber is an example, have a sterling reputation for customer service, and if paid are highly likely to deliver a key that will permit recovery of the data. Others are less professional and, through bugs, incompetence, or a get-rich-quick business model may accept payment but be unable or unwilling to enable decryption. Of course, paying the ransom merely encourages the ransomware business, already worth by some estimates $75B/yr.

From the archive's point of view, ransomware is a similar threat to other forms of external or internal attacks, such as a disgruntled sysadmin, or a catastrophic operator error. The consequence of infection can be the total loss of all stored data. I'm just using ransomware as an example threat because it is timely and credible.

How Is Ransomware Delivered?

I've been asked "Archives don't have much money, so why would ransomware target one?" It is true that archives are less lucrative targets than FedEx, Maersk, SF Muni, Rosneft, WPP, the UK NHS and other recent victims of ransomware. But it is a misconception to think that ransomware is targeted at lucrative systems. For example, a nation might think that destroying the archive of another nation would be an appropriate way to express displeasure.

Like other forms of malware, ransomware is delivered not just by targeted means, such as phishing emails, but also by many different scattershot techniques including Web drive-bys, malicious advertising, compromised system updates, and in the case of WannaCry a network vulnerability. And, since recent ransomware exploits vulnerabilities from the NSA's vast hoard, it is exceptionally virulent. Once it gets a toehold in a network, it is likely to spread very rapidly.

Defenses

I now examine the various techniques for storing data to assess how well they defend against ransomware and related threats.

Single copy

Let us start by supposing that the archive has a single copy of the content in a filesystem on a disk. We don't need to invoke ransomware to know that this isn't safe. Failure of the disk will lose the entire archive; bit-rot affecting either or both of a file and its stored hash will corrupt that file.

Disk Mirror

One way to protect data is by directing each write to two identical disks, mirrors of each other. If one fails the data can be read from the other.

But when one fails the data is no longer protected, until the system is repaired. The safety of the data depends on the operator noticing the failure, replacing the failed disk, and copying the data from the good disk to the replacement before the good disk fails.

For well-administered systems the mean time to failure of a disk is long compared to the time between operators paying attention, so if disks failed randomly and independently it would be unlikely that the good disk would fail during repair. Alas, much field evidence shows that failures are significantly correlated. For example, raised temperatures caused by cooling system failure may cause disks to fail together.

Disk mirroring doesn't protect against ransomware; the writes the malware uses to encrypt the data get to both halves of the mirror.

Filesystem Backup

Another common technique is to synchronize a master copy with a slave copy in a different filesystem on a different disk. If there is a failure in the master, the system can fail-over, promoting the slave to be the new master and having the operator (eventually) create a new slave with which it can be synchronized.

Although this technique appears to provide two filesystems, the synchronization process ensures that corruption (or encryption by ransomware) of the master is rapidly propagated to the slave. Thus it provides no protection against bit-rot or ransomware. Further, because both the master and the slave filesystems are visible to (and writable by) the same system, once it is compromised both are at risk.

Network Backup

There are two ways data can be backed up over a network to a separate system, push and pull. In push backup, data is written to a network filesystem by the system being backed up. This is equivalent to backing up to a local filesystem. Ransomware can write to, so will encrypt, the data in the network filesystem.

Pull backup is better. The remote system has read access to the system being backed up, which has no write access to the network file system. Ransomware cannot immediately encrypt the backup, but the pull synchronization process will overwrite the backup with encrypted data unless it can be disabled in time.

Both mirroring and backup have a replication factor of two; they consume twice the storage of a single copy.

RAID

Disk mirroring is technically known as RAID 1. RAID N for N > 1 is a way to protect data from disk failures using a replication factor less than two. Disk blocks are organized as stripes of S blocks. Each stripe contains D data blocks and P parity blocks, where D+P=S. The data can be recovered from any D of the blocks, so the raid can survive P failures without losing data. For example, if D=4 and P=1, data is safe despite the loss of a single drive at a replication factor of 1.25.

RAID as such offers no protection against bit-rot. Some RAID systems provide the option of data scrubbing. If this is enabled, the RAID system uses a background task to identify individual bad blocks and repair them before they are detected as the result of a user read. Data scrubbing can prevent some forms of bit-rot, typically at the cost of some performance. Anecdotally it is rarely enabled.

But, since the content still appears in a single filesystem, any compromise of the system, for example by ransomware, risks total loss. As disk capacity has increased but disk transfer speed and the unrecoverable bit error rate (UBER) have not increased to match, the time needed after the operator has noticed a disk failure to fill the replacement disk and the size of the data transfer involved mean that single parity RAID (S-D=P=1) is no longer viable.

Erasure Coding

RAID is a form of erasure coding, but more advanced systems (such as IBM's Cleversafe) use erasure coding to spread the content across multiple systems in a network rather than multiple disks in a system. This can greatly reduce the correlation between media failures. Since the erasure-coded storage appears to applications as a filesystem, it provides no protection against ransomware or other application system compromises.

Two Independent Copies

Why is it that none of the approaches above defend against ransomware? The reason is that none provides independent replicas of the data. Each system has a single point from which the ransomware can encrypt all copies.

Suppose the archive maintains two independent copies, independent in the sense that they are separate in geographic, network and administrative terms. No-one has credentials allowing access to both copies. Although both copies may have been originally ingested from the same source, there is no place from which both copies can subsequently be written or deleted. Now the ransomware has to infect both replicas nearly simultaneously, before the operators notice and take the other replica off-line.

Three Independent Copies

Of themselves, 2 independent copies do not protect against more subtle corruption of the data than wholesale encryption. It is often assumed that storing hashes together with the data will permit detection of, and recovery from, corruption. But this is inadequate. As I wrote in SHA-1 is Dead:
There are two possible results from re-computing the hash of the content and comparing it with the stored hash:
  • The two hashes match, in which case either:
    • The hash and the content are unchanged, or
    • An attacker has changed both the content and the hash, or
    • An attacker has replaced the content with a collision, leaving the hash unchanged.
  • The two hashes differ, in which case:
    • The content has changed and the hash has not, or
    • The hash has changed and the content has not, or
    • Both content and hash have changed.
The stored hashes are made of exactly the same kind of bits as the content whose integrity they are to protect. The hash bits are subject to all the same threats as the content bits.
For example, if an attacker were to modify both the data and the hash on one of two replicas, the archive would be faced with two different versions each satisfying the hash check. Which is correct? With 3 independent copies, this can be decided by an election, with the replicas voting on which version is correct.

Alternatively, techniques based on entangling hashes in Merkle Trees can be used to determine which hash has been modified. These are related to, but vastly cheaper than, blockchain technologies for the same purpose. The problem is that the Merkle tree becomes a critical resource which must itself be preserved with multiple independent copies (making the necessary updates tricky). If ransomware could encrypt it the system would be unable to guarantee content integrity.

Four Independent Copies

If one of the three independent copies is unavailable, the voting process is unavailable. Four independent copies is the minimum number that ensure the system can survive an outage at one copy.

Lots of Independent Copies

Just as with disks, it turns out that outages among notionally independent copies are correlated. And that archives, unable to afford intensive staffing, are often slow to notice and respond to problems, lengthening the outages. Both make it more likely that more than one copy will be unavailable when needed to detect and recover from corruption.

Tape Backup

The traditional way to back up data was to a cycle of tapes. To over-simplify, say the cycle was weekly. Each day the data would be backed up to, and overwrite, the same day's tape from the previous week; a replication factor of 7 that was only affordable because tape was so cheap compared to disk. With this traditional approach ransomware would have to be a good deal cleverer. It would need to intercept the backups and encrypt them as they were written while delaying encryption of the disk itself for a whole backup cycle.

In practice things would be more complex. Writing to tape is slow, and tape is not that much cheaper than disk, so that complex cycles interleaving full and incremental backups are used. Generic ransomware would be unlikely to know the details, so would fail to destroy all the backups. But recovery would be a very slow and error-prone process, unlikely to recover all the data.

Write-Once Media Backup

One excellent way to defend against ransomware and many other threats (such as coronal mass ejections) is to back the data up to write-once optical media. Kestutis Patiejunas built such a system for Facebook, and it is in production use. But few if any archives operate at the scale needed to make these systems cost-effective.

How Does This Relate To LOCKSS?

Nothing in the foregoing is specific to the LOCKSS technology; it all applies to whatever technology an archive uses. The LOCKSS system was designed to cope with a broad range of threats, set out initially in a 2005 paper, and elaborated in detail for the 2014 TRAC audit of the CLOCKSS Archive. Although these threat models don't specifically call out ransomware, which wasn't much of a threat 3 years ago, they do include external attack, internal attack and operator error. All three have similar characteristics to ransomware.

Thus the LOCKSS Polling and Repair Protocol, the means by which peers in a LOCKSS network detect and repair damage such as encryption by ransomware, was designed to operate with at least 4 copies. Assuming that no copy is ever unavailable when needed is not realistic; as with any preservation technology 4 is the minimum for safety.

Our experience with operating peer-to-peer preservation networks of varying sizes in the LOCKSS Program led us to be comfortable with the ability of these networks with realistic levels of operator attention to detect damage to, and make timely repairs to, content provided they have 7 or more peers. As the number of peers decreases, the level of operator attention needed increases, so there is a trade-off between hardware and staff costs.
          Blockchain as the Infrastructure for Science? (updated)        
Herbert Van de Sompel pointed me to Lambert Heller's How P2P and blockchains make it easier to work with scientific objects – three hypotheses as an example of the persistent enthusiasm for these technologies as a way of communicating and preserving research, among other things. Another link from Herbert, Chris H. J. Hartgerink's Re-envisioning a future in scholarly communication from this year's IFLA conference, proposes something similar:
Distributing and decentralizing the scholarly communications system is achievable with peer-to-peer (p2p) Internet protocols such as dat and ipfs. Simply put, such p2p networks securely send information across a network of peers but are resilient to nodes being removed or adjusted because they operate in a mesh network. For example, if 20 peers have file X, removing one peer does not affect the availability of the file X. Only if all 20 are removed from the network, file X will become unavailable. Vice versa, if more peers on the network have file X, it is less likely that file X will become unavailable. As such, this would include unlimited redistribution in the scholarly communication system by default, instead of limited redistribution due to copyright as it is now.
I first expressed skepticism about this idea three years ago discussing a paper proposing a P2P storage infrastructure called Permacoin. It hasn't taken over the world. [Update: my fellow Sun Microsystems alum Radia Perlman has a broader skeptical look at blockchain technology. I've appended some details.]

I understand the theoretical advantages of peer-to-peer (P2P) technology. But after nearly two decades researching, designing, building, deploying and operating P2P systems I have learned a lot about how hard it is for these theoretical advantages actually to be obtained at scale, in the real world, for the long term. Below the fold, I try to apply these lessons.

For the purpose of this post I will stipulate that the implementations of both the P2P technology and the operating system on which it runs are flawless, and their design contains no vulnerabilities that the bad guys can exploit. Of course, in the real world there will be flaws and vulnerabilities, but discussing their effects on the system would distract from the message of this post.

Heller's three hypotheses are based on the idea of using a P2P storage infrastructure such as IPFS that names objects by their hash:
  • It would be better for researchers to allocate persistent object names than for digital archives to do so. There are a number of problems with this hypothesis. First, it doesn't describe the current situation accurately. Archives such as the Wayback Machine or LOCKSS try hard not to assign names to content they preserve, striving to ensure that it remains accessible via its originally assigned URL, DOI or metadata (such as OpenURL). Second, the names Heller suggests are not assigned by researchers, they are hashes computed from the content. Third, hashes are not persistent over the timescales needed because, as technology improves over time, it becomes possible to create "hash collisions", as we have seen recently with SHA1.
  • From name allocation plus archiving plus x as a “package solution” to an open market of modular services. Heller is correct to point out that:
    The mere allocation of a persistent name does not ensure the long-term accessibility of objects. This is also the case for a P2P file system such as IPFS. ... Since name allocation using IPFS or a blockchain is not necessarily linked to the guarantee of permanent availability, the latter must be offered as a separate service.
    The upside of using hashes as names would be that the existence and location of the archive would be invisible. The downside of using hashes as names is that the archive would be invisible, posing insurmountable business model difficulties for those trying to offer archiving services, and insurmountable management problems for those such as the Keeper's Registry who try to ensure that the objects that should be preserved actually are being preserved. There can't be a viable market in archiving services if the market participants and their products are indistinguishable and accessible freely to all. Especially not if the objects in question are academic papers, which are copyright works.
  • It is possible to make large volumes of data scientifically usable more easily without APIs and central hosts. In an ideal world in which both storage and bandwidth were infinite and free, storing all the world's scientific data in an IPFS-like P2P service backed up by multiple independent archive services would indeed make the data vastly more accessible, useful and persistent than it is now. But we don't live in an ideal world. If this P2P network is to be sustainable for the long term, the peers in the network need a viable business model, to pay for both storage and bandwidth. But they can't charge for access to the data, since that would destroy its usability. They can't charge the researchers for storing their data, since it is generated by research that is funded by term-limited grants. Especially in the current financial environment, they can't charge the researchers' institutions, because they have more immediate funding priorities than allowing other institutions' researchers to access the data in the future for free.
I have identified three major problems with Heller's proposal which also apply to Hartgerink's:
  • They would populate the Web with links to objects that, while initially unique, would over time become non-unique. That is, it would become possible for objects to be corrupted. When the links become vulnerable, they need to be replaced with better hashes. But there is no mechanism for doing so. This is not a theoretical concern, the BitTorrent protocol underlying IPFS has been shown to be vulnerable to SHA1 collisions.
  • The market envisaged, at least for archiving services, does not allow for viable business models, in that the market participants are indistinguishable.
  • Unlike Bitcoin, there is no mechanism for rewarding peers for providing services to the network.
None of these has anything to do with the functioning of the software system. Heller writes:
There is hope that we will see more innovative, reliable and reproducible services in the future, also provided by less privileged players; services that may turn out to be beneficial and inspirational to actors in the scientific community.
I don't agree, especially about "provided by less privileged players". Leave aside that the privileged players in the current system have proven very adept at countering efforts to invade their space, for example by buying up the invaders. There is a much more fundamental problem facing P2P systems.

Four months after the Permacoin post, inspired in part by Natasha Lomas' Techcrunch piece The Server Needs To Die To Save The Internet about the MaidSafe P2P storage network, I wrote Economies of Scale in Peer-to-Peer Networks. This is a detailed explanation of how the increasing returns to scale inherent to technologies in general (and networked systems in particular) affect P2P systems, making it inevitable that they will gradually lose their decentralized nature and the benefits that it provides, such as resistance to some important forms of attack.

Unconfirmed transactions
The history of Bitcoin shows this centralizing effect in practice. It also shows that, even when peers have a viable (if perhaps not sustainable) business model, based in Bitcoin's case on financial speculation, Chinese flight capital and crime such as ransomware, resources do not magically appear to satisfy demand.

As I write, about 100MB of transactions are waiting to be confirmed. A week and a half ago, Izabella Kaminska reported that there were over 200,000 transactions in the queue. At around 5 transaction/sec, that's around an 11-hour backlog. Right now, the number is about half that. How much less likely are resources to become available to satisfy demand if the peers lack a viable business model?

Because Bitcoin has a lot of peers and speculation has driven its value sky-high, it is easy to assume that it is a successful technology. Clearly, it is very successful along some axes. Along others, not so much. For example, Kaminska writes:
The views of one trader:
... This is the biggest problem with bitcoin, it’s not just that it’s expensive to transact, it’s uncertain to transact. It’s hard to know if you’ve put enough of a fee. So if you significantly over pay to get in, even then it’s not guaranteed. There are a lot of people who don’t know how to set their fees, and it takes hours to confirm transactions. It’s a bad system and no one has any solutions.
Transactions which fail to get the attention of miners sit in limbo until they drop out. But the suspended state leaves payers entirely helpless. They can’t risk resending the transaction, in case the original one does clear eventually. They can’t recall the original one either. Our source says he’s had a significant sized transaction waiting to be settled for two weeks.

The heart of the problem is game theoretical. Users may not know it but they’re participating in what amounts to a continuous blind auction.

Legacy fees can provide clues to what fees will get your transactions done — and websites are popping up which attempt to offer clarity on that front — but there’s no guarantee that the state of the last block is equivalent to the next one.
Source
Right now, if you want a median-sized transaction in the next block you're advised to bid nearly $3. The uncertainty is problematic for large transactions and the cost is prohibitive for small ones. Kaminska points out that the irony is:
given bitcoin’s decentralised and real-time settlement obsession, ... how the market structure has evolved to minimise the cost of transaction.

Traders, dealers, wallet and bitcoin payments services get around transaction settlement choke points and fees by netting transactions off-blockchain.

This over time has created a situation where the majority of small-scale payments are not processed on the bitcoin blockchain at all. To the contrary, intermediaries operate for the most part as trusted third parties settling netted sums as and when it becomes cost effective to do so. ... All of which proves bitcoin is anything but a cheap or competitive system. With great irony, it is turning into a premium service only cost effective for those who can’t — for some reason, ahem — use the official system.
There's no guarantee that the axes on which Bitcoin succeeded are those relevant to other blockchain uses; the ones on which it is failing may well be. Among the blockchain's most hyped attributes were the lack of a need for trust, and the lack of a single point of failure. Another of Kaminska's posts:
Coinbase has been intermittently down for at least two days.

With an unprecedented amount of leverage in the bitcoin and altcoin market, a runaway rally that doesn’t seem to know when to stop, the biggest exchange still not facilitating dollar withdrawals and incremental reports about other exchanges encountering service disruption, it could just be there’s more to this than first meets the eye.

(Remember from 2008 how liquidity issues tend to cause a spike in the currency that’s in hot demand?)
These problems illustrate the difficulty of actually providing the theoretical advantages of a P2P technology "at scale, in the real world, for the long term".

Update: In Blockchain: Hype or Hope? Radia Perlman provides a succinct overview of blockchain technology, asks what is novel about it, and argues that the only feature of the blockchain that cannot be provided at much lower cost by preexisting technology is:
a ledger agreed upon by consensus of thousands of anonymous entities, none of which can be held responsible or be shut down by some malevolent government
But, as she points out:
most applications would not require or even want this property. And, as demonstrated by the Bitcoin community's reaction to forks, there really are a few people in charge who can control the system
She doesn't point out that, in order to make money, the "thousands of ... entities" are forced to cooperate in pools, so that in practice the system isn't very decentralized, and the "anonymous entities" are much less anonymous than they would like to believe (see here and here).

Radia's article is a must-read corrective to the blockchain hype. Alas, although I have it in my print copy of Usenix ;login:, it doesn't appear to be on the Usenix website yet, and even when it is it will only be available to members for a year. I've made a note to post about it again when it is available.


          Another Class of Blockchain Vulnerabilities        
For at least three years I've been pointing out a fundamental problem with blockchain systems, and indeed peer-to-peer (P2P) systems in general, which is that maintaining their decentralized nature in the face of economies of scale (network effects, Metcalfe's Law, ...) is pretty close to impossible. I wrote a detailed analysis of this issue in Economies of Scale in Peer-to-Peer Networks. Centralized P2P systems, in which a significant minority (or in the case of Bitcoin an actual majority) can act in coordination perhaps because they are conspiring together, are vulnerable to many attacks. This was a theme of our SOSP "Best Paper" winner in 2003.

Now, Catalin Cimpanu at Bleeping Computer reports on research showing yet another way in which P2P networks can become vulnerable through centralization driven by economies of scale. Below the fold, some details.

Cimpanu writes:
the Bitcoin network, despite counting thousands of nodes, is largely hosted on a small number of ISPs (networks, Autonomous Systems — AS). For example, 13 ISPs host 30% of the entire Bitcoin network, while 39 ISPs host 50% of the whole Bitcoin mining power.

Furthermore, most of the traffic exchanged between Bitcoin nodes passes through a small number of ISPs. In exact numbers, just three ISPs handle 60% of all Bitcoin traffic, right now.
and this fact is being exploited via BGP hijacks:
Based on statistical data, researchers say they’ve found that around 100 Bitcoin nodes are the victims of BGP hijacks each month, with the largest number of BGP hijacks happening in November 2015, when 8% of the entire Bitcoin nodes (447 at the time) were the victims of such incidents.
The research is described in Hijacking Bitcoin: Routing Attacks on Cryptocurrencies by Maria Apostolaki, Aviv Zohar and Laurent Vanbever, who write:
While challenging, we show that two key properties make routing attacks practical: (i) the efficiency of routing manipulation; and (ii) the significant centralization of Bitcoin in terms of mining and routing. Specifically, we find that any network attacker can hijack few (<100) BGP prefixes to isolate ∼50% of the mining power — even when considering that mining pools are heavily multi-homed.
They show two classes of routing-based attacks on the Bitcoin network are feasible:
First, we evaluate the ability of attackers to isolate a set of nodes from the Bitcoin network, effectively partitioning it. Second, we evaluate the impact of delaying block propagation by manipulating a small number of key Bitcoin messages.
BGP (Border Gateway Protocol) is a long-standing vulnerability of the Internet, so it is not surprising that it can and is affecting the Bitcoin network. The more interesting part of their research is that it illuminates second-order effects of economies of scale on P2P networks. Economies of scale drove Bitcoin mining from home computers into large data centers. Economies of scale drove these data centers to be located in a few areas with very cheap power and cooling. Thus these data centers naturally used the few ISPs that served these areas, leading to centralization at the network level, and thus to vulnerabilities caused by centralization at the network level.
          Sony will use blockchain to beef up school cybersecurity        

The folks at Sony Education are worried that some schlubby kid that's gonna fail gym could hack their school and change their grade to a pass. It's why the company is teaming up with IBM to use blockchain to create a secure academic platform for storing records. The idea is that every scrap of data about your kids' schooling goes into a record that can then be stored securely. No kid, you gotta learn to climb that rope or else you can kiss that scholarship to Harvard goodbye.

Source: Sony


          The week in GRC: Libor to be phased out in 2021 and Finra appoints new top enforcer        

This week’s governance, compliance and risk-management stories from around the web

– The European Central Bank arranged a rescue of Banco Popular Español in June in the face of a run that left the lender close to collapse. But according to The Wall Street Journal, Banco Popular’s problems ran deeper, touching an area that has been difficult for European regulators to address: poor governance. Governance experts say the bank’s problems included board members who weren’t independent enough from management and deals with companies that had ties to the board.

Corporate governance shortcomings are more common at European banks than at their US counterparts, experts say. A Banco Popular spokesperson said Spain’s securities regulator reviewed and had no objection to the bank’s designation of board members as independent. A board member can be considered independent for up to 12 years under Spanish law, the spokesperson noted.


Bloomberg reported that a former UBS Group compliance officer and a day trader charged by UK regulator the Financial Conduct Authority (FCA) with making £1.4 million ($1.8 million) from insider trading pleaded not guilty in a London court. Fabiana Abdel-Malek and Walid Choucair entered the pleas at a hearing on Monday. They were accused by the FCA of committing five counts of insider dealing between June 2013 and June 2014. The FCA alleged Abdel-Malek obtained the information through her role at UBS. The trial has been scheduled for October 2018.


– US bank CEO pay is settling at more than twice the average pay of bank bosses in Europe, and shareholders are more determined than ever to prevent such US norms taking hold across the Atlantic, the Financial Times reported. ‘Investors are working very hard to contain what they perceive to be a US pay escalation from infecting other geographies,’ said John Roe, head of analytics at Institutional Shareholder Services (ISS). ‘At the behest of’ those investors, he said, ISS now excludes US companies from the ‘peer analysis’ it does to assess whether executives in Europe, Canada and Asia are being paid in line with industry norms. 


– Meanwhile, the WSJ noted that Trump administration regulators have signaled they want to abandon plans to further regulate pay on Wall Street, but that aspects of the Dodd-Frank Act and changes in the economics of the banking industry have already resulted in tougher compensation controls.

Portions of the Dodd-Frank mandate – including making pay more sensitive to risk and long-term results – are part of guidelines adopted by the Federal Reserve and other agencies. Regulators including the SEC recently dropped efforts to craft those tougher provisions from their published agendas. But big banks have moved to rein in pay, pressured by shareholders seeking higher dividends and stock buybacks, because they work under higher capital requirements that have pressured profitability and squeezed the amount of money available for compensation.


– German generic drug company Stada Arzneimittel said its board of directors had recommended that shareholders accept an improved takeover bid by private equity firms Bain Capital and Cinven, according to The New York Times. The deal, which valued Stada at $4.8 billion, came after a bid in June by Bain and Cinven was unable to get support from 75 percent of shareholders. The new offer has a lower threshold for acceptance of 63 percent. ‘The executive board has reached the conclusion that the current offer appropriately reflects both the enterprise value and the growth potential of Stada,’ said Engelbert Coster Tjeenk Willink, Stada’s CEO.


– The WSJ reported that Americans – reputed to be the most litigious people in the world – are filing fewer lawsuits. Fewer than two in 1,000 people claiming to be victims of inattentive motorists, medical malpractice, faulty products and other civil wrongs filed tort lawsuits in 2015, down sharply from 1993, when roughly 10 in every 1,000 Americans filed such suits. A range of factors are fueling the decline, including state restrictions on litigation, the increasing cost of bringing suits, improved auto safety and a long campaign by businesses to turn public opinion against plaintiffs and their lawyers.


– The SEC announced that Bryan Wood had been named director of the agency’s office of legislative and intergovernmental affairs. He will advise SEC chair Jay Clayton, commissioners and the SEC staff on legislative matters, provide technical assistance on securities-related legislation to Congressional committees and staff, assist in preparing SEC testimony for Congressional hearings, and co-ordinate with other government entities. Wood spent 10 years on Capitol Hill, most recently as senior adviser and counsel at the House Financial Services Committee.


– Bitcoin options exchange LedgerX won approval from the Commodity Futures Trading Commission (CFTC) to clear bitcoin options, making it the first US federally regulated platform of its kind, the WSJ said. The venue will allow traders to place options bets on virtual currencies, which have recently posted some of the wildest swings across global markets. LedgerX, which plans to launch in the fall, will offer institutional investors bitcoin puts and calls, contracts that allow them to sell or buy, respectively, at designated prices.


– The SEC issued a report warning that offers and sales of digital assets by ‘virtual’ organizations are subject to the requirements of the federal securities laws. Such offers and sales, conducted by organizations using distributed ledger or blockchain technology, have been referred to as, among other things, ‘initial coin offerings’ or ‘token sales’. Whether a particular investment transaction involves the offer or sale of a security, regardless of the terminology or technology used, will depend on the facts and circumstances, including the economic realities of the transaction.


Bloomberg reported that the FCA issued proposals for ensuring senior staff of financial services firms can be held to account for misconduct on their watch, extending rules already in place for banks to almost all firms. The FCA proposed applying five conduct rules to all staff at firms it supervises. It will also demand that senior managers’ responsibilities are clearly set out so that they can be held responsible for their own and their staff’s actions. The proposals follow a 2015 decision by HM Treasury to apply the rules to all sectors of the industry.

‘This is about individuals, not just institutions,’ said Jonathan Davidson, executive director of supervision for retail and authorizations at the FCA. ‘The new conduct rules will ensure individuals in financial services are held to high standards, and that consumers know what is required of the individuals they deal with.’


– Republican SEC commission member Michael Piwowar urged the US Department of Labor to scrap its fiduciary rule for brokers offering retirement advice, saying it was misguided, Reuters reported. In a comment letter to department, Piwowar said the rule could harm the broker-client relationship. The rule, which has been partly implemented and was proposed during the Obama administration, has been championed by consumer advocates and retirement non-profits. Piwowar said the rule was too dismissive of the important role that disclosures required by the SEC can play in helping guard against conflicts of interest.


– The WSJ said shareholders of SL Green Realty this year for the first time rejected the office building landlord’s 2016 compensation, saying it was too generous and wasn’t sufficiently aligned with investors’ interests. In a non-binding say-on-pay vote in June, investors rejected the company’s 2016 compensation package. SL Green was one of several real estate investment trusts (REITs) in the recently ended proxy season that had their executive pay rejected, marking an unusually strong rebuke of a sector that is generally lauded for its compensation practices.

The chair of SL Green’s compensation committee, John Alschuler, said management was disappointed by the outcome and takes the opinion of its shareholders very seriously. Alschuler said SL Green is a ‘frugal company’ given that its total overhead costs are low compared with comparable REITs.


– FCA chief executive Andrew Bailey has called for the London Interbank Offer Rate (Libor) to be phased out in 2021 and replaced by more reliable alternatives, according to the FT. Bailey said Libor was unable to fulfil its objective of measuring the price banks pay to borrow from each other because this activity has fallen so sharply since the financial crisis. He noted that there had been major governance improvements by the banks that submit rates to create Libor and there was no evidence of fresh wrongdoing. But he added that the present situation was unsustainable.


– State Street Global Advisors pledged in March to throw its weight behind the issue of gender diversity on boards this year, the WSJ noted. The firm found 468 US companies it owns shares in lacked a single female board member, but of that group roughly 400 companies failed to address gender diversity in any meaningful way. The firm then voted against the re-election of directors charged with nominating new board members at each of these companies.

‘The fact that you have more than 400 companies was surprising to me,’ said Rakhi Kumar, head of asset stewardship at State Street Global Advisors, referencing the almost 470 companies that lacked a female board member. Boards have been slow to add women for various reasons, including their infrequent turnover and preference for experienced CEOs. But there has also been pressure from big institutional investors.


– The SEC said Jessica Magee was named associate regional director for enforcement in the agency’s Fort Worth regional office. She succeeds David Peavler, who left the SEC in May. Magee joined the SEC as a staff attorney in the enforcement division in 2010. She became senior trial counsel in 2012, was promoted to assistant regional director in 2015 and became regional trial counsel in 2016.

– The Financial Industry Regulatory Authority (Finra) promoted Susan Schroeder to executive vice president and head of enforcement. In addition, Finra said it plans to consolidate its existing enforcement functions into a new, unified enforcement group led by Schroeder, as a result of the self-regulatory organization’s self-evaluation and improvement initiative.

The new unit will bring together two distinct enforcement teams within the organization. One will handle disciplinary actions related to trading-based matters found through the market regulation division’s surveillance and examination programs, and the other will handle cases referred by other regulatory oversight divisions including member regulation, corporate financing, the office of fraud detection and market intelligence, and advertising regulation. Schroeder has been acting head of enforcement since the departure of Brad Bennett earlier this year.


– Procter & Gamble (P&G) sparred with activist investor Nelson Peltz, according to the WSJ, with the two sides debating whether the company’s latest results prove a turnaround is taking hold. P&G executives argued that the company’s higher profit and sales showed progress on efforts to cut costs and refocus on its biggest brands, building their case against Peltz’s demand for a board seat.

But Peltz’s Trian Fund Management issued a statement saying the company continues to lose market share and is saddled with ‘excessive costs and bureaucracy.’ P&G CEO David Taylor said he would listen to Peltz but there was no reason to revisit the company’s strategy or give the activist a board seat.


– Randal Quarles, President Donald Trump’s pick to become the Federal Reserve’s point person on financial regulation, told lawmakers he would support changes to the central bank’s stress tests for big banks, the WSJ reported. At his confirmation hearing before the Senate Banking Committee, Quarles criticized ‘the lack of transparency that has surrounded’ the annual tests, which have become the key regulatory hurdle large US banks face.


Reuters reported that Halliburton will pay $29.2 million to settle civil charges that it violated Foreign Corrupt Practices Act (FCPA) rules related to books, recordkeeping and internal accounting controls while doing business in Angola. The SEC said Halliburton’s former vice president, Jeannot Lorenz, separately agreed to pay a $75,000 penalty in connection with the alleged violations. Both the company and Lorenz settled without admitting or denying wrongdoing. Halliburton said the US Department of Justice (DoJ) had also investigated the matter and was planning to close it out without filing related criminal charges.

The investigation began after the company received an anonymous allegation about possible FCPA violations in December 2010. The company said it ‘promptly’ reported the tip about possible corruption to the DoJ, conducted its own internal investigation and co-operated with the government. A lawyer for Lorenz could not be reached immediately for comment.


– The WSJ said the three nominees to join the CFTC promised to complete a long-delayed rule on position limits in derivative markets, although the two Republicans and one Democrat disagreed on the specifics. The Republican nominees both argued in favor of robust exemptions to any rule. The nominees – Republicans Dawn Stump and Brian Quintenz and Democrat Russ Behnam – received little pushback from members of the Senate Agriculture Committee at the hearing, and the committee’s top Republican and Democrat said they were eager to move quickly to confirm the nominees and restore the commission to full strength.


          $200 Million In 60 Minutes: Filecoin ICO Rockets to Record Amid Tech Issues        
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          Russia's Ministry of Health Is Launching a Blockchain Pilot        
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          $100 Million: Coinbase Raises Biggest-Ever Round for Bitcoin Startup        
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          Coco Revealed: Microsoft, JPMorgan & More Demo Blockchain-Boosting Tech        
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          Medical Society of Delaware Tests Blockchain to Improve Healthcare Access        
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          Illinois to Trial Blockchain Tech in Bid to Track Medical Licenses        
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          SegWit in the Wild: 4 Lessons Bitcoin Can Learn from Litecoin        
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          Hyperledger Blockchain Project to Elect New Technical Committee        
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          Weekly Commentary: Five Years of Whatever It Takes        
July 25 – Bloomberg (Paul Gordon and Carolynn Look): “Five years ago today, Mario Draghi was talking about bumblebees. The European Central Bank president’s speech in London on July 26, 2012, became instantly famous because of his pledge to do ‘whatever it takes’ to save the euro. But for all the power and clarity of that phrase, he started his remarks more obliquely. ‘The euro is like a bumblebee. This is a mystery of nature because it shouldn’t fly but instead it does. So the euro was a bumblebee that flew very well for several years. And now -- and I think people ask ‘how come?’-- probably there was something in the atmosphere, in the air, that made the bumblebee fly. Now something must have changed in the air, and we know what after the financial crisis.’ At the time, the currency bloc was being buffeted by soaring bond yields in peripheral nations as speculators bet the union’s fundamental flaws would rip it apart. Draghi’s answer was to state unequivocally that the immediate crisis fell under the ECB’s responsibility and he would deal with it. ‘The ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.’ That pledge was followed by a program to buy the debt of stressed countries in return for structural reforms, and in that respect the words alone proved to be enough. Yield spreads collapsed even though the program has never been tapped.”

This week marks the five-year anniversary of Draghi’s “whatever it takes.” I remember the summer of 2012 as if it were yesterday. From the Bubble analysis perspective, it was a Critical Juncture – for financial markets and risk perceptions, for policy and for the global economy. Italian 10-year yields hit 6.60% on July 24, 2012. On that same day, Spain saw yields surge to 7.62%. Italian banks were in freefall, while European bank stocks (STOXX600) were rapidly approaching 2009 lows. Having risen above 55 in 2011, Deutsche Bank traded at 23.23 on July 25, 2012.

It was my view at the time that the “European” crisis posed a clear and immediate threat to the global financial system. A crisis of confidence in Italian debt (and Spanish and “periphery” debt) risked a crisis of confidence in European banks – and a loss of confidence in European finance risked dismantling the euro monetary regime.

Derivatives markets were in the crosshairs back in 2012. A crisis of confidence in European debt and the euro would surely have tested the derivatives marketplace to the limits. Moreover, with the big European banks having evolved into dominant players in derivatives trading (taking share from U.S. counterparts after the mortgage crisis), counter-party issues were at the brink of becoming a serious global market problem. It’s as well worth mentioning that European banks were major providers of finance for emerging markets.

From the global government finance Bubble perspective, Draghi’s “whatever it takes” was a seminal development. The Bernanke Fed employed QE measures during the 2008 financial crisis to accommodate deleveraging and stabilize dislocated markets. Mario Draghi leapfrogged (helicopter) Bernanke, turning to open-ended QE and other extreme measures to preserve euro monetary integration. No longer would QE be viewed as a temporary crisis management tool. And just completely disregard traditional monetary axiom that central banks should operate as lender of last resort in the event of temporary illiquidity – but must avoid propping up the insolvent. “Whatever it takes” advocates covert bailouts for whomever and whatever a small group of central bankers chooses – illiquid, insolvent, irredeemable or otherwise. Now five years after the first utterance of “whatever it takes,” the Draghi ECB is still pumping out enormous amounts of “money” on a monthly basis (buying sovereigns and corporates) with rates near zero.

Keep in mind that while “whatever it takes” first radiated from Draghi’s lips, markets soon surmised that the ECB president was speaking on behalf of the cadre of leading global central bankers. After all, ECB (desperate) measures were followed promptly by the return of QE by the Federal Reserve, the Bank of Japan, the Swiss National Bank and others. It’s worth mentioning that the Fed’s balance sheet totaled about $2.8 TN in July 2012, only to rise to $4.4 TN by September 2014. Amazingly, Bank of Japan assets have expanded about three-fold since 2012 to approach $5.0 TN.

Going back to 2002, the burst “tech” Bubble was evolving into a full-fledged U.S. corporate debt crisis. Back then Fed governor Bernanke’s talk of “helicopter money” and the “government printing press” profoundly altered market dynamics. It may not have at the time been loud and clear. But putting markets on notice that the Fed was contemplating extraordinary reflationary measures was a far-reaching development for corporate debt. Facing a liquidity crisis in 2002, Ford bonds had become a popular short in the marketplace. Almost single-handedly, Dr. Bernanke’s speeches proved a catalyst for the speculating community reversing the Ford (and corporate debt) bond short - and then going long. The impact on general market liquidity was profound. And with the corporate debt crisis resolved there was nothing to hold back the burgeoning mortgage finance Bubble.

What “Helicopter Ben” accomplished with U.S. corporate bonds, “Super Mario” surpassed with Trillions of European sovereign, corporate and financial debt. Italian bond yields ended 2012 at 4.5%, down 210 bps from July highs. Spain’s 10-yields declined about 250 bps to 5.00% in less than six months. “Whatever it takes” almost immediately transformed Italian and Spanish debt from favored shorts to about the most enticing speculative long securities anywhere in the world.

Draghi’s utterance ‘The ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough,’ was a direct declaration to speculators with short positions in the euro currency, along with shorts in Italian, Spanish and periphery debt. Immediately Cover Your Shorts and Go Long. Five years on, Italian yields hover around 2.10% and Spanish yields sit at about 1.50% - emblematic of arguably one of history’s most spectacular securities market mispricings. European bank stocks have gained better than 50%. Draghi not only bloodied the shorts, be ensured spectacular profits for those levered long European debt – and the riskier the Credit the greater the reward.

Central bankers should not be in the business of playing favorites in the markets. So how did it get to the point where they seek to incentivize longs (levered and otherwise) while routinely punishing the shorts? Because central bankers followed the Bernanke Fed into a policy course of using rising securities and asset prices as a reflationary mechanism for the overall economy. As we’ve witnessed now for going on a decade, that’s a slippery slope. Adopt pro-Bubble policies and there will be no turning back. Inflate an epic Bubble and you own it for the duration.

“The euro is like a bumblebee. This is a mystery of nature because it shouldn’t fly but instead it does.” The euro flew and it soared incredibly high, trading above 1.50 to the dollar in early-2008. As fundamentally flawed as the euro monetary experiment has been, it has been buoyed by the fundamentally weaker dollar. The euro flew on the back of highly speculative flows, much of it flowing from an overcharged U.S. Credit system.  U.S. monetary policy had been too loose for too long. Unstable finance has been nurtured for what seems like an eternity. The U.S. exported its Credit Bubble to the world.

Going all the way back to the late-nineties, Italy and the European periphery were a leveraged speculator community darling. Indeed, the Euro Convergence Trade granted huge profits to the hedge fund community. The egregious amounts of leverage employed (directly and through derivatives) was illuminated with the 1998 implosion of Long-Term Capital Management (LTCM).

The LTCM fiasco contributed to an 18-month bear market that saw the euro trade down to 0.87 vs. the dollar in early 2002. With Dr. Bernanke and his radical theories on reflationary policymaking arriving on the scene in 2002, it’s no coincidence that the euro then embarked on a multiyear rally. The euro traded up to 1.00 late in 2002, 1.20 in 2003, 1.35 in 2004, 1.45 in 2007 and 1.58 in 2008. It’s furthermore no coincidence that Italian bond prices tracked the euro higher. After trading at 5.5% in the first-half of 2002, Italian yields dropped to 3.22% by October 2005. Greek bonds followed an almost identical trajectory, as both already highly-indebted nations took full advantage of the market’s insatiable demand for European peripheral debt.

Draghi has lately grown accustomed to patting himself on the back. He saved the euro. He saved Europe’s big banks. He kept Greece and Italy in the euro currency. His policies have spurred European economic recovery. But Draghi and global central bankers also inflated history’s greatest speculative Bubble. Celebration will be in order only if policies can be normalized without the whole thing coming crashing down.

July 25 – BloombergBusinessweek (Jana Randow): “Euro-area governments have saved almost 1 trillion euros ($1.16 trillion) in interest payments since 2008 as record-low European Central Bank rates depress bond yields at a time when state treasurers are also reducing debt. That’s according to calculations by Germany’s Bundesbank, which is urging finance ministers in the 19-nation region to make provisions for when interest rates start to rise. Italy, the world’s third-most indebted country, has benefited most, with savings exceeding 10% of gross domestic product.”

Italy has been the biggest beneficiary of collapsing market yields. The problem is that its debt load still expanded to a distressing 130% of GDP. Italy remains only a jump in yields away from trouble, and I suspect this helps explain why Draghi has been so reticent to pull back on the stimulus throttle. After trading below 1.90% in mid-June, Italian yields surged to 2.33% earlier this month as markets began to contemplate global central bankers moving toward concerted normalization.

The FOMC this week confirmed the dovishness of Yellen’s testimony before congress. Apparently, over the past month Fed rate “normalization” has been scaled back to perhaps one more hike this year – and that could be about it. And I just don’t buy the Fed’s recent fixation on below target inflation (GSCI Commodities Index up 4.2% this week on further dollar weakness!).

Something has raised concerns at the FOMC. Could it be European debt markets, with ECB stimulus to be significantly reduced in the months ahead. Or perhaps it’s China and Beijing's determination to rein in some financial excess. EM and all their dollar-denominated debt? Maybe a dysfunctional Washington has supplanted international developments on the worry list – or, understandably, it could be a combination of things.

At least for the week, global markets lost a bit of their recent swagger. While Boeing helped push the Dow to yet another record high, the S&P500 ended the week little changed. The broader market underperformed. The highflying technology stocks were unimpressive in the face of generally robust earnings. The VIX rose to 10.29, with some volatility beginning to seep into stock trading. Commodities caught a big bid, while bond yields began moving north again. The currencies remain unsettled.

Thinking back five years, U.S. markets at the time were incredibly complacent. The risk of crisis in Europe was downplayed: Policymakers had it all under control. Sometime later, the Financial Times - in a fascinating behind-the-scenes exposé - confirmed the gravity of the situation and how frazzled European leaders were at the brink of losing control. Yet central bankers, once again, saved the day – further solidifying their superhero status.

I’m convinced five years of “whatever it takes” took the global government finance Bubble deeper into perilous uncharted territory. Certainly, markets are more complacent than ever, believing central bankers are fully committed to prolonging indefinitely the securities bull market. Meanwhile, leverage, speculative excess and trend-following flows have had an additional five years to accumulate. Market distortions – including valuations, deeply embedded complacency, and Trillions of perceived safe securities – have become only further detached from reality. And the longer all this unstable finance flows freely into the real economy, the deeper the structural maladjustment.


For the Week:

The S&P500 was about unchanged (up 10.4% y-t-d), while the Dow jumped 1.2% (up 10.5%). The Utilities slipped 0.3% (up 8.4%). The Banks added 0.5% (up 3.7%), and the Broker/Dealers rose 1.0% (up 14.0%). The Transports dropped 2.6% (up 2.0%). The S&P 400 Midcaps declined 0.7% (up 6.1%), and the small cap Russell 2000 dipped 0.5% (up 5.3%). The Nasdaq100 slipped 0.2% (up 21.5%), and the Morgan Stanley High Tech index fell 0.8% (up 25.5%). The Semiconductors dropped 1.3% (up 20.6%). The Biotechs declined 1.0% (up 29.7%). With bullion up $15, the HUI gold index rallied 2.3% (up 7.7%).

Three-month Treasury bill rates ended the week at 106 bps. Two-year government yields added a basis point to 1.35% (up 16bps y-t-d). Five-year T-note yields increased three bps to 1.83% (down 9bps). Ten-year Treasury yields rose five bps to 2.29% (down 16bps). Long bond yields jumped nine bps to 2.90% (down 17bps).

Greek 10-year yields rose 11 bps to 5.33% (down 170bps y-t-d). Ten-year Portuguese yields added two bps to 2.93% (down 82bps). Italian 10-year yields gained five bps to 2.12% (up 31bps). Spain's 10-year yields rose seven bps to 1.53% (up 15bps). German bund yields increased four bps to 0.54% (up 34bps). French yields rose five bps to 0.81% (up 13bps). The French to German 10-year bond spread widened one to 27 bps. U.K. 10-year gilt yields gained four bps to 1.22% (down 2bps). U.K.'s FTSE equities index fell 1.1% (up 3.2%).

Japan's Nikkei 225 equities index declined 0.7% (up 4.4% y-t-d). Japanese 10-year "JGB" yields added a basis point to 0.08% (up 4bps). France's CAC40 gained 0.3% (up 5.5%). The German DAX equities index declined 0.6% (up 5.9%). Spain's IBEX 35 equities index rallied 1.1% (up 12.7%). Italy's FTSE MIB index rose 1.1% (up 11.4%). EM equities were mixed. Brazil's Bovespa index gained 1.3% (up 8.7%), while Mexico's Bolsa declined 0.7% (up 12.2%). South Korea's Kospi sank 2.0% (up 18.5%). India’s Sensex equities index added 0.9% (up 21.3%). China’s Shanghai Exchange increased 0.5% (up 4.8%). Turkey's Borsa Istanbul National 100 index rose 0.8% (up 37.8%). Russia's MICEX equities index slipped 0.4% (down 14.2%).

Junk bond mutual funds saw outflows of $21 million (from Lipper).

Freddie Mac 30-year fixed mortgage rates declined four bps to 3.92% (up 44bps y-o-y). Fifteen-year rates slipped three bps to 3.20% (up 42bps). The five-year hybrid ARM rate fell three bps to 3.18% (up 40bps). Bankrate's survey of jumbo mortgage borrowing costs had 30-yr fixed rates up five bps to 4.11% (up 42bps).

Federal Reserve Credit last week declined $5.1bn to $4.435 TN. Over the past year, Fed Credit added $0.4bn. Fed Credit inflated $1.625 TN, or 58%, over the past 246 weeks. Elsewhere, Fed holdings for foreign owners of Treasury, Agency Debt rose $6.0bn last week to $3.325 TN. "Custody holdings" were up $105bn y-o-y, or 3.3%.

M2 (narrow) "money" supply last week gained $6.0bn to a record $13.608 TN. "Narrow money" expanded $740bn, or 5.8%, over the past year. For the week, Currency increased $2.7bn. Total Checkable Deposits dropped $50.2bn, while Savings Deposits jumped $52.1bn. Small Time Deposits added $1.3bn. Retail Money Funds were little changed.

Total money market fund assets jumped $23.28bn to $2.640 TN. Money Funds fell $75bn y-o-y (2.8%).

Total Commercial Paper gained $7.4bn to $978bn. CP declined $49bn y-o-y, or 4.7%.

Currency Watch:

The U.S. dollar index declined 0.6% to 93.26 (down 8.9% y-t-d). For the week on the upside, the Swedish krona increased 1.5%, the Norwegian krone 1.3%, the British pound 1.1%, the Australian dollar 0.9%, the Canadian dollar 0.9%, the New Zealand dollar 0.8%, the euro 0.8%, the Singapore dollar 0.4%, the Japanese yen 0.4% and the Brazilian real 0.4%. On the downside, the Swiss franc declined 2.4%, the South African rand 0.8%, the Mexican peso 0.7% and the South Korean won 0.3%. The Chinese renminbi gained 0.44% versus the dollar this week (up 3.09% y-t-d).

Commodities Watch:

The Goldman Sachs Commodities Index jumped 4.2% (down 3.0% y-t-d). Spot Gold gained 1.2% to $1,270 (up 10.2%). Silver rose 1.4% to $16.695 (up 4.5%). Crude surged $3.94 to $49.71 (down 8%). Gasoline surged 7.2% (unchanged), while Natural Gas declined 1.0% (down 21%). Copper jumped 5.6% (up 15%). Wheat dropped 3.7% (up 18%). Corn fell 1.4% (up 10%).

Trump Administration Watch:

July 27 – Bloomberg (Sahil Kapur and Erik Wasson): “The House is set to leave for its August recess without having taken the first essential step to overhauling the U.S. tax code: agreeing on a 2018 budget resolution. Disputes among House Republicans over spending levels and the controversial border-adjusted tax proposal are preventing Speaker Paul Ryan from winning enough support to schedule a floor vote on the budget that a House panel approved last week. With House members planning to leave Washington Friday for a five-week recess, the lack of a budget is raising doubts that a tax rewrite -- one of President Donald Trump’s top priorities -- can get done this year, or even before the 2018 elections. ‘Clearly, no budget, no tax reform,’ said the House’s chief tax writer, Representative Kevin Brady, a Texas Republican.”

July 25 – Bloomberg (Erik Wasson and Roxana Tiron): “House Republicans this week are increasing the possibility of a government shutdown in October by moving forward with a $788 billion spending bill that complies with President Donald Trump’s demands to boost the military, reduce clean-energy programs and fund a wall on the U.S.-Mexico border. Those priorities, especially $1.6 billion in wall funding, guarantee House and Senate Democratic leaders will oppose the bill. Trump has urged his Republican supporters in Congress to fight, saying in May that a ‘good’ shutdown may be needed to advance his agenda. Republicans are trying to demonstrate unity after months of division over major legislation, including a repeal of Obamacare.”

July 24 – Bloomberg (Alex Harris): “The Treasury Department got a clear message from investors that they’re starting to get concerned another showdown over the U.S. debt ceiling may get ugly. The government’s auction Monday of $39 billion of three-month bills attracted the lowest demand of any other sale of the securities since June 2009. The bills, which mature around when the Treasury is estimated to run out of money unless lawmakers agree to extend the statutory limit on the nation’s borrowing, were sold at a rate of 1.18%, the highest since October 2008.”

July 27 – Bloomberg (Margaret Talev): “White House chief strategist Steve Bannon supports paying for middle-class tax cuts with a new top rate of 44% for Americans who make more than $5 million a year, according to a person familiar… It’s unclear whether President Donald Trump would support the move, which would bring the top rate, currently 39.6%, to the highest level in 30 years. Trump has said he’s focused on tax changes that would help the middle class, but an analysis this month of the tax outline the White House released in April shows it would mostly benefit top earners.”

July 25 – Reuters (John Benny): “A final decision on a steel trade policy may have to wait until other top-priority issues on his agenda get addressed, U.S. President Donald Trump told the Wall Street Journal… The administration would take time in making a decision on whether to block steel imports… Trump had previously initiated a 'Section 232' review of the U.S. steel industry that allows for the imposition of tariffs or quotas on imports if they are found to threaten national security. The law, which has been used twice before - to investigate oil in 1999 and iron and steel in 2001 - allows the president to impose restrictions on imports for reasons of national security.”

China Bubble Watch:

July 23 – New York Times (Keith Bradsher and Sui-Lee Wee): “Let the West worry about so-called black swans, rare and unexpected events that can upset financial markets. China is more concerned about ‘gray rhinos’ — large and visible problems in the economy that are ignored until they start moving fast. The rhinos are a herd of Chinese tycoons who have used a combination of political connections and raw ambition to create sprawling global conglomerates. Companies like Anbang Insurance Group, Fosun International, HNA Group and Dalian Wanda Group have feasted on cheap debt provided by state banks, spending lavishly to build their empires. Such players are now so big, so complex, so indebted and so enmeshed in the economy that the Chinese government is abruptly bringing them to heel. President Xi Jinping recently warned that financial stability is crucial to national security, while the official newspaper of the Communist Party pointed to the dangers of a ‘gray rhinoceros,’ without naming specific companies.”

July 24 – New York Times (David Barboza): “The acquisitive Chinese conglomerate HNA Group moved to allay concerns about its ownership structure… by releasing a statement showing that its biggest shareholder had recently shifted from a mysterious businessman to a foundation it set up in New York. The company said that its largest shareholder, a private businessman in China named Guan Jun, had recently donated his 30% stake in the company to HNA’s charitable organization, the Hainan Cihang Charity Foundation. Combined with the 22.8% stake held by HNA’s sister charity in China, HNA says it is now 52% owned by the Cihang foundations.”

July 23 – Bloomberg: “Several Chinese banks that helped fund HNA Group Co.’s global acquisition spree are losing their appetite for financing the company, according to people familiar with the matter. Three of the banks have decided to stop extending new loans to HNA, said the people… One made the decision early this year, the second acted a couple of months ago and the third moved recently, the people said. A fourth bank trimmed its exposure to the company over the past few months and reduced the size of a credit line, one of the people said, without providing further details.”

July 25 – Bloomberg (Laurence Arnold and Prudence Ho): “For a company regularly in the news for its frequent and wide-ranging acquisitions, China’s HNA Group Co. remains shrouded in mystery. Chinese and American government officials are seeking more information about the company’s ownership -- though for very different reasons -- and the European Central Bank may open a review of its own. Once a little-known airline operator, the company took on billions of dollars in debt as it made more than $40 billion of acquisitions over six continents since the start of 2016. With interests in tourism, logistics and financial services, it’s now the biggest shareholder of such well-known names as Hilton Worldwide Holdings Inc. and Deutsche Bank AG.”

July 23 – Wall Street Journal (Lingling Wei and Chao Deng): “China’s government reined in one of its brashest conglomerates with the approval of President Xi Jinping, according to people with knowledge of the action—a mark that the broader government clampdown on large private companies comes right from the top of China’s leadership. The measures, with President Xi’s previously unreported approval last month, bar state-owned banks from making new loans to property giant Dalian Wanda Group to help fuel its foreign expansion. The cutoff in bank financing for the company’s foreign investments highlights Beijing’s changing view of a series of Wanda’s recent overseas acquisitions as irrational and overpriced, these people say.”

July 22 – New York Times (Paul Mozur and Carolyn Zhang): “Facebook is the world’s largest social network, with more than two billion users. LinkedIn was sold to Microsoft for $26 billion last year. And Apple is Apple, the most valuable company in the world. In most local markets, it would be a surprise if any one of these companies were floundering. But in China, the real shock is that their troubles no longer surprise anyone. Just in the past few weeks, Facebook had one of its most popular apps blocked by the Chinese government. LinkedIn… had its local boss step down amid tepid results in the country. And Apple announced a billion-dollar investment to comply with local law as it continued to watch Chinese demand for its iPhones fade. This summer of challenge for the three companies offers a broad illustration of just how varied the obstacles have become for foreign companies in China. They also show in stark terms why this vast market has been frustratingly difficult for outsiders.”

July 25 – Reuters (Ryan Woo, Kevin Yao and Stella Qiu): “All major Chinese enterprises owned by the central government will be turned into limited liability companies or joint-stock firms by the end of the year as part of reforms aimed at overhauling their unwieldy structures. Beijing is trying to revive China's bloated state-owned sector and create ‘bigger and stronger’ conglomerates capable of competing on the global stage. Restructuring state-owned enterprises (SOEs) will separate government administration from management of day-to-day business operations, one step toward greater efficiency.”

Europe Watch:

July 27 – Bloomberg (Alessandro Speciale): “Germany’s grip over the euro area’s financial institutions is getting firmer. With the reappointment… of Werner Hoyer as president of the European Investment Bank, Germany’s hold over three key roles for the region’s economy was reaffirmed. A fourth one -- by far the most important -- could follow. Bundesbank President Jens Weidmann is a frequently mentioned candidate to replace Italy’s Mario Draghi when his term as European Central Bank’s president runs out in October 2019… Further complicating the succession talks will be the large number of European posts coming up for grabs in the next two years, as well as French President’s Emmanuel Macron stated intention of creating a euro-area finance minister.”

July 24 Financial Times (Michael Hunter): “Could zombies be keeping Mario Draghi awake at night? Investors remain highly sensitive to the outlook for the start of the reduction, or tapering, of the European Central Bank’s €60bn monthly stimulus spending. As the scrutiny of the ECB president’s every utterance continues, there is some eye-catching analysis from Bank of America Merrill Lynch on what could be an important factor in his thinking on tapering. It points toward so-called ‘zombie’ companies, or those that depend on ultra-loose monetary policy for credit provision. ‘Although corporate leverage has helpfully declined over the last few years, we still find that 9% of firms have very weak interest coverage metrics in Europe,’ says the bank’s Barnaby Martin, credit strategist. The research defines a zombie company as one with an interest coverage ratio ‘at or below 1 times’ earnings.”

July 25 – Reuters (Paul Carrel and Irene Preisinger): “German business morale hit a record high in July as ‘euphoric’ manufacturers, shrugging off the impact of a strong euro, anticipated a surge in already robust exports from Europe's biggest economy. The Munich-based Ifo economic institute said… its business climate index, based on a monthly survey of some 7,000 firms, hit its third record high in as many months with a rise to 116.0 from 115.2 in June.”

Central Bank Watch:

July 24 – Bloomberg (Tanvir Sandhu): “The European Central Bank has given the green light to summer carry trades as volatility remains contained and the policy meetings in September and October are likely reserved to outline further details on quantitative easing, buying more time for carry, Bloomberg strategist Tanvir Sandhu writes. Italian bonds offer one of the most attractive carry and rolldown across European government bonds, with the five-year bucket three-month carry and roll at 16 bps and one-year at 70 bps. That compares with one-year of 30 bps for 10-year bunds and 42 bps for bonos. Given that carry trades are implicitly short volatility, two-year Italy stands out as the most attractive on a vol-adjusted basis. Since earning the full carry and rolldown assumes an unchanged yield curve, adjusting for volatility will provide a more realistic indicator of profitability.”

Global Bubble Watch:

July 22 – Financial Times (Chris Flood): “Vanguard is closing in on BlackRock’s title as the world’s largest asset manager after pulling in more than $1bn a day of investor money since the start of the year. The two heavyweights of the investment industry are attracting unprecedented inflows into their low-cost exchange traded funds amid rising investor dissatisfaction with the high fees and poor performance of active managers that strive to beat the market. Investors ploughed $215bn into Vanguard’s funds in the first six months of the year, far outpacing new business growth for BlackRock, which pulled in $168bn over the same period.”

July 26 – Financial Times (Eric Platt): “Investor enthusiasm for corporate debt has neared levels not seen since before the start of the credit crisis, in a deepening endorsement of a global economic recovery that has already propelled US stock markets to record heights. In several parts of the US bond markets, companies are now able to raise money at a lower cost, relative to government bonds, than they have for the past decade… ‘This is a continuation of this hunt for yield that you have seen for the last couple of years,’ said Brian Kennedy, a portfolio manager with Loomis Sayles. ‘Between the economic backdrop, lack of yield around the world and the buyers out of Asia and Europe, the investment grade and high-yield markets are the sweet spots for people who want yield.’”

July 23 – Financial Times (Laura Noonan): “The men running two of Wall Street’s biggest banks saw the value of their shareholdings rise by a combined $314m in 2016 as stock market prices rocketed in the aftermath of Donald Trump’s election as US president. But while Jamie Dimon and Lloyd Blankfein each enjoyed $150m-plus rises in the value of their stock and options in JPMorgan Chase and Goldman Sachs, respectively, the average gains for the other 18 best-paid chief executives at international banks last year was $4m.”

July 25 – Reuters (Gertrude Chavez-Dreyfuss and Anna Irrera): “Wall Street's main regulator said on Tuesday that initial coin offerings (ICOs), a means of crowdfunding for blockchain technology companies, should be subject to the same safeguards required in traditional securities sales. ICOs have become a bonanza for digital currency entrepreneurs, allowing them to raise millions quickly by creating and selling digital ‘tokens’ with no regulatory oversight. But the Securities and Exchange Commission (SEC) has said that the tokens can be considered securities, and therefore, may need to be registered unless a valid exemption applies.”

Fixed Income Bubble Watch:

July 23 – Financial Times (Attracta Mooney): “Investors piled more than $355bn into bond funds in the first five months of 2017 despite concerns that the fixed-income market is set for an unprecedented shake-up as central banks shift towards normalising monetary policy. The surge of money has put fixed-income funds on course to beat 2016’s full-year inflows of $375bn… The net inflows are already larger than the amount of money invested in fixed income funds over the entire 2013 and 2015. The biggest winners this year include Pimco’s income fund, T Rowe Price’s new income fund that invests in US bonds, and a Vanguard index fund investing in global fixed income. These products have had inflows of between $4bn and $27bn since the start of the year.”

July 23 – Financial Times (Attracta Mooney): “Bob Michele, a bond fund veteran, is more worried than he has ever been. The head of global fixed income at JPMorgan Asset Management, the US fund house, has spent almost four decades investing in bonds. The 57-year-old… is gearing up for the most demanding period of his career. ‘The next 18 months are going to be incredibly challenging. I am not an equity investor, but I can just imagine how equity investors felt in 1999, during the dotcom bubble,’ he says… The Nasdaq Composite, the index, lost 78% of its value in the 18 months after the tech bubble collapsed. Mr Michele, like many fixed-income investors, is acutely worried about how central banks’ retreat from monetary easing will affect the bond market.”

Federal Reserve Watch:

July 25 – Wall Street Journal (Kate Davidson): “President Donald Trump is considering renominating Janet Yellen as Federal Reserve chairwoman but also views his economic adviser Gary Cohn as a top candidate, he told The Wall Street Journal… Mr. Trump reiterated that he thinks Ms. Yellen is doing a good job and he has ‘a lot of respect for her,’ and said she is still in the running to serve a second four-year term as leader of the central bank. But he said he also is considering replacing Ms. Yellen with Mr. Cohn, who became Mr. Trump’s National Economic Council director after a 26-year career at Goldman Sachs…”

July 23 – Reuters (Marius Zaharia): “In September 2015, the U.S. Federal Reserve cited risks from China as a key reason for delaying its first interest rate hike in a decade. A wall of Chinese debt maturing in the next few years could jolt the country back into the U.S. central bank's policy deliberations. Two years ago, it was a collapse in Chinese stocks, a surprise yuan devaluation and shrinking foreign exchange reserves that roiled financial markets that delayed the Fed, but it did raise rates three months later and has tightened further since. Now, some see risks emerging in China's dollar-denominated bonds that could give the Fed greater pause for thought as it raises rates, even as other central banks signal a shift from ultra-easy policy. To be sure, Fed officials have not publicly flagged China's debt as a major risk in their policy discussions. However, debt analysts point to the possibility of another September 2015 moment in which the Fed takes its cues from concerns about China.”

July 23 – Financial Times (Gavyn Davies): “Janet Yellen, in an unusually ebullient mood, suggested last month that there may not be a repeat of the Global Financial Crash (GFC) ‘in our lifetimes’. Given the extreme severity of the GFC, that is perhaps a fairly easy hurdle for the central bankers to clear. As a result of the co-ordinated efforts of Basel III and the Financial Stability Board under Mark Carney, the fault lines in the pre-2008 financial architecture have been largely repaired. A more difficult question is whether the current phase of rising markets, which began in 2009, will end because financial asset prices implode under their own weight. There may not be a complete collapse of the entire financial system this time, but there could still be a very unpleasant bear market for investors to endure. It is clear from the latest Fed minutes that ‘a few’ members of the FOMC are more worried about the risk of financial instability than Chair Yellen, but even they seem reluctant to tighten monetary or prudential policy unless the Fed’s dual mandate, aimed at low inflation and maximum employment, is under threat.”

July 26 – Bloomberg (Craig Torres): “Federal Reserve officials said they would begin running off their $4.5 trillion balance sheet ‘relatively soon’ and left their benchmark policy rate unchanged as they assess progress toward their inflation goal. The start of balance-sheet normalization -- possibly as soon as September -- is another policy milestone in an economic recovery now in its ninth year. The Fed bought trillions of dollars of securities to lower long-term borrowing costs after cutting the main interest rate to zero in December 2008.”

U.S. Bubble Watch:

July 25 – Reuters (Lucia Mutikani): “U.S consumer confidence jumped to a near 16-year high in July amid optimism over the labor market while house prices maintained their upward trend in May, which could boost consumer spending after recent sluggishness… ‘This brightens the outlook for the economy as we enter the second half of the year,’ said Chris Rupkey, chief economist at MUFG... ‘We expect Fed officials will continue with their gradual pace of rate hikes secure in the knowledge that a confident consumer means that more spending is on the way.’”

July 26 – Bloomberg (Patricia Laya): “The U.S. housing market is stabilizing near 10-year highs, according to government data Wednesday that showed sales of new homes were slightly less than forecast. Single-family home sales increased 0.8% m/m to 610k annualized pace (est. 615k). Median sales price fell 3.4% y/y to $310,800. Supply of homes crept up to 5.4 months from 5.3 months; 272,000 new houses were on market at end of June.”

July 25 – Bloomberg (Patricia Laya): “Steady price gains in 20 U.S. cities in May indicate that a tight supply of properties paired with increased demand is boosting home values, according… S&P CoreLogic Case-Shiller… 20-city property values index increased 5.7% y/y (est. 5.8%). National price gauge advanced 5.6% y/y. An shortage of listings is still behind the rapid appreciation of home prices, particularly in high-demand areas such as Portland, Oregon, and Seattle, where values have surpassed pre-recession peaks.”

July 27 – Wall Street Journal (Michael Wursthorn): “Wall Street brokerages are pushing customers to take out billions of dollars in loans backed by stocks and bonds, a trend that yields lucrative fees for the firms but poses risks for borrowers. Executives at Morgan Stanley earlier this month highlighted these loans to individuals as a big growth area and revenue driver, saying the loans helped expand the bank’s overall wealth lending by about $3.5 billion, or 6%, in the second quarter. On Thursday, Goldman Sachs… took a step toward growing its securities-based lending business through a new partnership with Fidelity Investments. For brokerages, these so-called securities-backed loans have become a reliable source of revenue in the years since the financial crisis as firms have begun moving away from a business model of charging commissions for trading to a system of fees based on assets under management.”

Japan Watch:

July 24 – Bloomberg (Andy Sharp): “Former Defense Minister Shigeru Ishiba overtook scandal-hit Prime Minister Shinzo Abe as the best person to lead Japan, an opinion poll showed… Ishiba was seen as the most appropriate choice for prime minister by 20.4% of respondents to the poll conducted by the Sankei newspaper and FNN TV network, while 19.7% picked Abe. In a similar survey in December, Ishiba’s 10.9% lagged behind the 34.5% who favored Abe.”

July 25 – Reuters (Tetsushi Kajimoto): “The two new members of the Bank of Japan's policy board said… that the central bank should continue efforts to achieve its 2% inflation goal and it was premature to debate an exit from its massive monetary stimulus. Goushi Kataoka, a 44-year-old former economist… and an advocate of massive money printing, said he wants to see the price goal achieved quickly although he cannot say when that can be. The other new board member, Hitoshi Suzuki, a 63-year-old former deputy president of Bank of Tokyo-Mitsubishi UFJ… said it was ‘dangerous’ to markets to debate an exit from the stimulus now.”

EM Bubble Watch:

July 24 – Bloomberg (Natasha Doff): “The rapid growth of a BlackRock Inc. exchange-traded fund that tracks emerging-market debt is causing jitters among investors. The iShares JP Morgan EM Local Government Bond ETF, ticker IEML, has doubled in size this year, mopping up more than $3 billion of inflows as investors reach for average yields as high as 4.72% in developing economies. The risk is that if the carry trade unwinds, as tends to happen eventually, investors could race for the exit all at once and send the fund tumbling.”

July 24 – Wall Street Journal (Carolyn Cui): “Venezuelan bond prices tumbled to their lowest levels of the year as default fears grew following U.S. President Donald Trump’s threat to impose sanctions on the country. State-owned oil producer Petróleos de Venezuela SA’s bonds due in November fell 2.9% late in New York trading Monday and have tumbled 7.6% over the past six sessions, now at their lowest levels since December… The government’s bonds due in 2038 were down 10% during the period after falling 4.3% on Monday.”

Leveraged Speculation Watch:

July 26 – Bloomberg (Katia Porzecanski): “Paulson & Co., the investment firm that shot to fame betting on the collapse of the U.S. housing market, is closing its 2-year-old long-short equity fund in an effort to shift strategies after a steep drop in assets. ‘We are re-focusing the funds on our core areas of expertise in merger arbitrage and distressed credit, where our assets have been growing,’ founder John Paulson said in a letter to investors… ‘We thank the long-short team for their efforts on behalf of the company.’”

Geopolitical Watch:

July 26 – Bloomberg (Stepan Kravchenko): “Russia threatened to retaliate against new sanctions passed by the U.S. House of Representatives, saying they made it all but impossible to achieve the Trump administration’s goal of improved relations. The measures push U.S.-Russia ties into uncharted territory and ‘don’t leave room for the normalization of relations’ in the foreseeable future, Deputy Foreign Minister Sergei Ryabkov said… Hope ‘is dying’ for improved relations because the scale of ‘the anti-Russian consensus in Congress makes dialogue impossible and for a long time,’ Konstantin Kosachyov, chairman of the international affairs committee in Russia’s upper house of parliament, said… Russia should prepare a response to the sanctions that’s ‘painful for the Americans,’ he said.”

July 25 – CNBC (Nyshka Chandran): “The rivalry between India and China is heating up as the heavyweight economies face territorial tensions on both land and sea. A fierce border standoff in Bhutan's Doklam region — triggered by a Chinese road construction project in a disputed area and a Bhutanese request for Indian help — is now entering its second month with soldiers from both sides engaged in skirmishes. But a new confrontation in the relationship is arising as New Delhi is growing concerned about a Chinese naval presence in its own backyard: the Indian Ocean. ‘As the [Doklam] crisis stretches on, China is likely to seek ways to pressure India, both on the border and elsewhere, and this will compound the cycle of competition that is already well underway,’ Shashank Joshi, research fellow at the Royal United Services Institute, said…”

July 24 – South China Morning Post (David Barboza): “China… issued its strongest warning yet to India over their month-long border ­dispute, saying Beijing would ­protect its sovereignty ‘at all costs’. Observers believe that China's stepping up of its rhetoric, which came before a high-level security meeting that involves both Chinese and Indian security officials, gives Beijing more bargaining power in the talks with New Delhi. Defence ministry spokesman Wu Qian also said that China planned to strengthen its ‘targeted deployment and exercises’ along the disputed border, and that India should ‘have no ­illusions’ about its military's capabilities or commitment.”

July 24 – Reuters (Michael Martina and Matthew Tostevin): “China’s Foreign Ministry has urged a halt to oil drilling in a disputed part of the South China Sea, where Spanish oil company Repsol had been operating in cooperation with Vietnam. Drilling began in mid-June in Vietnam's Block 136/3… The block lies inside the U-shaped 'nine-dash line' that marks the vast area that China claims in the sea and overlaps what it says are its own oil concessions. Foreign Ministry spokesman Lu Kang said China had indisputable sovereignty over the Spratly Islands, which China calls the Nansha islands, and jurisdiction over the relevant waters and seabed.”
          All Eyes on Blockchain: A New Way to Do Business        
A recent Deloitte survey conducted at the inaugural the Business of Blockchain conference, produced by MIT Technology Review and the MIT Media Lab Digital Currency Initiative, yielded some interesting responses.
          User Activated Hard Fork (UAHF) scheduled to activate on August 1.        


Received this update from Coinbase 
 
Dear Coinbase Customer,

We are contacting you to make you aware of recent developments in a number of proposals for technical changes to Bitcoin. All BTC stored on Coinbase will remain safe during these events described below.

The User Activated Hard Fork (UAHF) is a proposal to increase the Bitcoin block size scheduled to activate on August 1. The UAHF is incompatible with the current Bitcoin ruleset and will create a separate blockchain. Should UAHF activate on August 1, Coinbase will not support the new blockchain or its associated coin.

The User Activated Soft Fork (UASF) is a proposal to adopt Segregated Witness on the Bitcoin blockchain and could result in network instability. It is scheduled to activate at the same time as the UAHF.

To ensure the safety of customers’ funds, we will temporarily suspend BTC deposits, withdrawals, and buy/sell starting approximately 4 hours before activation of either fork.

If you do not wish to have access to UAHF coins, and do not wish to access your BTC during the fork, you are not required to take any action.
If you do wish to have access to UAHF coins or access your BTC during the fork, you should send your BTC from Coinbase to your external address by July 31.
For more information on these potential Bitcoin forks, please refer to this article: https://support.coinbase.com/customer/portal/articles/2844217-uahf-uasf-faq.

Thank you,

Coinbase Team 
Check out our Status Page and Twitter for the latest updates from Coinbase.

Hope this is helpful,

jade 


          Intel, Microsoft to bring blockchain service to the enterprise        

The new Coco Framework is set to be a first-of-its-kind innovation designed to get businesses ready for blockchain technology.

The post Intel, Microsoft to bring blockchain service to the enterprise appeared first on Computer Business Review.


          Una especie de iTunes para las prestaciones del Estado        
Proviene de la banca de inversión y ahora se propone que el Estado suizo entre en la era digital. Daniel Gasteiger se considera un pionero en materia de tecnología cívica. Se define como una persona ingenua, una calidad que podría servirle en su misión. “Una periodista de una radio local acaba de preguntarme por qué hemos elegido colaborar precisamente con el pequeño cantón de Schaffhausen”, comenta Daniel Gasteiger. “Por una razón muy sencilla: porque es gente innovadora”. A Gasteiger, de 44 años, le interesan los denominados ‘first movers’, o sea, los pioneros. Y él se considera uno de ellos. Procivis, su empresa de cadena de bloques (blockchain) acaba de anunciar que creará con el cantón de Schaffhausen una identidad digital para los ciudadanos. Este artículo forma parte de #DearDemocracy, la plataforma sobre democracia directa de swissinfo.ch Hay un proyecto análogo a escala nacional, pero que no verá la luz antes cuatro años. El proceso de consulta sobre la ley federal ...
          Microsoft stellt Blockchain-Framework “Coco” vor        
Verschiedene Blockchain-Netzwerke sollen damit verbunden werden. 2018 will Microsoft die Technologie als Open Source veröffentlichen.
          VivaTechnology 2017        

Rendez-vous mondial de l’innovation, VivaTech a accueilli près de 68 000 visiteurs, du 15 au 17 juin à Paris Expo Porte de Versailles (Paris 15e). Lors de cette deuxième édition, le Groupe IONIS, partenaire de l’événement, a présenté une trentaine de projets portés par ses étudiants et diplômés. L’occasion de mettre en avant les synergies  entre éducation et innovation existantes  entre les écoles, qui en plus de faire de IONIS Education Group la première institution de l’enseignement supérieur privé français, en font le Groupe d’enseignement leader dans les technologies informatiques et les mondes numériques. En témoignaient les très nombreux Anciens  présents à ce salon, parmi les exposants et les visiteurs.

Du projet solidaire Nich, permettant de secourir les réfugiés migrants grâce au design de service (e-artsup), au serious game en réalité virtuelle Ephedra VR pour l’apprentissage des étudiants en médecine (EPITA), à la conception d’une fusée capable de transporter jusqu’à 2000 m d’altitude des molécules pouvant déclencher la pluie Highdr’o de l’IPSA, les étudiants et Anciens du Groupe ont couvert différents domaines d’innovation grâce à des projets dans les secteurs du transport, de l’aéronautique, de la santé, du divertissement, de la cybersécurité, de l’agriculture ou encore du digital, de la réalité augmentée, du jeu vidéo, de la robotique et de l’intelligence artificielle.

Voici les principaux projets présentés :

  • Witick : application mobile permettant d’acheter et d’utiliser un ticket de transports en commun sur son téléphone. L’utilisateur achète un titre en 1 clic puis approche son smartphone de la borne pour valider son ticket.
  • Estimeo : Estimeo note les start-ups et projets innovants de manière automatique et algorithmique en se basant sur des critères financiers et extra-financiers.
  • Incarna : à la croisée du cinéma, de l’escape Game et du jeu de rôle. Incarna est une nouvelle génération de loisir en salle.
  • Horyus : projet d’authentification objets avec puce NFC et Blockchain.
  • Helppy : montre connectée aidant les personnes handicapées ou déficientes mentales à accomplir les tâches simples du quotidien
  • La météo des chantiers : application mobile pour la Société du Grand Paris permettant à ses utilisateurs de s’informer en temps réel de ce qui se passe à côté de chez eux et de ce qui adviendra dans le futur.
  • Fréquence Running : application permettant de bâtir un plan d’entraînement personnalisé et gratuit.
  • Bonanza : plateforme pour optimiser la recherche de stages par les étudiants et construire un réseau professionnel.
  • Wellcut : en quelques clics, Wellcut permet à tous de créer très simplement et de partager immédiatement l’extrait de son moment préféré d’une vidéo en ligne.
  • Quantifly : drone détecteur de pollution de l’air.
  • Wouvy : plateforme permettant aux internautes de se réunir et de travailler ensemble sur un même support, de partager et échanger des documents. Les diverses fonctionnalités accompagnent l’équipe dans un processus de réflexion et de concrétisation.
  • Evidence : miroir connecté et interactif qui assiste le médecin et soutient les patients victimes d’un AVC durant leur phase de rééducation.
  • RailZ : application d’information des usagers par les usagers.
  • Highdr’o (fusée capable de transporter jusqu’à 2000 m d’altitude, des molécules pouvant déclencher la pluie.
  • Realytics : analyse de la performance des campagnes publicitaires offline.
  • Victor & Charles : intelligence artificielle dédiée au personnel de l’hôtel qui prédit les envies des clients.
  • ICEboard : application mobile et web qui rassemble les acteurs, les gestionnaires et les décisionnaires dans une salle de crise virtuelle. 
  • My Robotics : appareil qui, en mesurant l’évolution de la sensibilité au goût des patients, permet d’adapter la posologie de leurs traitements.
  • Cowash : pressing collaboratif.
  • Morman Design : édition de logiciels web pour les salons de coiffure.
  • Aéromate : start-up d’agriculture urbaine.

 


          Choose which Australian Political Party to vote for by their Website Design!        
For those of you who are not Australian citizens and therefore are not voting in our Federal election, you need to know that here - voting is compulsory. If you don't vote without a good reason, then you get fined. The upside is we get a better representation of our citizens in our voting results. The downside is that some people just come in and 'spoil' their voting paper by scribbling on it, and others 'donkey vote' - that is just vote in the order that the selections appear.

We have a bi-cameral system, so two voting houses - the lower house or House of Representatives (where the government is formed), and an upper house or Senate, which is meant to be where our seven states and territories are represented - but in practice it acts as a bit of a safety valve on the excesses of the lower house.

It looks like we are going to have a close result, with perhaps neither major party ( Labor or Liberal - sort of like Democrats and Republicans in the USA, or Labour and Conservatives in the UK) getting a substantive majority. That means some of the minor parties - and there are a few of them - might get a guernsey in deciding who forms government in the lower house.

In the Senate, it is almost certain that neither of the major parties will get a majority (they haven't over the last couple of elections), and that one or a combination of minor parties will hold the balance of power.

After reading a post on Facebook which quoted KnowYourParties - I was inspired to wonder what would happen if you applied a design critique to each of the parties website design, and determined your vote that way?

Many thanks to the writer of KnowYourParties, whose descriptions I have borrowed entirely.

Health Australia Party
Rebranding of the Natural Medicine Party, which was probably a better description. Anti-vaxxers, fluoridophobes and homeopaths trying to expand their business via changes to medical legislation.
Their colour theming leaves a lot to be desired. They chose a good template, and then ruined it with their 'Byron Bay' hippy logo. Wasted screen realestate on an image of a bunch of anonymous people (are these their candidates?). OK, on the plus side its clean and clear, unlike their grubby anti-science views.

Seniors United Party of AustraliaFinally, a voice in parliament for the wealthiest generation that ever lived.
I think KnowYourParties description is a little harsh, or maybe that's just because as over 55yoa - they purport to represent my age group! The website looks like some ex IT geek put it together circa 1993 when the Mosaic web browser came out and allowed graphics. Unfortunately this website is comically representative of those they probably wish to recruit.


Family First
But only if your family consists of a white Christian man, a white Christian woman and at least two white Christian children and you believe everyone else is headed straight for hell.
Look, I like orange, and blue is a natural contrast, but this is just horrible - or horribly STRONG. Unfortunately 'Bob Day' sounds like some kind of annual celebration of bobbing for apples, when in fact they are bobbing for Jesus. This site is unrepresentative of what they stand for - no christian iconography anywhere.


Liberal Democrats Headed by David Leyonhjelm, who made it into the Senate in 2013 because of a herd of Lib voters being too stupid to correctly identify their preferred party. The Lib Dems are committed Libertarians whose ability to ignore all of the evidence on every possible issue would make any cult proud. 
Awful logo - and its repeated. Its very hard to carry off yellow on a white background. Did anyone realise that at the centre of this photo - its focus in fact is nothing? I think its meant to be on their leader. That top menu - you just don't see, and the slogan is just not important enough to win my vote - besides the fact that their view of the world is loathsome.

VOTEFLUX.ORG | Upgrade Democracy
 Flux (n) – an abnormal or morbid discharge of blood or other matter from the body. Whenever there’s a bill before the Senate, you use an app to discharge your opinion into a tame crossbencher and tell him (yes, it’s always going to be a him) which way to vote on each bill. Founded by two Bitcoin consultants, and works on the same blockchain principle, whatever the hell that means.
Well, they look like a software company. What's with the black background? Sooo web design circa last millennium. Pretty logo though. Unfortunately that headline reads like a 404 error.


Liberal
You wake up in an ice bath and realise that your left leg is missing, and Rupert Murdoch tells you that brown people and greenies and reds all conspired to steal your leg and are coming back for the rest of your limbs, but then why is Rupert wearing a blood-stained hospital gown, and why does his left leg look familiar, and there, on the knee, isn’t that the scar that you got when you were ten years old and fell off your bicycle?
Well, this is actually well designed in the main. Its responsive, and works well, with the leader front, centre and active. Pity about that horrible medallion logo thingy (WTF! Blue and yellow again!) What function is it meant to perform - an award? a certification? a mark of quality? Or is it just meant to NOT look anything like the Liberal party logo? Malcolm looks very presidential, and there is no sign of those nasty right wing climate deniers and homophobes.

The Nationals
You wake up in a shed and realise that your left leg is missing, and Rupert Murdoch tells you that brown people and greenies and reds all conspired to steal your leg and are coming back for the rest of your limbs, but then why is Rupert wearing a blood-stained hospital gown, and why does his left leg look familiar, and there, on the knee, isn’t that the scar you got when you were ten years old and got kicked by a horse?
Now this is interesting - the nationals take the iconography of the green movement and apply it to their arch enemy's? Given that in all their difficult seats, it is green leaning independents, or actual greenies that are their greatest threat - I expect this adoption of green iconography is intentional. Except for that horrible logo, and the specific shades of green and yellow they have chosen - this looks pretty good. Not that I'd vote for them - given their leader is one of the biggest climate deniers out there. Wise not to feature his image.

Democratic Labour Party (DLP)
If you’re an economic progressive yet somehow still a dyed in the wool Christian homophobe, this is the party for you.
That logo looked old fashioned when Bob Santa Maria commissioned it. Alternatively it looks like the logo used for film awards on advertising. The slogan is soooo dated and fuddyduddy, and about spelling! The graphic representing a subject cloud, without actually being one is very folksy.

Science Party
 Formerly the Future Party. They’re still naïve, but now they’ve got a full quiver of policies, mostly geared toward fixing the shitblizzard of the last three years.
Like the logo - although a bit more finance company than scientific. Love the image - now that's aspirational! On design - they are in contention for my vote.

Australian Cyclists Party
 Does exactly what it says on the box.
Yep - what he said. Logo is good, but could be better. Bit of waisted space at the top there right of the logo. What is it with blue and green? I'd consider voting for them, if some of their number didn't ride like crazed loons on footpaths, and are so un-evolved they don't know what a bicycle bell is for. It's to warn me that you are coming up my arse!

Shooters, Fishers and Farmers
This party is like the time I hurt my back a few years ago and thought the problem would go away like it always had before, except it didn’t and now I live with chronic back pain.
The only thing that is wrong with this logo, is that it should have a big red 45 degree line through that circle! Go and murder some defenceless animal somewhere else you vermin. Annoyingly, other than the appalling logo and social and political views, the website is quite well designed - which I suppose just goes to show that you can't judge a book by its cover. When did they add 'farmers' to their name? Was it when that farmer murdered that environment protection officer? Odious people.

Voluntary Euthanasia Party
As advertised.
Great logo, clever setup, because the power of their campaign is in the power of individual stories. Worthy of support for their design, and for their opinions in my view.

Socialist Alliance
The kind of socialists you can actually have a conversation with.
Well, it had to be red didn't it. The 'vote' message is a bit self evident. They are in need of a good slogan, and all that empty space around the logo is a waste. Other than the words - there is no real visual demonstration of what they stand for. Could do better.

Rise Up Australia Party
The actual worst. Founded by someone who got thrown out of Family First for too much hate speech, which is like getting kicked out of Labor for not doing anything.
This website is pretty foul - which I suppose does reflect the views of the party. The logo is hideous, and the functionality of the website is woeful. Let me give you some examples - it has a loader that tells you the percentage loaded - while you wait and wait (is it a flash site?). When you scroll down (try it if you can bare it) - you just get the tops of each of the candidates heads. I'd give you a screen shot if the party wasn't so vile. Oops, I couldn't resist. The menu is mid page, and has way too many items of varying sizes. On the plus size, it is responsive (unlike their mindset), and uses icons for its policy areas. That is the best thing I can say about the site, and the party.

Labor
The post-war European centre right party for Australia today. 
Not as sophisticated as Liberal, but that heading and logo are so much better. They have an image, where the focus of it is actually on their leader. Slogan good and clear, and I like the 'stand with us' phrase as opposed to 'Vote 1' and their ilk. Solid effort but room for improvement.

Online Direct Democracy – (Empowering the People!)
Like VOTEFLUX, but with PollyWeb instead of the Bitcoin blockchain. (If you say that sentence backwards at the stroke of midnight when the moon is full, Lucifer will appear and grant you three votes on bills that will never get up.) 
As Windows is to Apple - this is to good design. Is that a blue planet in a black hole? At least the're honest - its all about the technology not the people. No, just no.

Derryn Hinch’s Justice Party
It turns out that this is about Derryn Hinch’s notion of justice, not about bringing Derryn Hinch to justice. Which is disappointing. A Federal party campaigning on State issues, implying either ignorance or extreme cynicism. My money is on cynicism.
Derryn, your rich enough to afford better. The logo is ugly and literal. Judge Judy has a better one. This site is a bit of a stinker. I must implement a new rule of web design: never use dot points on a home page. The only honest bit of design is the implication that Derryn is the harbinger of justice - 'Hinch Justice'.

Jacqui Lambie Network
Anatomically incorrect: the logo is a map of Tasmania, but the policy platform is an arsehole. 
Black and orange - a favourite combination of mine. Have you noticed that they have deepetched Jacqui's hair so that it looks like an upside down map of Tasmania? Actually, this, a little like the candidate is straight shooting, without her muddling of words and images.
Pirate Party Australia
Basically progressive, and I agree with them on most things, but their ideas on intellectual property are anti-artist and their views on tax are just idiotic.
Ok, the logo is cute, the pirate ship is cute, the font is good, and the layout good, if a little old fashioned. Its a little staid really - not what you expect from outlaws.

Pauline Hanson’s One NationHave you ever licked a gallbladder?
It galls me to say it, but good logo. Fortunately that is where it stops. Too many stock graphics. No visual breathing space, and justified text. Enough said.


Veterans Party Supporting veterans with no nonsense, no political game playing and absolutely no policies.
Looks more like a recruitment advert for the forces. They always say, one strong image is better than a whole lot of bad ones. Ain't that the truth.

Secular Party of Australia
Basically pretty great, but there are a couple of issues where the commitment to secularism starts to look a little like Islamophobia.
The imagery here just says 'We want your money'. Not sure that is a good way to introduce yourself to the public - unless you're a televangelist. Logo - do I have to say it?

CountryMinded
I don’t agree with everything they say, but I’m not really their target audience. This is essentially the party that the National Party should be.
Blue and green again, really? Badly chosen template, and that logo needs to be shot. With a shotgun.

Socialist Equality Party
Trotskyists. Well-intentioned but fanatical. These are the people who never forgot that Che’s real first name was Ernest.
The site is quite mild mannered in design. That is almost a 'liberal' blue. Nice touches of red though.

Katter’s Australian Party
Uncle Ho and Margaret Thatcher cohabiting in a single mind.
Red, red, red. Reds all over the bed. We already know that Bob is deaf to nuance (shooting . . . Orlando). Apparently he is blind to colour as well. Other than that - a professional website.

Palmer United Party
The earth will shake violently, trees will be uprooted, mountains will fall, and all binds will snap – Palmer will be free. Palmer will go forth with his mouth opened wide, his upper jaw touching the sky and his lower jaw the earth, and he will swallow Odin in a single gulp. Flames will burn from his eyes and nostrils, and his sons will come after to swallow the sun and the moon.
That map of Australia is a crime against cartography, and vexillology (look it up). I love the meaninglessness of the slogan. I am surprised that they are still featuring the image of the morally (and possibly literally) bankrupt Clive.

Citizens Electoral Council
Possibly just straight-up insane. Climate deniers, but economically kinda socialist. Anti-Semitic and possibly white supremacist, but pro-immigration. They also claim that the Port Arthur massacre was commissioned by the British royal family and implemented by a mental health NGO.
Worst political website for this election. I would say it was designed by a server engineer, but that would be unfair to the design skills of server engineers. Just all types of wrong, which I suppose reflects their policies.

Australian Motoring Enthusiast Party
The Eddie the Eagle of befuddled right-wing governance.
Blue and green again. Is this a thing? Other than that, if you can't design a good logo, just use the words - and they did (I'm ignoring the ubiquitous southern cross on the wrong angle at the top).

Animal Justice Party
Better people than me.
. . . and not to be confused with Animal Farm Justice Party. Logo looks like The Wilderness Society for animals. I know the image is about live exports, but cute cat video's are more loveable.

The Arts Party
Sound policies, surprisingly shitty logo. Come on Arts Party, you had one job to do.
What he said. One job. Menu wrapping is a crime.

Non-Custodial Parents Party (Equal Parenting)
Fielded candidates for the last six Federal elections. Seventh time lucky, guys.
Couldn't organise a supervised visit - let alone a live website.

Mature Australia
Your racist Western Australian aunt.
OK this screen grab doesn't do it justice - looks like I timed it badly. Pretty logo, but what he said about the views. '2 cent tax' - they can't add up.

Christian Democratic Party (Fred Nile Group)
The party’s charter is just a bunch of bible quotes. It’s like we’re in Pennsylvania in the fucking 17th Century.
They bought a good wordpress template, and a good shot of parliament house. Pity they didn't spend as much money or care on their depressingly unimaginative, and proportionally challenged logo.

Australian Sex Party
Are you turned on by sound economic and social policies with a strong evidence basis? Then number the box and put your ballot in the slot.
OK, you did well with the logo, but seriously - an industry that has some of the most imaginatively designed sex websites and you came up with this? Its definitely not sexy, and I'm not sure it makes people take you seriously either.

Australian Progressives
A broad suite of evidence-based best practice policies that only seems progressive because Australia is such a regressive ideological clusterfuck.
Great site - get rid of that horror of a logo.  It doesn't say 'progressive'. It says . . . oh sorry I fell asleep with a pen in my hand.


Nick Xenophon Team
A bit far to the right for me personally, but Xenophon has done exactly what an independent senator is supposed to do, and pretty close to exactly what he said he would do. Which is refreshing.
Oh South Australia, you are such contrarians, but you always did have good food, and good arts. You win a boutique non-industrial prize for the orange and black combo, and a reneable power commendation for making a name like 'Xenophon' into a brand.

Drug Law Reform
Single issue party focused on treating drug use as a health issue rather than a criminal one. The stance seems well reasoned. It’s just a bit hard to take them seriously when their logo is a hemp leaf.
What he said about the logo. Some terrible images in that carousel, including a quote from Richard Branson. The green isn't even pretty.

Sustainable Australia
Formerly the Stable Population Party. They want a ‘sustainable’ population through lower immigration. If they actually cared about sustainability they’d be calling for a lower global population, but instead they’re calling for reduced population growth in a country with only 24 million people. Which means that what they are is simply racist.
Loathsome website, loathsome policies, loathsome logos.

The Greens
Yes, they wear suits now, but at least those suits are made from sustainable bamboo in a small Liberian social enterprise that sponsors education initiatives for orphaned girls.
I want to love the greens, but they have three things I am having trouble coming to grips with. The logo (OK, I can nearly forgive, as it has become their brand); this website (which commits several crimes against font usage, colour, and layout), and Lee Rhiannon. I support their ethos, but some of their policies (their small business policy from the last election seems to have disappeared) are just naive - like the design - those icons especially.

Australian Liberty Alliance
Angry Anderson (remember him? didn’t think so) vowing to stop the Islamisation of Australia. Last time I checked, Islam was holding steady at 2.2% of the population, so maybe one bald dickhead is all it takes to hold the hordes at bay.
A site designed last decade I think - or from when Angry Anderson last had a hit. Don't start me on the logo.

Renewable Energy Party
Single issue, seems good prima facie, but founded by Peter Breen, who was Ricky Muir’s only staffer for a time. I can’t figure out whether this is a good sign (Breen taught Muir how to be a halfway decent senator) or a terrible sign (how can someone go from the petrolhead party to a renewables party and expect to be believed?).
Like the look of this - simple and clean. Like clean energy - it takes a lot of work to make something look this simple.

Marijuana (HEMP) Party
Entirely about legalising weed, and there’s no suggestion that they’ve thought about a policy position on any other issues. My concern is that they’d side with anyone who takes snacks into the chamber
The design got all to hard, so they went for a smoke. Cheap shot, I know - but look at that site. Green and yellow. Really.

Anti-paedophile Party
Fair enough, but they’re also anti-sex education. So they’re imbeciles.
Unfortunately, this website looks as creepy as the people they say they oppose.


Oh, I'm exhausted! Believe me, this is more exhausting than actually filling out the Senate voting tablecloth.  Good luck tomorrow (June 2nd), and read the voting instructions, because they have changed.

I'm just looking forward to the time when the politicians of the two major parties work out that Australians do support smaller parties, and quite like when they have to discuss things with each other and argue policy. They actually don't like their government to be in total control like fascists. They like it when there is a multi-party approach to government.

Happy voting.



          Fashion brand adds NFC and blockchain for authentic personal clothing        

Fashion brand Babyghost has partnered with Chinese blockchain-as-a-service company BitSE and its VeChain project to deliver a range of clothes incorporating NFC tags and verified using blockchain technology. Demonstrating the development of fashion technology, or FashTech, VeChain chips have been added to items making up Babyghost’s 2017 spring and summer collection, unveiled at the recent […]

Read the rest of Fashion brand adds NFC and blockchain for authentic personal clothing at NFC World.


          E-commerce RCEP Chapter: Have Big Tech’s Demands Fizzled?         

Post-Mortem of Asia-Pacific regional IGF Panel Discussing Trade Rules

Over the past month, trade officials of the ASEAN group of countries and its six biggest trading partners have been frantically working to finalize the Regional Comprehensive Economic Partnership (RCEP). Expected to be ratified later this year, the RCEP is the largest mega-regional trade treaty currently being negotiated, and the first to include norms and rules on e-commerce.

Despite countries such as Japan, Korea, Australia, and New Zealand pushing for a detailed chapter on e-commerce based on the model of the Trans-Pacific Partnership (TPP), the latest information we have from the negotiating room is that the e-commerce chapter of RCEP will be far less ambitious, dealing mostly with familiar and uncontentious issues such as standards for electronic payments and signatures.

This will displease big tech companies that had hoped that RCEP would include rules on cutting-edge (but more contentious) topics like forced data localization. Data localization rules (such as rules requiring data about local users to be stored on servers within the country) would increase costs for tech companies and raise entry barriers for small competitors.

But some countries favor these rules because it allows them to subject overseas platforms to local privacy regulations, or for more sinister reasons such as making the servers more easily accessible to local surveillance programs. EFF’s position is that although data localization is rarely justified, if rules prohibiting it are to be included in trade agreements, it is essential that each country has adequate privacy and data protection laws to protect their citizens’ data.

Transparency Demands

So far, text specific to e-commerce have not been made publicly available and the leaked Terms of Reference for the Working Group on ecommerce (WGEC) is the only reference to what issues could make an appearance in the RCEP. EFF has been advocating for transparency in trade through the active dissemination of provisions related to digital economy being discussed or included in the RCEP.

We have also been pushing negotiating countries to open up the trade processes in order to bring them into closer alignment with the Internet community’s norms of open, multi-stakeholder governance. Unfortunately, at this late stage of negotiations and amidst intensifying pressure to conclude the agreement the opportunities for broad and meaningful public participation in the RCEP process remain limited.

To address the lack of public inputs and facilitate engagement between RCEP negotiators and affected stakeholders EFF has been organising a series of interventions. We organised a panel on Intellectual Property at the 18th Round in Manila, Philippines and another at the recently concluded 19th round in Hyderabad, India focusing on e-commerce issues. The most recent of these interventions was a panel on 'Trade Rules for the Digital Economy: Asia's Agreement at the WTO and RCEP' at Asia Pacific regional Internet Governance Forum (APrIGF) which took place in Bangkok from 26-29 July, 2017.

APrIGF Workshop Report

The discussions kicked off with an overview developments in global trade including shelving of large agreements such as TPP and TISA, the rise of regional treaties such as the NAFTA and RCEP and recent developments at the World Trade Organisation (WTO). While there is little public information on e-commerce provisions in the RCEP, issues included in the TPP as well as industry demands serve as reference for Internet governance areas that could be included.

Professor Peng Hwa, Nanyang Technological University drew upon the important linkages between trade and Internet governance. Different national contexts and agendas are guiding the negotiating parties and their strategies with regards to e-commerce. Given how nascent most issues related to digital economy are, there is need for continued dialogue and a measured approach to developing consensus based global rules.

Rajnesh Singh, Director Asia Pacific Regional Bureau Internet Society highlighted the challenges that trade committees and negotiators face - from uneven representation of nations, and resources to varying interpretation of the same issue. The push to regulate cross-border e-commerce underlines the need for concerted effort from civil society, academia and the technical community to ensure user rights are being inserted in these agreements.

Ms Duangthip Chomprang, Director for Regional Cooperation and Assistance at the International Institute for Trade and Development pointed out key factors behind  regional efforts to push ICT issues through trade. First, almost 70% of all global preferential trade agreements are in the Asia Pacific region, and there has also been a steady decoupling between developed and developing countries of the region. This has created the political will to push for provisions on the digital economy. Second an important, if often overlooked linkage is between the United Nations’ Sustainable Development Goals (SDG) which includes provisions to ensure trade and commerce agreements contribute to the achievement of these goals.

While there is a long way to go in improving transparency of the RCEP negotiations it was encouraging to have Mr Akhuputra, Chair the Working Group on e-Commerce (WGEC) to provide insights both into the process and the challenges of including as yet unresolved technological issues. Though the RCEP negotiations are in the 19th round the WGEC has had nine meetings so far. Mr Akhuputra suggested that the next round in South Korea may be the final meeting of the e-commerce negotiators.

Although the text remains secret, the e-commerce chapter is believed to be shorter and less detailed than the chapters on goods and services. Rules and text included will be broad enough to factor for the development gaps between participating countries. A provision likely to make an appearance, since it is included in more than 40% of the 90 trade agreements that are active in the region, covers paperless trade. Provisions for the use of international standards for paperless trade would apply to electronic authentication, e-signatures and e-documents. He highlighted the tensions between push for technologies such as blockchain and smart contracts and inclusion of text in trade agreements that seek "mutual recognition" and compliance with "international standards".

Complicating the work of WGEC are traditional segregations of areas such as goods and services which are not as easy to import in the digital context. For example, rules on electronic transmissions and goods are negotiated separately in trade agreements. However there is no consensus on how to treat electronic transmissions that transform into goods. Provisions on electronic transmission and services could impact the regulation of 3D printing technologies which are expected to shape the future of medical ecosystem in developing and less developed nations.

We are far from seeing which concerns have been addressed or what the final text will look like, but the contours of RCEP on e-commerce are beginning to materialise. Even though these details are just emerging, it may already be too late for civil society to influence the drafting of specific provisions as the WGEC is attempting to freeze the text. However, there remains a small chance that the Trade Negotiating Committee may decide to extend negotiations or open up specific issues.

For now it seems that the e-commerce chapter is going to be less ambitious and contentious than that of the TPP. Nonetheless EFF will continue to maintain a close eye on e-commerce developments in the RCEP, and continue to advocate for better transparency and public access to the negotiations.

You can watch the full video of the discussions in our workshop here: https://www.youtube.com/watch?v=dpFsJjWaeB4&t=744s


          Flurbo: A Fair Decentralized Blockchain Storage Network        

Flurbo announces its cryptocurrency token sale.

(PRWeb August 10, 2017)

Read the full story at http://www.prweb.com/releases/2017/08/prweb14586356.htm


          The importance and legal concerns of blockchain technology        
Fieldfisher launches paper on blockchain and its areas of legal concerns.
          Leave Banking, Hawk Cryptocurrencies for a Living        
There's plenty of these already--with boatloads more to come.
Manias in the business world are nothing new. In the technology realm, we've had any number of these already like the dot-com boom followed by the dot-com bust earlier in this century. In the realm of finance, the latest and greatest gold rush concerns the issuance of cryptocurrencies. Instead of initial public offerings of shares of stock, the marquee events here are initial coin offerings (ICOs). As no shortage of issuers and investors buy the gospel (or Kool-Aid for skeptics) that cryptocurrencies represent the future widely-used form of money, there is a lot to be made (or lost).

A surefire sign of optimism about opportunities is when folks leave otherwise well-paying if predictable jobs for the Wild West of trading these largely unregulated instruments. Bloomberg says that's already happening with many ex-bankers setting their sights on the larger promised returns of virtual monies:
From Hong Kong and Beijing to London, accomplished financiers are abandoning lucrative careers to plunge into the murky world of ICOs, a way to amass quick money by selling digital tokens to investors sans banks or regulators. Cut out of the action, a growing cohort of banking professionals are instead applying their talents toward buying or hawking cryptocurrency.

They’re going in with eyes wide open. For [ex-banker Richard] Liu, who put together some of China’s biggest tech deals in his old job, the chance to shape the nascent arena outweighs the dangers of a market crash or crackdown. Loosely akin to IPOs, ICOs have raised millions from investors hoping to get in early on the next bitcoin or ether, and their unchecked growth over the past year is such that they’ve drawn comparisons to the first ill-fated dot-com boom. Yet with stratospheric bonuses largely a thing of the past, the allure of an incandescent new arena far from financial red-tape has proven irresistible to some.

“Traditional investment banks and VCs need to monitor this space closely, it could become very big,” said the 30-year-old partner at $50 million hedge fund FBG Capital, which has backed about 20 ICOs. He’s off to a quick start, getting in on this year’s largest sale: Tezos, a smart contracts platform that raised $200 million to outstrip the average Hong Kong IPO size this year of around $31 million.
That said, the potential for huge gains trading these monies comes with correspondingly huge risks as their critics point out:
Critics say many ICOs are built on little more than hyperactive imaginations. A cross between crowdfunding and an initial public offering, they involve the sale of virtual coins mostly based on the ethereum blockchain, similar to the technology that underpins bitcoin. But unlike a traditional IPO in which buyers get shares, getting behind a startup’s ICO nets you virtual tokens -- like mini-cryptocurrencies -- unique to the issuing company or its network. That means they grow in value only if the startup’s business or network proves viable, attracting more people and boosting liquidity.

That’s a big if, and the sheer profusion of untested concepts has spurred talk of a bubble. The U.S. Securities and Exchange Commission signaled greater scrutiny of the red-hot sector when it warned on Tuesday that ICOs may be considered securities, though it stopped short of suggesting a broader clampdown. The regulator however did reaffirm its focus on protecting investors: part of the appeal of ICOs lies in the fact that -- for now -- anyone with a bold idea can raise money from anybody.
Actually, the dot-com boom may illustrate the future of these virtual monies. Most startups of course went bust. However, those that survived for the longer run eventually did well enough and have introduced widely-adopted consumer standards. The survivors are exceedingly well-known including the likes of Amazon, EBay, Google, and so on. Like before, these newfangled entities cannot survive on novelty alone but must offer some sort of unique selling proposition to customers.

It will take some time to sort the Amazons from the Pets.coms of the cryptocurrency world. Meanwhile, there apparently be many gamblers drawn to this realm--even from the relatively stolid world of banking.
          Opportunities and threats for Iran to enter the blockchain technology market        
Soheil Nikzad Marketing Director at PersianGIG.com Bitcoin and Blockchain technology at a glance If we are asked how much we trust somebody, the answer would probably be a collection of sentences which expresses our mental estimations about his/her possible reactions in different situations. Now if the question is solely about financial issues, we would be …
          Blockchain technology set to grow further with international standards in pipeline        
Blockchain technology holds immense promise to revolutionize financial transactions – and with it, improve a whole host of things from financial inclusion to efficiencies in government, health and all...
          Bitcoin Has Split Into Two Cryptocurrencies. What, Exactly, Does That Mean?        

If you owned bitcoin prior to Aug. 1 and slept in a little that morning, you would have woken up to find your stash had doubled—sort of.

Before Aug. 1, there was a single bitcoin currency simply called bitcoin, or BTC. Like most cryptocurrencies, bitcoin avoided having a central bank that verified transactions by maintaining a constantly verified ledger of transactions that was distributed across thousands of computers. This ledger is called the blockchain, and up until Aug. 1, there was only one of it. That day, at 8 a.m. Eastern, an “alternative coin” called Bitcoin Cash, or BCC, was born when the bitcoin blockchain split in two. Bitcoin Core, as the original currency is now called, and Bitcoin Cash have identical ledgers until Aug. 1. Now each currency maintains a separate ledger, and since cryptocurrencies are represented by their blockchains, that means bitcoin has effectively split in half, giving each user a bank account filled with both currencies.

The question of why bitcoin split is a deeply political one, as much about the philosophy of what bitcoin should be as it is about practical concerns of payment speed and per payment surcharges. As David Z. Morris described in Future Tense in June, the dispute centers on the maximum size allowed for any block in the blockchain. This is a technical point, but you can think of it as arguing over how many transactions are allowed on one page of the ledger. The original limit, imposed by pseudonymous creator Satoshi Nakamoto either as doctrine or temporary filler—depending on whether you support BTC or BCC—was 1 MB of data. This low limit is leading to delays in the amount of time it takes a transaction to be verified, which is itself leading to higher surcharges for premium verification. (For a primer on how this all works, click here.)

If transaction time were the only issue, though, there wouldn’t be a three-year-long flame war and a battling subreddits, one for each coin. There are two other issues. One is that the BTH folks think that allowing larger blocks hinders small players from “mining” bitcoins, centralizing power in the hands of large mining entities. Bitcoin was created as an alternative to centralized currencies, however, so “greater centralization” is a serious accusation. Point for BTC.

BTC has proposed a size increase of its own, one that comes with an even greater philosophical change. Segregated Witness, also known as SegWit2x, aims to fit more transactions on one page of the blockchain ledger by doubling the size of the page (that is, doubling the blocksize limit), and by reserving all space on the page for transactions. Right now, each page (each block) contains transaction details (Alice gave Bob 2 BTC), and signatures (I, Alice, agree to give Bob these 2 BTC). Instead of making the page much longer, SegWit2x wants to create more space on the page by erasing the signatures and reserving that space for transactions.  Many believe this proposal changes the fundamentals of bitcoin more than BCC does, and in terms of structure of the chain, they are right. That’s why some supporters of BCC oppose the name “alternative coin,” they view what they’re doing as closer to Satoshi’s vision than BTC. Point for BCC.

However, the Highlander “there can be only one” approach is a false choice. To understand why, we need to look at the recent history of another cryptocurrency, Ethereum. Back in June 2016, $50 million were siphoned away from the “Ethereum blockchain” by some clever thieves. However, the thieves weren’t quite as clever as they thought. Because of the way they drained the money, they had to wait 28 days before they could withdraw it and, presumably, retire to some tropical locale. In that time, Ethereum made a hard choice, one that Gavin Wood, co-founder of Ethereum, called “the single most important moment in cryptocurrency history since the birth of Bitcoin.” Rather than let the thieves make away with the money, a large portion of Ethereum users forked the blockchain so that the transactions that stole the ETH never happened.

A lot of people were upset by this. It violated the “spirit” of the blockchain. The purists split off and started their own cryptocurrency called Ethereum Classic (ETC). A year later, both currencies are still used (though ETH is worth far more than ETC) and are fairly stable. In fact, their combined value is greater than the original value.

The same thing seems to be happening with bitcoin. According to Quartz, BCC is already the third most valuable cryptocurrency, behind BTC and ETH. And, just like the Ethereum split, the BTC-BCC market is worth more than the original market was. However, while there can be more than one currency, that’s not to say there will be. It took six hours for the first BCC block to be mined, a process which usually takes about 10 minutes on BTC. That block was 1.9 MB, larger that BTC would allow, but the next block on BCC was only .04 MB, stoking fear that not enough miners had adopted BCC. Whether the achievement of BCC’s debut as a new cryptocurrency is a Pyrrhic victory for the founders or a resounding success will hinge on the answer to that question.


          Douglas Coupland: 'The nine to five is barbaric'        

The Generation X author on the future of work and how we’ve all turned into millennials

Douglas Coupland has always been one of the sharpest critics of the modern workplace. His literary works – such as Generation X, JPod and Microserfs – revolve around smart and creative young people who are better than their bosses, but unable to thrive in the corporate world. Coupland himself left full-time employment years ago and can relate to those who make the brave step to do their own thing.

“I haven’t been employed since 1988. I’m still trying to recover from the trauma. Sometimes I wake up and think: ‘Oh my God, I don’t have a job’,” he says. “My life is a vocation; I can’t imagine doing anything else. I have the freedom to explore whatever idea I want, take really random gigs and projects which change my life in some way.”

Related: Douglas Coupland: ‘I’m actually at my happiest when I’m writing on a plane’

I wish I could say that in the future there will be no meetings, but there will always be meetings

Related: The eight technologies every entrepreneur should know about

The winners in this labour force will be the people who have an actual skill

Continue reading...
          ÐšÐ¾Ð¼Ð¼ÐµÐ½Ñ‚арий к записи BITLAKE LTD — bitlake.biz — Обзор проекта с доходностью 10% навсегда (Vika KissskA)        
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          Swisscoin Whitepaper released, Blockchain on Test mode        
Finally, the most anticipated cryptocurrency, Swisscoin, is set to go public as their decentralized blockchain is completed and now in test mode. However, most of their project goals, aims and objectives were released on their whitepaper, alongside with evidence of their blockchain on test mode.


Swisscoin Blockchain on Test mode


According to the company, they aim to acquire over 1Billion users on their ecosystem, and this would be the first of its kind in the history of cryptocurrency innovation, as they’ll be providing a very unique products and services and create a total capitalization amounting to over 50 billion US dollars.

Swisscoin also stated her economic model on its whitepaper as they’re set to acquire over 30,000 merchants within a very short period and also how its value will be protected by commodity values in the form of precious metals. And this underlapping not by means of value rights separated but in a mix of 1/3 of gold, platinum and palladium will occur in actual form.

Read also: Swisscoin Cryptocurrency Review, Alternative to Bitcoin – Creating Billionaires Worldwide

Conclusively, within a short period of time, Swisscoin would become the top global payment system as more acceptance point emerges globally and usability of the crypto coin increases. However, with the expected growth on their ecosystem, it would become the one of the top-3 cryptocurrency in no time. So, if you’ve not taken advantage of this historical opportunity, I advise you take action immediately so you don’t regret it later. For those of you that is yet to register, you can register via here.

          Ð¡Ñ‚артап блокчейн-лотереи KIBO объявил об ICO и рассказал о стратегии развития        
Стартап блокчейн-лотереи KIBO объявил об ICO и рассказал о стратегии развития

Первая в мире лотерея, основанная на смарт-контрактах Blockchain и Ethereum - KIBO, объявила о запуске кампании ICO, которая позволила бы собрать средства, недостающие для запуска самой платформы, которая уже сейчас преподносится как «революция в мире онлайн-лото».
          New Decentralized Application Marketplace Spheris Launches to...        

Spheris, the just announced Decentralized Application Marketplace, promises to be the next big thing in the application distribution market. Based on innovative blockchain technologies, Spheris has...

(PRWeb August 10, 2017)

Read the full story at http://www.prweb.com/releases/2017/08/prweb14591623.htm


          iValley FinTech Accelerator Announces Its Annual FinTechTalk...        

Financial institutions, startups and venture capitalists will discuss artificial intelligence, blockchain, initial Coin Offerings, Cryptocurrency, Early Stage Fundraising, FinTech App Stores and Other...

(PRWeb August 09, 2017)

Read the full story at http://www.prweb.com/releases/fintechtalk/2017/prweb14585112.htm


          Report 407: Block ‘n’ roll        

Lead: Blockchain is simultaneously one of the most hyped and most misunderstood technologies currently around the music industry. Some evangelists have suggested it will fix every problem in the digital-music ecosystem while automating middlemen out of the process. Sceptics have suggested that the blockchain buzzphrases can’t mask the fact that this technology has yet to prove […]

The post Report 407: Block ‘n’ roll appeared first on Music Ally.


          Future of Ariba Network on display at SAP Ariba Live        
SAP Ariba Live shows enhancements to procurement software and looks at the future of the SAP Ariba Network, including machine learning, AI, bots and blockchain.
          The Uncanny Mind That Built Ethereum        
Vitalik Buterin invented the world's hottest new cryptocurrency and inspired a movement — before he'd turned 20 - "I think a large part of the consequence is necessarily going to be disempowering some of these centralized players to some extent because ultimately power is a zero sum game. And if you talk about empowering the little guy, as much as you want to couch it in flowery terminology that makes it sound fluffy and good, you are necessarily disempowering the big guy. And personally I say screw the big guy. They have enough money already."
"There's still technical problems. It doesn't scale. It's not efficient. It's not secure. It sucks, basically. It's shitty technology," says Vlad Zamfir, a developer that Buterin has hired to conceptualize the next iteration of the Ethereum software.
viz. Ethereum: Platform Review - Opportunities and Challenges for Private and Consortium Blockchains by Vitalik Buterin e.g. i.e.
  • Global Money, a Work in Progress - "Our amalgamation is first about the C6, the top six central banks now joined in the central bank swap network. It took a global financial crisis to get us to this point. The next step is bringing in the periphery, starting maybe with the BRICS. Hopefully we are educated enough to do that without requiring another global financial crisis." :P
  • Today global money is largely private credit money, the issue of a profit-seeking bank that promises ultimate payment in public money which is the issue of some state, quite possibly a different state from the one where the bank is chartered and does its business. Global money is also largely dollar-denominated, even when the ultimate users of that money lie completely outside the United States. The issue of dollar-denominated US Treasury bonds is just part of the huge stock of dollar assets and liabilities; the stuff of dollar hegemony is the private credit money dollar, not the issue of the state.

    Although global money is substantially private credit money, the fact that it is denominated in dollars means that the Fed is de facto, if not de jure, the ultimate lender of last resort for global money. Therein lies the rub. De facto the Fed's responsibility is global but de jure its authority is only local. The Fed is essentially hybrid, both government bank and banker's bank, and also both US central bank and global central bank. The great challenge of the present time is the politics of managing the hybrid reality of the global dollar system.
  • Why Central Banks Will Issue Digital Currency - "A better model, ultimately, is central bank digital currency. This would mean that a central bank, like the Federal Reserve, would participate on the network and would digitally mint U.S. dollars onto it. Since the Fed is the legal issuer of dollars, this would make digital dollars a native digital asset. There would be no need to 'convert' back to some underlying 'real' dollar because these digital dollars would be real, just in a new medium. In the same way that dollars already exist today in multiple mediums — notes, coins, electronic reserves — we would treat these digital dollars as just dollars in a new medium, backed by the full faith and credit of the U.S. government."
  • The medium of money has only changed a few times in history, from precious metals to bearer currencies to now our ledger-based electronic systems. Bitcoin and blockchain represent a transition to a new medium. This transition is often referred to as distributed ledger technology, which is a reference to today's centralized ledgers. But I find it more helpful to look back to bearer instruments, like banknotes, to appreciate what this new medium enables: a digital bearer instrument...

    The goal of the blockchain industry is to collapse these steps into a single step, where payment is the settlement, just like with physical notes. This is what I mean by digital value transfer, which I sometimes like to call money-over-IP. Soon, the phrase "cross-border payment" will make about as much sense as "cross-border email."
cf.
  • Life in the People's Republic of WeChat - "I message a Chinese friend who's in the U.S. on a fellowship and ask for a loan. Within minutes, he's sent me two hong bao, or red envelopes—a play on the red envelopes traditionally used to give gifts of money. They arrive as chat messages that say, 'Good fortune and good luck! You've received a red envelope'. Once I click on them, I have 200 yuan in my WeChat wallet."
  • The Future of Banking Is in China - "Building financial services on the back of its popular WeChat messaging system. During Lunar New Year, its over 760 million users exchanged 32 billion 'red packets', a twist on a holiday tradition to gift small amounts of cash. Last year, Tencent joined Ant in launching online-only banks that accept minideposits and microloans, extending their leadership in the country's $235 billion internet payments business. At Tencent's WeBank, the one-minute process to set up an account requires little more than a mobile-phone number, the applicant's national identification number and the user's photo taken with the phone's front-facing camera." (What Is a Bank?)*
also btw... The Web's Creator Looks to Reinvent It - "Tim Berners-Lee and other computer scientists are pondering newer technologies to create a web with more privacy and less government control... computer scientists talked about how new payment technologies could increase individual control over money. For example, if people adapted the so-called ledger system by which digital currencies are used."
          Sapiens 2.0: Homo Deus?        
In his follow-up to Sapiens, Yuval Noah Harari envisions what a 'useless class' of humans might look like as AI advances and spreads - "I'm aware that these kinds of forecasts have been around for at least 200 years, from the beginning of the Industrial Revolution, and they never came true so far. It's basically the boy who cried wolf, but in the original story of the boy who cried wolf, in the end, the wolf actually comes, and I think that is true this time."
          Desire Modification in the Attention Economy        
The Future of (Post)Capitalism - "Paul Mason shows how, from the ashes of the recent financial crisis, we have the chance to create a more socially just and sustainable global economy." (previously; via) "Learning how to think really means learning how to exercise some control over how and what you think. It means being conscious and aware enough to choose what you pay attention to and to choose how you construct meaning from experience." --dfw, this is water Albert Wenger helps set the stage a bit... Land, Capital, Attention: This Time It Is the Same
Only 1% of the global population now controls about 50% of all capital. And in another critical historical parallel, the ruling elites everywhere directly or indirectly represent the interests of capital. Capital has replaced land as the factor against which policies are measured. Take quantitative easing for example, which is aimed at reducing the cost of capital on the belief that this will continue to create jobs. But the new technological disruption has already arrived and it is digital technology. This is a new set of machines and networks. Unlike their earlier predecessors they are universal machines which as they get better can eventually do anything. And the results are that capital and labor are no longer long-term complements which has been driving down labor's share of the economy and depressing wages. Digital technology even means that less and less capital is required for most endeavors (see for instance how much cheaper it is to start a new company today than it was even a decade ago). Capital is no longer scarce and labor even less so. Where is the new scarcity? It is human attention. With birth rates thankfully decelerating almost everywhere, peak population is finally a possibility. We all have only 24 hours in the day and we need to work, eat and sleep. That puts a hard limit on how much human attention exists. At the same time digital technologies are producing unprecedented amounts of information that we could pay attention to. On Youtube alone 100 hours of video is uploaded every minute. Increasingly you can measure how valuable something is by how much attention it controls (e.g., Google, Facebook, etc). And just like previous scarcities one of the reasons that attention is scarce is that we are bad at this new technology. As society we have lots of information locked up through copyright and patents instead of making it available to everyone. As individuals we too often lack a purpose other than making money and we will happily watch another cat video in our limited free time than read a challenging book. Over time we will get better at all of this and it will let us achieve amazing things as humanity, including free education and healthcare for everyone and cleaning up the mess we have made of the planet. But none of that will happen as long as we keep ourselves trapped in a belief that capital is scarce and that everyone needs a job. So yes, this time is the same. Once again technology is fundamentally shifting scarcity and the ruling elites are controlled by the prior scarcity, this time capital, which is trying hard to maintain its power. The sooner we all begin to understand this, the better our chances of a peaceful transition. The longer we wait, the more we will be like the land owners who didn't get industrialization and led us down a path of violent change.
So broadly speaking, in a nutshell, the politics of the attention economy amounts to: Shock the middle class - "The basic structure of politics is that the median voter's income is below the national average income, so redistribution is popular. The job of the anti-redistribution party is to stand up for popular positions on other issues. Ronald Reagan was against Communism and 'welfare queens' and George W Bush 'kept us safe' and defended traditional marriage." As Mason mentions, capitalism is adaptive; how might it adapt? To maintain inherited class hierarchies in a burgeoning global social network — to extend the 'enclosure movement' from land and capital to attention itself — requires the cultivation of productive identities and the advertising of tribal affinities[*] (to justify one's existence ;) through 'brand management' of one's reputation and social credit 'score': How Companies Are Reducing Consumers to Single Numbers [1,2,3,4,5,6,7]
Policymakers should discourage the expansion of credit scoring into life scoring—or, at the very least, require disclosure of all the data and algorithms behind the scores to the people being scored. There needs to be a recognition that scoring can be "highly reductionist[,] atomizing complex, contingent relationships into simplified, one-dimensional measures that cannot provide a full and multidimensional picture" of individuals. It's not necessarily an innovation to celebrate. Rather, it can be a prelude to the discrimination that's rightly condemned. And before succumbing to the voyeuristic thrill of submitting friends or strangers to the consumer-facing versions of these scores, everyone should carefully consider the reliability of their sources.
Moving from 'markets' to 'algorithms' just shifts the problem unless they are beneficent 'machines of loving grace' out there that look beyond the efficient frontier. "Imagine it has data tentacles everywhere, reaching into browsing and buying records; game worlds; chats; texts; friend networks; phone conversations; airline, banking, utility, and entertainment records; GPS locations; surveillance cameras; whatever. It could know more about us that a spouse or lover knows. It could figure out who we really are, and what we really want—down to the dreams we won't admit to ourselves—and then steer us in that direction, onto new paths that optimize who we are, that lead us toward the lives we're best suited to live." --Linda Nagata, The Red: First Light Another way... Machines for thinking
A terrific balance between delightful stories and thoughtful analysis is found in Jerry Kaplan's relatively short book, "Humans Need Not Apply". An entrepreneur and AI expert (he is one of the personalities in Mr Markoff's story), Mr Kaplan has done some serious thinking about how AI will transform business, jobs and most interestingly, the law. The book glimmers with originality and verve... To the problem of skills not being well matched to the needs of businesses, he proposes a "job mortgage". Companies would agree to hire a person in future in return for a tax break; the person would take out a loan against the future income to pay for the training. This way, educational institutions get clearer economic signals about what skills they should teach. To lessen income inequality, Mr Kaplan gets even more inventive. Companies would get tax breaks if their shares are broadly owned, using a measure he bases on the Gini coefficient. The American government would let people choose the firms where some of their Social Security (national pension) funds would be invested. Spreading stock ownership, Mr Kaplan reckons, will diffuse the gains from companies that, using AI, make oodles of money but employ few.
also btw...
  • The trust machine - "The notion of shared public ledgers may not sound revolutionary or sexy. Neither did double-entry book-keeping or joint-stock companies. Yet, like them, the blockchain is an apparently mundane process that has the potential to transform how people and businesses co-operate." [1,2,3]
  • Don't Automate, Obliterate - "All of this kind of thinking is premised on the principle of 'don't automate, obliterate' – too much of what is currently being debated in the policy realm is about automating existing processes and further enshrining categories that made sense historically but no longer do. It is time to figure out what government and society can and should look like now that we have digital technologies."
  • Discovering why we are not technologically doomed to inequality - "The overarching theme in all this work, however, is profound: it is that inefficiency and rent (whether it's increased or is simply being divided differently) are important causes of inequality, and that power in some form or other is central to these mechanisms. The important lesson to draw is that policies can be developed that at the same time create greater prosperity and distribute the fruits more equally — though they may be policies it will take brave politicians to put in place as they will challenge current power structures."
  • The difference between social democratic and liberal intuition - "Liberals don't really believe welfare is a good thing, but instead view it as a necessary thing in order to save people from total destitution... I don't share this liberal view of welfare. Rather, I think welfare is incredibly good and cool. In fact, I'd like to increase welfare expenditures by trillions of dollars each year."
  • Data shows that welfare doesn't have a corrupting influence on poor people - "Studies rebut a long-cherished belief in America, on the right and left, that welfare encourages bad behavior by the poor."
  • Former IMF chief economist backs 'people's QE' - " 'There is clearly something else you can do if you get to zero (inflation) and still want to increase spending. You can buy goods. Which one should you choose? We haven't asked the question in the crisis but we should', he said. Blanchard said that this does not mean central banks would buy goods directly. Rather, governments can increase their fiscal deficits by spending on infrastructure projects. Central banks can then buy this debt with newly created money."
  • Trekonomics - "Brad DeLong: Social credit! Quantitative easing for the people! Monetary policy via direct crediting of seigniorage to everyone's bank account, in equal shares!"
  • Negative interest rates and helicopter money could be a marriage made in heaven - "If strongly negative interest rates were ever implemented, they would spread through the deposit system. By itself, that would gradually shrink the money supply — and this is a reason to worry that negative rates could be contractionary. The hope is that the banks, which create most of the money in circulation, would expand their balance sheets (lend more at slightly less negative rates than charged on deposits, and profit from the margin) to make up for negative interest cost on their own reserves. But if they did not do so enough, there would be a case for expanding the money supply directly — and helicopters would be the most effective way to do so."
  • Negative real rates signify a broken financial system - "In short, the best explanation for why private markets are forcing interest rates to zero is that the banking system is broken. The system which functioned for centuries on the basis of unsecured, reputation-based, interbank lending no longer exists. ZIRP is just evidence that the financial industry is turning to government as a source of the liquidity that the financial industry is no longer capable of creating on its own."

          Ethereum Launched        
In case you missed it Ethereum announced its first developer release a week ago. What is Ethereum? According to the video it's a "planetary scale computer powered by blockchain technology." Given the breathlessness, some skepticism is in order, but what if it purports to do on the tin is true? One good sign, I'd submit, is they recognize that Ethereum does not exist in a regulatory vacuum despite their claims of being a 'trustless' computing platform. On that note, I'd say widespread adoption, of any digital currency, hinges on gov't/central bank[*] backing, viz. fedcoin or cf. any other govcoin. also btw...
  • Vapor No More: Ethereum Has Launched - "These are very early days; this is only the first preliminary phase of a multi-stage launch. (One which will theoretically end with an eyebrow-raising transition from proof-of-work to proof-of-stake, for you hardcore cryptocurrency nerds out there.) Even then, performance will be terrible; it will be a decentralized virtual machine, but a painfully slow and weak one compared to the computer on your desk, or even the one in your pocket."
  • Ethereum Network Continues Thawing Process in Anticipation of the Start of Trading - "The gas limit will not be released immediately, but will grow gradually. Ethereum's gas price is determined by miners and how much of their computing power they are wiling to contribute to the network. If no miners update their client and raise the artificial limit they are willing to accept, then no transactions will be possible on the Ethereum network."
  • Ethereum Launches Frontier; Ether Mining Begins, Trading to Follow - "The Frontier release is an achievement to be lauded and not taken lightly, but Ethereum still has a long, difficult road ahead. Its technical merits continue to be challenged by different parties, and significant development milestones remain. However, to anyone excited by the promises of decentralized blockchain technology, Ethereum is a project that is surely awe-inspiring and, if successful, to be one of the greatest technological feats since the advent of the Internet."
Some previous hype:
  • The Utopia Algorithm - "When you buy something on eBay or Airbnb, a cut goes to the company for facilitating the transaction. A handful of programmers are planning to build an online marketplace on Ethereum where buyers and sellers can connect without a third party and their commission."
  • Come With Us If You Want to Live[*; pdf] - "I prefer thinking about the problem of 'How do we make sure that all people have at least something?' So figuring out how to create a currency that would, say, give everyone on earth one unit per year—to me, that would be the ideal."
  • More on the possible benefits of Ethereum[*] - "One of the more advanced concepts being touted for a next-generation Bitcoin is the idea of decentralised autonomous corporations (DAC) – companies with no directors. These would follow a pre-programmed business model and are managed entirely by the block chain. In this case the block chain acts as a way for the DAC to store financial accounts and record shareholder votes."
  • Filtered for the future of the firm - "So, y'know, the idea that a corporation - an organisation for orchestrating human endeavour to deliberate ends - an entity invented in the 1600s, and entity which BY ITS INESCAPABLE LOGIC forces us into mass production, mass consumption, mass media, alienation and the loss of individuality, and all kinds of ugly inhuman shit... the idea that we can re-invent the corporation, and create new forms of it: That's interesting."
  • The idea that we might create a type of organisation which is empowering, has local value which doesn't mean everything gets coerced into the value of giant companies, is smaller, can be interrogated and critiqued because it's just code, that avoids the priesthoods of capital and law.

    That a company might be a fuzzy-edged thing, where consumers are owners too...

    I'd say: Make a little bottle-city company that embodies all of this. Consumer-owners, internal currencies for resource allocation, corporate governance as executable code, doing an actual interesting tractable not-too-ambitious thing. Half co-op, half lifestyle business, half startup. Show what happens when we use capital, instead of capital using us. Do it simply and elegantly. Make a little nest of these companies. Then sit back and see what happens.
  • Teenage Hacker Transforms Web Into One Giant Bitcoin Network - "Ethereum and other next-gen crypto-platforms paint a very attractive picture of our online future, one where users are in control, not governments or big companies."
  • There's a blockchain for that[*] - "There's this hopelessly geeky new technology. It's too hard to understand and use. How could it ever break the mass market? Yet developers are excited, venture capital is pouring in, and industry players are taking note. Something big might be happening. That is exactly how the Web looked back in 1994 — right before it exploded. Two decades later, it's beginning to feel like we might be at a similar liminal moment. Our new contender for the Next Big Thing is the blockchain — the baffling yet alluring innovation that underlies the Bitcoin digital currency."
There is a contingent on today's Internet—a minority, perhaps, but influential—who believe that the industry took a wrong turn over the past decade. That an Internet dominated by a few big companies is an unhealthy one. That the centralized-computing paradigm—of privately owned data silos housed in giant server farms that harvest our personal data in order to sell ads—is one that needs to change. The entrepreneurs, coders and crypto experts leading the blockchain charge — I shall call them blockchainiacs, because they need a name — see this new technology as an antidote, and they are hopped up on dizzying visions of a disrupted future. (One sure sign that this technology has achieved geek-cred critical mass: The tech publisher O'Reilly just announced a new conference on the topic.)
Some more background material:
  • Understanding the blockchain - "The technology concept behind the blockchain is similar to that of a database, except that the way you interact with that database is different. For developers, the blockchain concept represents a paradigm shift in how software engineers will write software applications in the future, and it is one of the key concepts that needs to be well understood. We need to really understand five key concepts, and how they interrelate to one another in the context of this new computing paradigm that is unravelling in front of us: the blockchain, decentralized consensus, trusted computing, smart contracts, and proof of work/stake. This computing paradigm is important because it is a catalyst for the creation of decentralized applications, a next-step evolution from distributed computing architectural constructs."
  • The reality is that the crypto-led computer science revolution is giving us concepts that go way beyond a one-currency type of scenario. Yes, bitcoin is programmable money, but the blockchain is also programmable value, programmable governance, programmable contracts, programmable ownership, programmable trust, programmable assets, etc. And we have barely scratched the surface on these applications.

    It is too early to tell exactly where the cryptocurrency landscape will end up. Maybe it will be like social media, with four giant platforms, dozens of large players, thousands of other companies as beneficiaries, and of course, millions if not billions of end-users. And that would be a good thing.

    But to get there, let's not forget the basic golden rule of network effects: without users, there is no network effect.
  • Blockchain scalability - "Blockchain scalability is an essential set of issues that must be tackled as blockchain technologies become more popular. It's particularly difficult to build for scalability and to maintain backward compatibility. Solutions are being proposed, in academic papers and whitepapers, but we'll have to wait and see what really works."
  • The Blockchain is the New Database - "It's a bit like your home address. You can publish your home address publicly, but that doesn't give any information about what your home looks like on the inside. You'll need your private key to enter your private home, and since you have claimed that address as yours, no one else can claim a similar address as theirs. The blockchain can also be seen as a software design approach that binds a number of peer computers together that commonly obey the same 'consensus' process for releasing or recording what information they hold, and where all related interactions are verified by cryptography."
  • Enabling Blockchain Innovations - "Chaum introduced the blind signature, which he used to provide a cryptographic means to prevent linking of the central server's signatures (which represent coins), while still allowing the central server to perform double-spend prevention. The requirement for a central server became the Achilles' heel of digital cash."
  • Clarifying the Foundational Innovation of the Blockchain[*] - "Let me repeat that again for emphasis: before the blockchain's existence there were *no* systems that were organizationally decentralized, yet logically centralized. This is why Bitcoin is such a foundational technology."
  • Blockchains as a public and private resource - "In other words, what's still to be determined is whether Ethereum and its ilk would ever be more cost efficient on a per participant basis than just trusting the government to run an equivalent database on the public behalf, funded by good old fashioned tax dollars.‏"
  • Demystifying incentives in the consensus computer[*] - "Bitcoin and similar cryptocurrencies are a massive network of computational devices that maintain the robutness and correctness of the computation done in the network. Cryptocurrency protocols, including Bitcoin and the more recent Ethereum system, offer an additional feature that allows currency users to specify a "script" or contract which is executed collectively (via a consensus protocol) by the network. This feature can be used for many new applications of cryptocurrencies beyond simple cash transaction. Indeed, several efforts to develop decentralized applications are underway and recent experimental efforts have proposed to port a LinuxOS to such a decentralized computational platform."
  • In this work, we study the security of computations on a cryptocurrency network. We explain why the correctness of such computations is susceptible to attacks that both waste network resources of honest miners as well as lead to incorrect results. The essence of our arguments stems from a deeper understanding of the incentive-incompatibility of maintaining a correct blockchain. We explain this via a ill-fated choice called the verifier's dilemma, which suggests that rational miners are well-incentivized to accept an unvalidated blockchain as correct, especially in next-generation cryptocurrencies such as Ethereum that are Turing-complete. To explain which classes of computation can be computed securely, we formulate a model of computation we call the consensus verifiability. We propose a solution that reduces the adversary's advantage substantially, thereby achieving near-ideal incentive-compatibility for executing and verifying computation in our consensus verifiability model. We further propose two different but complementary approaches to implement our solution in real cryptocurrency networks like Ethereum. We show the feasibility of such approaches for a set of practical outsourced computation tasks as case studies.
  • A simple model to make sense of the proliferation of distributed ledger, smart contract and cryptocurrency projects - "I think the two dimensions that help me think about these projects are: [1] 'Who do I trust to maintain a truthful record?'; and [2] 'What do I need the record to be about?' "
  • Cost? Trust? Something else? What's the killer-app for Block Chain Technology? - "Imagine we're living five or ten years in the future. Perhaps we have a securities block chain that records ownership of all securities in the world. Perhaps we have a derivatives smart contract platform that records (and enforces?) all derivatives contracts? Maybe, even, there will be a single, universal platform of this sort."
  • Sure – everybody still has a copy of the data locally... but the consensus system ensures that we know the local copy is the same as the copy everywhere else because it is the shared consensus system that is maintaining the ledger. And so we know we're producing our financial statements using the same facts as all the other participants in the industry.

    Does this mean we no longer need audit? No longer need reconciliations? Obviously not, but perhaps this approach is what is driving some of the interest in this space?

    But notice: this is just a way of ensuring we agree on the facts: who owns what? Who has agreed to what? We can still run our own valuation algorithms over the top and we could even forward the results to the regulator (who could also, of course, have a copy of the ledger) so they can identify situations where two parties have very different valuations for the same position, which is probably a sign of trouble.
  • Smart Contracts? - "I reprised my current theme that the world of 'blockchains' is really two distinct worlds – the world of Ripple-like ledgers and the world of Bitcoin-like systems – that happen to be united by a common architecture, the Replicated, Shared Ledger. This unifying concept is based on the idea that each participant has their own copy of the entire ledger – and they trust the 'system' – whatever system that is – to ensure their copy is kept in sync with everybody else's. The differences are about what the ledger records and how it is secured."
  • Broadly speaking, Ripple-like systems are focused on the representation of "off-system" assets and are secured by identifiable entities. Systems like Ripple, Hyperledger and Eris are broadly in this world, I think. The security model of these systems is based on knowing who the actors are: if somebody misbehaves, we can punish them because we know who they are!

    Bitcoin-like systems are more focused on "on-system" assets and are secured by an anonymous pool of actors. Bitcoin and Ethereum are broadly in this space, I think. The security model here is based more on game-theoretic analyses of incentive structures: the goal is to make it overwhelmingly in the actors' financial interests to do the "right" thing...

    Bitcoin-like systems could be disruptive to existing institutions if they gained widespread adoption, whereas Ripple-like systems seem, to me, to be far more closely aligned to how things work today and are, perhaps, a source of incremental innovation.

    If this observation is correct, then firms looking at this space probably need to assess the technologies through different lenses. The question for banks for Ripple-like systems is: "how could we use this to reduce cost or improve our operations" whereas the question for Bitcoin-like systems is: "how would we respond if this technology gained widespread adoption?"
  • A Simple Explanation of Balance Sheets - "One can imagine a world where the bank still records that it owes some money to its customers but the shared ledger is the place that records precisely who those people are. This is fundamentally different to using the shared ledger as a mirror (or mirroring it to the bank's own ledger) – it's more akin to seeing the shared ledger as a partial subledger. And it might perhaps be something that gets adopted to different degrees by different firms... hopefully this sketch shows some possibilities for where this could be going. And, like I said earlier, none of this will happen unless we get everybody to the same page with the right mental model for how banking works."
  • Two revolutions for the price of one? - "Bitcoin is worse than existing solutions for all the use-cases that banks care about. It's expensive. It's slow. And it's 'regulatorily difficult'. And this is by design."
So, if this is true, we should expect to see adoption of Bitcoin come from the margins, solving marginal problems for marginal users. But disruptive innovations have a habit of learning fast and growing. They don't stop at the margins and they work their way in and up... Bitcoin essentially runs on a MASSIVELY replicated, shared ledger. (The trick is in keeping it consistent, of course...) It sounds insanely inefficient and expensive... and perhaps it is. But we also have to ask ourselves: inefficient and expensive as compared to what? Just look at the state of banking IT today... Payments, Securities, Derivatives... Pick any one. They all follow the same pattern: every bank has built or bought at least one, usually several, systems to track positions and manage the lifecycle of trades: core banking systems, securities settlement systems, multiple derivatives systems and so on. Each of these systems cost money to build and each of them costs even more to maintain. And each bank uses these systems to build and maintain its view of the world. And they have to be connected to each other and kept in sync, usually through reconciliation... But what if... what if these firms – that don't quite trust each other – used a shared system to record and manage their positions? Now we'd only need one system for an entire industry... not one per firm. It would be more expensive and complicated to run than any given bank-specific systems but the industry-level cost and complexity would be at least an order of magnitude less. One might argue that this is why industry utilities have been so successful. But a centralised utility also brings issues: who owns it? Who controls it? How do the users ensure it stays responsive to their needs and remains cost-effective? The tantalising prospect of the blockchain revolution is that perhaps it offers a third way: a system with the benefits of a centralised, shared infrastructure but without the centralised point of control: if the data and business logic is shared and replicated, no one firm can assert control, or so the argument goes. Now, there are lots of unsolved problems: privacy, performance, scalability, does the technology actually work, might we be walking away from a redundant (antifragile?) existing model? Who will build these platforms if they can't easily charge a fee because of their mutualised nature? Difficult questions.

          Choose which Australian Political Party to vote for by their Website Design!        
For those of you who are not Australian citizens and therefore are not voting in our Federal election, you need to know that here - voting is compulsory. If you don't vote without a good reason, then you get fined. The upside is we get a better representation of our citizens in our voting results. The downside is that some people just come in and 'spoil' their voting paper by scribbling on it, and others 'donkey vote' - that is just vote in the order that the selections appear.

We have a bi-cameral system, so two voting houses - the lower house or House of Representatives (where the government is formed), and an upper house or Senate, which is meant to be where our seven states and territories are represented - but in practice it acts as a bit of a safety valve on the excesses of the lower house.

It looks like we are going to have a close result, with perhaps neither major party ( Labor or Liberal - sort of like Democrats and Republicans in the USA, or Labour and Conservatives in the UK) getting a substantive majority. That means some of the minor parties - and there are a few of them - might get a guernsey in deciding who forms government in the lower house.

In the Senate, it is almost certain that neither of the major parties will get a majority (they haven't over the last couple of elections), and that one or a combination of minor parties will hold the balance of power.

After reading a post on Facebook which quoted KnowYourParties - I was inspired to wonder what would happen if you applied a design critique to each of the parties website design, and determined your vote that way?

Many thanks to the writer of KnowYourParties, whose descriptions I have borrowed entirely.

Health Australia Party
Rebranding of the Natural Medicine Party, which was probably a better description. Anti-vaxxers, fluoridophobes and homeopaths trying to expand their business via changes to medical legislation.
Their colour theming leaves a lot to be desired. They chose a good template, and then ruined it with their 'Byron Bay' hippy logo. Wasted screen realestate on an image of a bunch of anonymous people (are these their candidates?). OK, on the plus side its clean and clear, unlike their grubby anti-science views.

Seniors United Party of AustraliaFinally, a voice in parliament for the wealthiest generation that ever lived.
I think KnowYourParties description is a little harsh, or maybe that's just because as over 55yoa - they purport to represent my age group! The website looks like some ex IT geek put it together circa 1993 when the Mosaic web browser came out and allowed graphics. Unfortunately this website is comically representative of those they probably wish to recruit.


Family First
But only if your family consists of a white Christian man, a white Christian woman and at least two white Christian children and you believe everyone else is headed straight for hell.
Look, I like orange, and blue is a natural contrast, but this is just horrible - or horribly STRONG. Unfortunately 'Bob Day' sounds like some kind of annual celebration of bobbing for apples, when in fact they are bobbing for Jesus. This site is unrepresentative of what they stand for - no christian iconography anywhere.


Liberal Democrats Headed by David Leyonhjelm, who made it into the Senate in 2013 because of a herd of Lib voters being too stupid to correctly identify their preferred party. The Lib Dems are committed Libertarians whose ability to ignore all of the evidence on every possible issue would make any cult proud. 
Awful logo - and its repeated. Its very hard to carry off yellow on a white background. Did anyone realise that at the centre of this photo - its focus in fact is nothing? I think its meant to be on their leader. That top menu - you just don't see, and the slogan is just not important enough to win my vote - besides the fact that their view of the world is loathsome.

VOTEFLUX.ORG | Upgrade Democracy
 Flux (n) – an abnormal or morbid discharge of blood or other matter from the body. Whenever there’s a bill before the Senate, you use an app to discharge your opinion into a tame crossbencher and tell him (yes, it’s always going to be a him) which way to vote on each bill. Founded by two Bitcoin consultants, and works on the same blockchain principle, whatever the hell that means.
Well, they look like a software company. What's with the black background? Sooo web design circa last millennium. Pretty logo though. Unfortunately that headline reads like a 404 error.


Liberal
You wake up in an ice bath and realise that your left leg is missing, and Rupert Murdoch tells you that brown people and greenies and reds all conspired to steal your leg and are coming back for the rest of your limbs, but then why is Rupert wearing a blood-stained hospital gown, and why does his left leg look familiar, and there, on the knee, isn’t that the scar that you got when you were ten years old and fell off your bicycle?
Well, this is actually well designed in the main. Its responsive, and works well, with the leader front, centre and active. Pity about that horrible medallion logo thingy (WTF! Blue and yellow again!) What function is it meant to perform - an award? a certification? a mark of quality? Or is it just meant to NOT look anything like the Liberal party logo? Malcolm looks very presidential, and there is no sign of those nasty right wing climate deniers and homophobes.

The Nationals
You wake up in a shed and realise that your left leg is missing, and Rupert Murdoch tells you that brown people and greenies and reds all conspired to steal your leg and are coming back for the rest of your limbs, but then why is Rupert wearing a blood-stained hospital gown, and why does his left leg look familiar, and there, on the knee, isn’t that the scar you got when you were ten years old and got kicked by a horse?
Now this is interesting - the nationals take the iconography of the green movement and apply it to their arch enemy's? Given that in all their difficult seats, it is green leaning independents, or actual greenies that are their greatest threat - I expect this adoption of green iconography is intentional. Except for that horrible logo, and the specific shades of green and yellow they have chosen - this looks pretty good. Not that I'd vote for them - given their leader is one of the biggest climate deniers out there. Wise not to feature his image.

Democratic Labour Party (DLP)
If you’re an economic progressive yet somehow still a dyed in the wool Christian homophobe, this is the party for you.
That logo looked old fashioned when Bob Santa Maria commissioned it. Alternatively it looks like the logo used for film awards on advertising. The slogan is soooo dated and fuddyduddy, and about spelling! The graphic representing a subject cloud, without actually being one is very folksy.

Science Party
 Formerly the Future Party. They’re still naïve, but now they’ve got a full quiver of policies, mostly geared toward fixing the shitblizzard of the last three years.
Like the logo - although a bit more finance company than scientific. Love the image - now that's aspirational! On design - they are in contention for my vote.

Australian Cyclists Party
 Does exactly what it says on the box.
Yep - what he said. Logo is good, but could be better. Bit of waisted space at the top there right of the logo. What is it with blue and green? I'd consider voting for them, if some of their number didn't ride like crazed loons on footpaths, and are so un-evolved they don't know what a bicycle bell is for. It's to warn me that you are coming up my arse!

Shooters, Fishers and Farmers
This party is like the time I hurt my back a few years ago and thought the problem would go away like it always had before, except it didn’t and now I live with chronic back pain.
The only thing that is wrong with this logo, is that it should have a big red 45 degree line through that circle! Go and murder some defenceless animal somewhere else you vermin. Annoyingly, other than the appalling logo and social and political views, the website is quite well designed - which I suppose just goes to show that you can't judge a book by its cover. When did they add 'farmers' to their name? Was it when that farmer murdered that environment protection officer? Odious people.

Voluntary Euthanasia Party
As advertised.
Great logo, clever setup, because the power of their campaign is in the power of individual stories. Worthy of support for their design, and for their opinions in my view.

Socialist Alliance
The kind of socialists you can actually have a conversation with.
Well, it had to be red didn't it. The 'vote' message is a bit self evident. They are in need of a good slogan, and all that empty space around the logo is a waste. Other than the words - there is no real visual demonstration of what they stand for. Could do better.

Rise Up Australia Party
The actual worst. Founded by someone who got thrown out of Family First for too much hate speech, which is like getting kicked out of Labor for not doing anything.
This website is pretty foul - which I suppose does reflect the views of the party. The logo is hideous, and the functionality of the website is woeful. Let me give you some examples - it has a loader that tells you the percentage loaded - while you wait and wait (is it a flash site?). When you scroll down (try it if you can bare it) - you just get the tops of each of the candidates heads. I'd give you a screen shot if the party wasn't so vile. Oops, I couldn't resist. The menu is mid page, and has way too many items of varying sizes. On the plus size, it is responsive (unlike their mindset), and uses icons for its policy areas. That is the best thing I can say about the site, and the party.

Labor
The post-war European centre right party for Australia today. 
Not as sophisticated as Liberal, but that heading and logo are so much better. They have an image, where the focus of it is actually on their leader. Slogan good and clear, and I like the 'stand with us' phrase as opposed to 'Vote 1' and their ilk. Solid effort but room for improvement.

Online Direct Democracy – (Empowering the People!)
Like VOTEFLUX, but with PollyWeb instead of the Bitcoin blockchain. (If you say that sentence backwards at the stroke of midnight when the moon is full, Lucifer will appear and grant you three votes on bills that will never get up.) 
As Windows is to Apple - this is to good design. Is that a blue planet in a black hole? At least the're honest - its all about the technology not the people. No, just no.

Derryn Hinch’s Justice Party
It turns out that this is about Derryn Hinch’s notion of justice, not about bringing Derryn Hinch to justice. Which is disappointing. A Federal party campaigning on State issues, implying either ignorance or extreme cynicism. My money is on cynicism.
Derryn, your rich enough to afford better. The logo is ugly and literal. Judge Judy has a better one. This site is a bit of a stinker. I must implement a new rule of web design: never use dot points on a home page. The only honest bit of design is the implication that Derryn is the harbinger of justice - 'Hinch Justice'.

Jacqui Lambie Network
Anatomically incorrect: the logo is a map of Tasmania, but the policy platform is an arsehole. 
Black and orange - a favourite combination of mine. Have you noticed that they have deepetched Jacqui's hair so that it looks like an upside down map of Tasmania? Actually, this, a little like the candidate is straight shooting, without her muddling of words and images.
Pirate Party Australia
Basically progressive, and I agree with them on most things, but their ideas on intellectual property are anti-artist and their views on tax are just idiotic.
Ok, the logo is cute, the pirate ship is cute, the font is good, and the layout good, if a little old fashioned. Its a little staid really - not what you expect from outlaws.

Pauline Hanson’s One NationHave you ever licked a gallbladder?
It galls me to say it, but good logo. Fortunately that is where it stops. Too many stock graphics. No visual breathing space, and justified text. Enough said.


Veterans Party Supporting veterans with no nonsense, no political game playing and absolutely no policies.
Looks more like a recruitment advert for the forces. They always say, one strong image is better than a whole lot of bad ones. Ain't that the truth.

Secular Party of Australia
Basically pretty great, but there are a couple of issues where the commitment to secularism starts to look a little like Islamophobia.
The imagery here just says 'We want your money'. Not sure that is a good way to introduce yourself to the public - unless you're a televangelist. Logo - do I have to say it?

CountryMinded
I don’t agree with everything they say, but I’m not really their target audience. This is essentially the party that the National Party should be.
Blue and green again, really? Badly chosen template, and that logo needs to be shot. With a shotgun.

Socialist Equality Party
Trotskyists. Well-intentioned but fanatical. These are the people who never forgot that Che’s real first name was Ernest.
The site is quite mild mannered in design. That is almost a 'liberal' blue. Nice touches of red though.

Katter’s Australian Party
Uncle Ho and Margaret Thatcher cohabiting in a single mind.
Red, red, red. Reds all over the bed. We already know that Bob is deaf to nuance (shooting . . . Orlando). Apparently he is blind to colour as well. Other than that - a professional website.

Palmer United Party
The earth will shake violently, trees will be uprooted, mountains will fall, and all binds will snap – Palmer will be free. Palmer will go forth with his mouth opened wide, his upper jaw touching the sky and his lower jaw the earth, and he will swallow Odin in a single gulp. Flames will burn from his eyes and nostrils, and his sons will come after to swallow the sun and the moon.
That map of Australia is a crime against cartography, and vexillology (look it up). I love the meaninglessness of the slogan. I am surprised that they are still featuring the image of the morally (and possibly literally) bankrupt Clive.

Citizens Electoral Council
Possibly just straight-up insane. Climate deniers, but economically kinda socialist. Anti-Semitic and possibly white supremacist, but pro-immigration. They also claim that the Port Arthur massacre was commissioned by the British royal family and implemented by a mental health NGO.
Worst political website for this election. I would say it was designed by a server engineer, but that would be unfair to the design skills of server engineers. Just all types of wrong, which I suppose reflects their policies.

Australian Motoring Enthusiast Party
The Eddie the Eagle of befuddled right-wing governance.
Blue and green again. Is this a thing? Other than that, if you can't design a good logo, just use the words - and they did (I'm ignoring the ubiquitous southern cross on the wrong angle at the top).

Animal Justice Party
Better people than me.
. . . and not to be confused with Animal Farm Justice Party. Logo looks like The Wilderness Society for animals. I know the image is about live exports, but cute cat video's are more loveable.

The Arts Party
Sound policies, surprisingly shitty logo. Come on Arts Party, you had one job to do.
What he said. One job. Menu wrapping is a crime.

Non-Custodial Parents Party (Equal Parenting)
Fielded candidates for the last six Federal elections. Seventh time lucky, guys.
Couldn't organise a supervised visit - let alone a live website.

Mature Australia
Your racist Western Australian aunt.
OK this screen grab doesn't do it justice - looks like I timed it badly. Pretty logo, but what he said about the views. '2 cent tax' - they can't add up.

Christian Democratic Party (Fred Nile Group)
The party’s charter is just a bunch of bible quotes. It’s like we’re in Pennsylvania in the fucking 17th Century.
They bought a good wordpress template, and a good shot of parliament house. Pity they didn't spend as much money or care on their depressingly unimaginative, and proportionally challenged logo.

Australian Sex Party
Are you turned on by sound economic and social policies with a strong evidence basis? Then number the box and put your ballot in the slot.
OK, you did well with the logo, but seriously - an industry that has some of the most imaginatively designed sex websites and you came up with this? Its definitely not sexy, and I'm not sure it makes people take you seriously either.

Australian Progressives
A broad suite of evidence-based best practice policies that only seems progressive because Australia is such a regressive ideological clusterfuck.
Great site - get rid of that horror of a logo.  It doesn't say 'progressive'. It says . . . oh sorry I fell asleep with a pen in my hand.


Nick Xenophon Team
A bit far to the right for me personally, but Xenophon has done exactly what an independent senator is supposed to do, and pretty close to exactly what he said he would do. Which is refreshing.
Oh South Australia, you are such contrarians, but you always did have good food, and good arts. You win a boutique non-industrial prize for the orange and black combo, and a reneable power commendation for making a name like 'Xenophon' into a brand.

Drug Law Reform
Single issue party focused on treating drug use as a health issue rather than a criminal one. The stance seems well reasoned. It’s just a bit hard to take them seriously when their logo is a hemp leaf.
What he said about the logo. Some terrible images in that carousel, including a quote from Richard Branson. The green isn't even pretty.

Sustainable Australia
Formerly the Stable Population Party. They want a ‘sustainable’ population through lower immigration. If they actually cared about sustainability they’d be calling for a lower global population, but instead they’re calling for reduced population growth in a country with only 24 million people. Which means that what they are is simply racist.
Loathsome website, loathsome policies, loathsome logos.

The Greens
Yes, they wear suits now, but at least those suits are made from sustainable bamboo in a small Liberian social enterprise that sponsors education initiatives for orphaned girls.
I want to love the greens, but they have three things I am having trouble coming to grips with. The logo (OK, I can nearly forgive, as it has become their brand); this website (which commits several crimes against font usage, colour, and layout), and Lee Rhiannon. I support their ethos, but some of their policies (their small business policy from the last election seems to have disappeared) are just naive - like the design - those icons especially.

Australian Liberty Alliance
Angry Anderson (remember him? didn’t think so) vowing to stop the Islamisation of Australia. Last time I checked, Islam was holding steady at 2.2% of the population, so maybe one bald dickhead is all it takes to hold the hordes at bay.
A site designed last decade I think - or from when Angry Anderson last had a hit. Don't start me on the logo.

Renewable Energy Party
Single issue, seems good prima facie, but founded by Peter Breen, who was Ricky Muir’s only staffer for a time. I can’t figure out whether this is a good sign (Breen taught Muir how to be a halfway decent senator) or a terrible sign (how can someone go from the petrolhead party to a renewables party and expect to be believed?).
Like the look of this - simple and clean. Like clean energy - it takes a lot of work to make something look this simple.

Marijuana (HEMP) Party
Entirely about legalising weed, and there’s no suggestion that they’ve thought about a policy position on any other issues. My concern is that they’d side with anyone who takes snacks into the chamber
The design got all to hard, so they went for a smoke. Cheap shot, I know - but look at that site. Green and yellow. Really.

Anti-paedophile Party
Fair enough, but they’re also anti-sex education. So they’re imbeciles.
Unfortunately, this website looks as creepy as the people they say they oppose.


Oh, I'm exhausted! Believe me, this is more exhausting than actually filling out the Senate voting tablecloth.  Good luck tomorrow (June 2nd), and read the voting instructions, because they have changed.

I'm just looking forward to the time when the politicians of the two major parties work out that Australians do support smaller parties, and quite like when they have to discuss things with each other and argue policy. They actually don't like their government to be in total control like fascists. They like it when there is a multi-party approach to government.

Happy voting.



          ICO fundraising continues despite US regulatory warning        

moneyWe’ve been writing a bit more about initial coin offerings (ICOs) recently. In the blockchain world, they’re a way for a startup to raise money by creating and selling their own cryptocurrencies, without having to run the gamut of regulations that a traditional IPO would have to.

Or at least, that was the theory: a recent statement from US financial regulator the SEC warned that a number of ICOs may still fall foul of its rules.

The New York Times has a good roundup of the reaction from the companies planning ICOs, which is essentially to carry on regardless.

The post ICO fundraising continues despite US regulatory warning appeared first on Music Ally.


          Citizen Ticket to launch blockchain-based ticketing platform        

crowdBritish startup Citizen Ticket is the latest company trying to put a dent in online ticket-touting. And like Dutch firm Guts Tickets, it’s using blockchain technology to do it.

The company has completed a beta test of its service at small-to-medium music events in the UK in recent months, as well as a stress test at one 100,000-capacity event.

Citizen Ticket is using the Ethereum blockchain to power its sales of ‘BitTickets’ which it says are protected from touting.

The post Citizen Ticket to launch blockchain-based ticketing platform appeared first on Music Ally.


          Jaak announces first blockchain pilot with Viacom        

jaakBritish blockchain startup Jaak has plans to work with music rightsholders and collecting societies in the near future. But its first pilot is with a company outside the music industry: MTV’s parent company Viacom.

Jaak is working with Viacom International Media Networks UK on a pilot using its META metadata network, which taps blockchain platforms Ethereum and Swarm to provide decentralised storage for media companies.

Jaak says that the plan with Viacom is to “explore micro-licensing and content syndication”, with CEO Vaughn McKenzie saying the announcement brings Jaak “one step closer to our first public alpha release”.

The post Jaak announces first blockchain pilot with Viacom appeared first on Music Ally.


          Finance - The CEO Of NEO Banks On Blockchain To Build A Smart Economy        
Da Hongfei, the co-founder and CEO of blockchain group NEO, argues that to truly build a smart economy, industries from ecommerce to finance, must harness and embrace the power...
          Futurology – Blockchain & Universal Basic Income        
The Futurology Team chats to Justin McCarthy, a director at Project UBU, a potentially game-changing startup that brings together Universal Basic Income (#UBI) and Blockchain technology. Project UBU asks you to “Imagine a world in which we can cater for the basic economic needs of everyone”. It’s a very very big idea whose time has come to see what’s possible and explores new and different ways of doing things. If you want to disrupt yourself, listen in to this show.
          Futurology – The Future of Fintech: Building on Blockchain        
The Futurology team chats to Strate CEO, Monica Singer, about how Strate is using Blockchain for the electronic settlement of financial instruments in South Africa (bonds, money markets, equities).
          A Response to Blockchains’ Critics: Issues of Scale, Transparency and Threats to Intermediaries        
Blockchain technology has been called the next internet, revolutionary and transformative. Such grandiose terms may be applicable, but these descriptions also attract skeptics. Some of the most-oft-voiced criticisms of […]
          Comment on Bad manners, blockchains, open data, government as a platform and and Birmingham pigs in muck. by Lorna Prescott        
Nice post Nick. I was a bit excited to hear that the voluntary sector somewhere might be experimenting with blockchain, so went off noodling around for more info on HullCoin. I was a bit disappointed that it seems to have started off as essentially payment for ‘volunteering’, which raised all sorts of questions. Or perhaps that’s simply the way the Guardian journalist thought they had to describe it, so that readers would understand (http://www.theguardian.com/cities/2016/apr/22/hullcoin-bitcoin-volunteers-new-way-pay). Only at the end of the article do they suggest a much bigger picture: "HullCoin, they say, could one day become the ‘blood supply’ of a growing collaborative economy, which extends from locally grown food projects to collective purchasing and savings networks, providing an economic safety net for hard times and new opportunities for good.” I know personal stories are important, and people connect with them and so on, but I think in cases like this we all need to take the time to have our head hurt, as the story about mopping a floor in exchange for a cup of tea really doesn’t do any credit to the thinking which is obviously going on behind HullCoin. (I note that the HullCoin website doesn’t use the term ‘volunteering’.) Much as you are frustrated by the polite government meetings which stifle change, I’m left feeling frustrated by the limited and limiting ways we have to talk about and understand participation, contribution and collaborative economies. I think this stifles change too, by hiding from people what is possible.
          Comment on Bad manners, blockchains, open data, government as a platform and and Birmingham pigs in muck. by Nick Booth        
Will you were right to hand it on - indeed sometimes it's important to share the load. I got some stuff out of it, not least a better insight into what you had been dealing with for years. But it wasn't all bad by any means, just the will for change where the power sat was weak. Oh and thanks for reading.
          Comment on Bad manners, blockchains, open data, government as a platform and and Birmingham pigs in muck. by william perrin        
So sorry for handing on the post on the local govt open data panel. I agree strongly with tom's argument, there isn't enough table banging. however when i moved to the 'crime and justice sector transparency panel' (what do you mean you haven't heard of it) i tried a more forthright approach and it got me somewhere, but not very far, the civil service is good at managing dyspeptic campaigners.
          Data You Can Trust: Blockchain Technology.        
Air & Space Power Journal; 06/01/2017
(AN 123448757); ISSN: 1555385X
Military & Government Collection
          How Bitcoin And Blockchain Will Impact The Cybersecurity Industry        

Source: National Cyber Security - Produced By Gregory Evans

From global power outages to international hacking schemes to run-of-the-mill data breaches, protecting sensitive data has never been more important than it is today. In order for companies to keep their data secure, their cybersecurity teams must stay ahead of the newest technologies being used by both consumers and hackers....

The post How Bitcoin And Blockchain Will Impact The Cybersecurity Industry appeared first on National Cyber Security Ventures.


          Enterprises look for partners to make the most of Microsoft Azure Stack apps        
The next BriefingsDirect Voice of the Customer hybrid cloud advancements discussion explores the application development and platform-as-a-service (PaaS) benefits from Microsoft Azure Stack

We’ll now learn how ecosystems of solutions partners are teaming to provide specific vertical industries with applications and services that target private cloud deployments.

Listen to the podcast. Find it on iTunes. Get the mobile app. Read a full transcript or download a copy.

Here to help us explore the latest in successful cloud-based applications development and deployment is our panel, Martin van den Berg, Vice President and Cloud Evangelist at Sogeti USA, based in Cleveland, and Ken Won, Director of Cloud Solutions Marketing at Hewlett Packard Enterprise (HPE). The discussion is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: Martin, what are some of the trends that are driving the adoption of hybrid cloud applications specifically around the Azure Stack platform?

Van den Berg: What our clients are dealing with on a daily basis is an ever-expanding data center, they see ever-expanding private clouds in their data centers. They are trying to get into the hybrid cloud space to reap all the benefits from both an agility and compute perspective.

van den Berg

They are trying to get out of the data center space, to see how the ever-growing demand can leverage the cloud. What we see is that Azure Stack will bridge the gap between the cloud that they have on-premises, and the public cloud that they want to leverage -- and basically integrate the two in a true hybrid cloud scenario.

Gardner: What sorts of applications are your clients calling for in these clouds? Are these cloud-native apps, greenfield apps? What are they hoping to do first and foremost when they have that hybrid cloud capability?

Van den Berg: We see a couple of different streams there. One is the native-cloud development. More and more of our clients are going into cloud-native development. We recently brought out a white paper wherein we see that 30 percent of applications being built today are cloud-native already. We expect that trend to grow to more than 60 percent over the next three years for new applications.

HPE Partnership Case Studies
of Flex Capacity Financing

The issue that some of our clients have has to do with some of the data being consumed in these applications. Either due to compliance issues, or that their information security divisions are not too happy, they don’t want to put this data in the public cloud. Azure Stack bridges that gap as well.
 
They can leverage the whole Azure public cloud PaaS while still having their data on-premises in their own data center. That's a unique capability.
Microsoft Azure Stack can bridge the gap between the on-premises data center and what they do in the cloud. They can leverage the whole Azure public cloud PaaS while still having their data on-premises in their own data center. That's a unique capability.

On the other hand, what we also see is that some of our clients are looking at Azure Stack as a bridge to gap the infrastructure-as-a-service (IaaS) space. Even in that space, where clients are not willing to expand their own data center footprint, they can use Azure Stack as a means to seamlessly go to the Azure public IaaS cloud.

Gardner: Ken, does this jibe with what you are seeing at HPE, that people are starting to creatively leverage hybrid models? For example, are they putting apps in one type of cloud and data in another, and then also using their data center and expanding capacity via public cloud means?

Won

Won: We see a lot of it. The customers are interested in using both private clouds and public clouds. In fact, many of the customers we talk to use multiple private clouds and multiple public clouds. They want to figure out how they can use these together -- rather than as separate, siloed environments. The great thing about Azure Stack is the compatibility between what’s available through Microsoft Azure public cloud and what can be run in their own data centers.

The customer concerns are data privacy, data sovereignty, and security. In some cases, there are concerns about application performance. In all these cases, it's a great situation to be able to run part or all of the application on-premises, or on an Azure Stack environment, and have some sort of direct connectivity to a public cloud like Microsoft Azure.

Because you can get full API compatibility, the applications that are developed in the Azure public cloud can be deployed in a private cloud -- with no change to the application at all.

Gardner: Martin, are there specific vertical industries gearing up for this more than others? What are the low-lying fruit in terms of types of apps?

Hybrid healthcare files

Van den Berg: I would say that hybrid cloud is of interest across the board, but I can name a couple of examples of industries where we truly see a business case for Azure Stack.

One of them is a client of ours in the healthcare industry. They wanted to standardize on the Microsoft Azure platform. One of the things that they were trying to do is deal with very large files, such as magnetic resonance imaging (MRI) files. What they found is that in their environment such large files just do not work from a latency and bandwidth perspective in a cloud.

With Microsoft Azure Stack, they can keep these larger files on-premises, very close to where they do their job, and they can still leverage the entire platform and still do analytics from a cloud perspective, because that doesn’t require the bandwidth to interact with things right away. So this is a perfect example where Azure Stack bridges the gap between on-premises and cloud requirements while leveraging the entire platform.

Gardner: What are some of the challenges that these organizations are having as they move to this model? I assume that it's a little easier said than done. What's holding people back when it comes to taking full advantage of hybrid models such as Azure Stack?

Van den Berg: The level of cloud adoption is not really yet where it should be. A lot of our clients have cloud strategies that they are implementing, but they don't have a lot of expertise yet on using the power that the platform brings.

Some of the basic challenges that we need to solve with clients are that they are still dealing with just going to Microsoft Azure cloud and the public cloud services. Azure Stack simplifies that because they now have the cloud on-premises. With that, it’s going to be easier for them to spin-up workload environments and try this all in a secure environment within their own walls, their own data centers.

Should a specific workload go in a private cloud, or should another workload go in a public cloud?
Won: We see a similar thing with our client base as customers look to adopt hybrid IT environments, a mix of private and public clouds. Some of the challenges they have include how to determine which workload should go where. Should a specific workload go in a private cloud, or should another workload go in a public cloud?

We also see some challenges around processes, organizational process and business process. How do you facilitate and manage an environment that has both private and public clouds? How do you put the business processes in place to ensure that they are being used in the proper way? With Azure Stack -- because of that full compatibility with Azure -- it simplifies the ability to move applications across different environments.

Gardner: Now that we know there are challenges, and that we are not seeing the expected adoption rate, how are organizations like Sogeti working in collaboration with HPE to give a boost to hybrid cloud adoption?

Strategic, secure, scalable cloud migration 

Van den Berg: As the Cloud Evangelist with Sogeti, for the past couple of years I have been telling my clients that they don’t need a data center. The truth is, they probably need some form of on-premises still. But the future is in the clouds, from a scalability and agility perspective -- and the hyperscale with which Microsoft is building out their Azure cloud capabilities, there are no enterprise clients that can keep up with that. 

We try to help our clients define strategy, help them with governance -- how do they approach cloud and what workloads can they put where based on their internal regulations and compliance requirements, and then do migration projects.
The future is in the clouds, from a scalability and agility perspective.

We have a service offering called the Sogeti Cloud Assessment, where we go in and evaluate their application portfolio on their cloud readiness. At the end of this engagement, we start moving things right away. We have been really successful with many of our clients in starting to move workloads to the cloud.

Having Azure Stack will make that even easier. Now when a cloud assessment turns up some issues on moving the Microsoft Azure public cloud -- because of compliance or privacy issues or just comfort (sometimes the information security departments just don't feel comfortable moving certain types of data to a public cloud setting) -- we can move those applications to the cloud, leverage the full power and scalability of the cloud while keeping it within the walls of our clients’ data centers. That’s how we are trying to accelerate the cloud adoption, and we truly feel that Azure Stack bridges that gap.

HPE Partnership Case Studies
of Flex Capacity Financing

Gardner: Ken, same question, how are you and Sogeti working together to help foster more hybrid cloud adoption?

Won: The cloud market has been maturing and growing. In the past, it’s been somewhat complicated to implement private clouds. Sometimes these private clouds have been incompatible with each other, and with the public clouds.

In the Azure Stack area, now we have almost an appliance-like experience where we have systems that we build in our factories that we pre-configure, pretest, and get them into the customers’ environment so that they can quickly get their private cloud up and running. We can help them with the implementation, set it up so that Sogeti can help with the cloud-native applications work.
 
With Sogeti and HPE working together, we make it much simpler for companies to adopt the hybrid cloud models and to quickly see the benefit of moving into a hybrid environment.
Sogeti and HPE work together to make it much simpler for companies to adopt the hybrid cloud models.

Van den Berg: In talking to many of our clients, when we see the adoption of private cloud in their organizations -- if they are really honest -- it doesn't go very far past just virtualization. They truly haven't leveraged what cloud could bring, not even in a private cloud setting.

So talking about hybrid cloud, it is very hard for them to leverage the power of hybrid clouds when their own private cloud is just virtualization. Azure Stack can help them to have a true private cloud within the walls of their own data centers and so then also leverage everything that Microsoft Azure public cloud has to offer.

Won: I agree. When they talk about a private cloud, they are really talking about virtual  machines, or virtualization. But because the Microsoft Azure Stack solution provides built-in services that are fully compatible with what's available through Microsoft Azure public cloud, it truly provides the full cloud experience. These are the types of services that are beyond just virtualization running within the customers’ data center.

Keep IT simple

I think Azure Stack adoption will be a huge boost to organizations looking to implement private clouds in their data centers.

Gardner: Of course your typical end-user worker is interested primarily their apps, they don’t really care where they are running. But when it comes to getting new application development, rapid application development (RAD), these are some of the pressing issues that most businesses tell us concern them.

So how does RAD, along with some DevOps benefits, play into this, Martin? How are the development people going to help usher in cloud and hybrid cloud models because it helps them satisfy the needs of the end-users in terms of rapid application updates and development?

Van den Berg: This is also where we are talking about the difference between virtualization, private cloud, hybrid clouds, and definitely cloud services. So for the application development staff, they still run in the traditional model, they still run into issues in provisioning of their development environments and sometimes test environments.

A lot of cloud-native application development projects are much easier because you can spin-up environments on the go. What Azure Stack is going to help with is having that environment within the client’s data center; it’s going to help the developers to spin up their own resources.

There is going to be on-demand orchestration and provisioning, which is truly beneficial to application development -- and it's really beneficial to the whole DevOps suite.

There is going to be on-demand orchestration and provisioning, which is truly beneficial to application development -- and it's really beneficial to the whole DevOps suite
We need to integrate business development and IT operations to deliver value to our clients. If we are waiting multiple weeks for development and the best environment to spin up -- that’s an issue our clients are still dealing with today. That’s where Azure Stack is going to bridge the gap, too.

Won: There are a couple of things that we see happening that will make developers much more productive and able to bring new applications or updates quicker than ever before. One is the ability to get access to these services very, very quickly. Instead of going to the IT department and asking them to spin up services, they will be able to access these services on their own.

The other big thing that Azure Stack offers is compatibility between private and public cloud environments. For the first time, the developer doesn't have to worry about what the underlying environment is going to be. They don’t have to worry about deciding, is this application going to run in a private cloud or a public cloud, and based on where it’s going, do they have to use a certain set of tools for that particular environment.

Now that we have compatibility between the private cloud and the public cloud, the developer can just focus on writing code, focus on the functionality of the application they are developing, knowing that that application now can easily be deployed into a private cloud or a public cloud depending on the business situation, the security requirements, and compliance requirements.

So it’s really about helping the developers become more effective and helping them focus more on code development and applications rather than having them worry about the infrastructure, or waiting for infrastructure to come from the IT department.

HPE Partnership Case Studies
of Flex Capacity Financing

Gardner: Martin, for those organizations interested in this and want to get on a fast track, how does an organization like Sogeti working in collaboration with HPE help them accelerate adoption?

Van den Berg: This is where we heavily partner with HPE, to bring the best solutions to our clients. We have all kinds of proof of concepts, we have accelerators, and one of the things that we talked about already is making developers get up to speed faster. We can truly leverage those accelerators and help our clients adopt cloud, and adopt all the services that are available on the hybrid platform.

We have all heard the stories about standardizing on micro-services, on a server fabric, or serverless computing, but developers have not had access to this up until now and IT departments have been slow to push this to the developers.

The accelerators that we have, the approaches that we have, and the proofs of concept that we can do with our client -- together with HPE --  are going to accelerate cloud adoption with our clientele. 

Gardner: Any specific examples, some specific vertical industry use-cases where this really demonstrates the power of the true hybrid model?

When the ship comes in

Won: I can share a couple of examples of the types of companies that we are working with in the hybrid area, and what places that we see typical customers using Azure Stack.

People want to implement disconnected applications or edge applications. These are situations where you may have a data center or an environment running an application that you may either want to run in a disconnected fashion or run to do some local processing, and then move that data to the central data center.

One example of this is the cruise ship industry. All large cruise ships have essentially data centers running the ship, supporting the thousands of customers that are on the ship. What the cruise line vendors want to do is put an application on their many ships and to run the same application in all of their ships. They want to be able to disconnect from connectivity of the central data center while the ship is out at sea and to do a lot of processing and analytics in the data center, in the ship. Then when the ship comes in and connects to port and to the central data center, it only sends the results of the analysis back to the central data center.

This is a great example of having an application that can be developed once and deployed in many different environments, you can do that with Azure Stack. It’s ideal, running that same application in multiple different environments, in either disconnected or connected situations.

Van den Berg: In the financial services industry, we know they are heavily regulated. We need to make sure that they are always in compliance.

So one of the things that we did in the financial services industry with one of our accelerators, we actually have a tool called Sogeti OneShare. It’s a portal solution on top of Microsoft Azure that can help you with orchestration, which can help you with the whole DevOps concept. We were able to have the edge node be Azure Stack -- building applications, have some of the data reside within the data center on the Azure Stack appliance, but still leverage the power of the clouds and all the analytics performance that was available there.

That's what DevOps is supposed to deliver -- faster value to the business, leveraging the power of clouds.
Van den Berg: In talking to many of our clients, when we see the adoption of private cloud in their organizations -- if they are really honest -- it doesn't go very far past just virtualization. They truly haven't leveraged what cloud could bring, not even in a private cloud setting.

So talking about hybrid cloud, it is very hard for them to leverage the power of hybrid clouds when their own private cloud is just virtualization. Azure Stack can help them to have a true private cloud within the walls of their own data centers and so then also leverage everything that Microsoft Azure public cloud has to offer. We just did a project in this space and we were able to deliver functionality to the business from start of the project in just eight weeks. They have never seen that before -- the project that just lasts eight weeks and truly delivers business value. That's the direction that we should be taking. That’s what DevOps is supposed to deliver -- faster value to the business, leveraging the power of clouds.

Gardner: Perhaps we could now help organizations understand how to prepare from a people, process, and technology perspective to be able to best leverage hybrid cloud models like Microsoft Azure Stack.

Martin, what do you suggest organizations do now in order to be in the best position to make this successful when they adopt?

Be prepared

Van den Berg: Make sure that the cloud strategy and governance are in place. That's one of the first things this should always start with.

Then, start training developers, and make sure that the IT department is the broker of cloud services. In the traditional sense, it is always normal that the IT department is the broker for everything that is happening on-premises within the data center. In the cloud space, this doesn’t always happen. In the cloud space, because it is so easy to spin-up things, sometimes the line of business is deploying.

We try to enable IT departments and operators within our clients to be the broker of cloud services and to help with the adoption of Microsoft Azure cloud and Azure Stack. That will help bridge the gap between the clouds and the on-premises data centers.

Gardner: Ken, how should organizations get ready to be in the best position to take advantage of this successfully?

Mapping the way

Won: As IT organizations look at this transformation to hybrid IT, one of the most important things is to have a strong connection to the line of business and to the business goals, and to be able to map those goals to strategic IT priorities.

Once you have done this mapping, the IT department can look at these goals and determine which projects should be implemented and how they should be implemented. In some cases, they should be implemented in private clouds, in some cases public clouds, and in some cases across both private and public cloud.

The task then changes to understanding the workloads, the characterization of the workloads, and looking at things such as performance, security, compliance, risk, and determining the best place for that workload.

Then, it’s finding the right platform to enable developers to be as successful and as impactful as possible, because we know ultimately the big game changer here is enabling the developers to be much more productive, to bring applications out much faster than we have ever seen in the past.

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          How Imagine Communications leverages edge computing and HPC for live multiscreen IP video         
The next BriefingsDirect Voice of the Customer HPC and edge computing strategies interview explores how a video delivery and customization capability has moved to the network edge -- and closer to consumers -- to support live, multi-screen Internet Protocol (IP) entertainment delivery. 
 
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We’ll learn how hybrid technology and new workflows for IP-delivered digital video are being re-architected -- with significant benefits to the end-user experience, as well as with new monetization values to the content providers.

Our guest is Glodina Connan-Lostanlen, Chief Marketing Officer at Imagine Communications in Frisco, Texas. The discussion is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: Your organization has many major media clients. What are the pressures they are facing as they look to the new world of multi-screen video and media?

Connan-Lostanlen: The number-one concern of the media and entertainment industry is the fragmentation of their audience. We live with a model supported by advertising and subscriptions that rely primarily on linear programming, with people watching TV at home.

Connan-Lostanlen

And guess what? Now they are watching it on the go -- on their telephones, on their iPads, on their laptops, anywhere. So they have to find the way to capture that audience, justify the value of that audience to their advertisers, and deliver video content that is relevant to them. And that means meeting consumer demand for several types of content, delivered at the very time that people want to consume it.  So it brings a whole range of technology and business challenges that our media and entertainment customers have to overcome. But addressing these challenges with new technology that increases agility and velocity to market also creates opportunities.

For example, they can now try new content. That means they can try new programs, new channels, and they don’t have to keep them forever if they don’t work. The new models create opportunities to be more creative, to focus on what they are good at, which is creating valuable content. At the same time, they have to make sure that they cater to all these different audiences that are either static or on the go.

This is a major, perhaps once-in-a-generation, level of change -- when you go to fully digital, IP delivered content.
Gardner: The media industry has faced so much change over the past 20 years, but this is a major, perhaps once-in-a-generation, level of change -- when you go to fully digital, IP-delivered content.

As you say, the audience is pulling the providers to multi-screen support, but there is also the capability now -- with the new technology on the back-end -- to have much more of a relationship with the customer, a one-to-one relationship and even customization, rather than one-to-many. Tell us about the drivers on the personalization level.

Connan-Lostanlen: That’s another big upside of the fragmentation, and the advent of IP technology -- all the way from content creation to making a program and distributing it. It gives the content creators access to the unique viewers, and the ability to really engage with them -- knowing what they like -- and then to potentially target advertising to them. The technology is there. The challenge remains about how to justify the business model, how to value the targeted advertising; there are different opinions on this, and there is also the unknown or the willingness of several generations of viewers to accept good advertising.

That is a great topic right now, and very relevant when we talk about linear advertising and dynamic ad insertion (DAI). Now we are able to -- at the very edge of the signal distribution, the video signal distribution -- insert an ad that is relevant to each viewer, because you know their preferences, you know who they are, and you know what they are watching, and so you can determine that an ad is going to be relevant to them.

But that means media and entertainment customers have to revisit the whole infrastructure. It’s not necessary rebuilding, they can put in add-ons. They don’t have to throw away what they had, but they can maintain the legacy infrastructure and add on top of it the IP-enabled infrastructure to let them take advantage of these capabilities.

Gardner: This change has happened from the web now all the way to multi-screen. With the web there was a model where you would use a content delivery network (CDN) to take the object, the media object, and place it as close to the edge as you could. What’s changed and why doesn’t that model work as well?

Connan-Lostanlen: I don’t know yet if I want to say that model doesn’t work anymore. Let’s let the CDN providers enhance their technology. But for sure, the volume of videos that we are consuming everyday is exponentially growing. That definitely creates pressure in the pipe. Our role at the front-end and the back-end is to make sure that videos are being created in different formats, with different ads, and everything else, in the most effective way so that it doesn’t put an undue strain on the pipe that is distributing the videos.

We are being pushed to innovate further on the type of workflows that we are implementing at our customers’ sites today, to make it efficient, to not leave storage at the edge and not centrally, and to do transcoding just-in-time. These are the things that are being worked on. It’s a balance between available capacity and the number of programs that you want to send across to your viewers – and how big your target market is.

Why not design the whole workflow digital-first?
The task for us on the back-end is to rethink the workflows in a much more efficient way. So, for example, this is what we call the digital-first approach, or unified distribution. Instead of planning a linear channel that goes the traditional way and then adding another infrastructure for multi-screen, on all those different platforms and then cable, and satellite, and IPTV, etc. -- why not design the whole workflow digital-first. This frees the content distributor or provider to hold off on committing to specific platforms until the video has reached the edge. And it’s there that the end-user requirements determine how they get the signal.

This is where we are going -- to see the efficiencies happen and so remove the pressure on the CDNs and other distribution mechanisms, like over-the-air.

Solutions from HPE

Gardner: It means an intelligent edge capability, whereas we had an intelligent core up until now. We’ll also seek a hybrid capability between them, growing more sophisticated over time.

We have a whole new generation of technology for video delivery. Tell us about Imagine Communications. How do you go to market? How do you help your customers?

Education for future generations

Connan-Lostanlen: Two months ago we were in Las Vegas for our biggest tradeshow of the year, the NAB Show. At the event, our customers first wanted to understand what it takes to move to IP -- so the “how.” They understand the need to move to IP, to take advantage of the benefits that it brings. But how do they do this, while they are still navigating the traditional world?

It’s not only the “how,” it’s needing examples of best practices. So we instructed them in a panel discussion, for example, on Over the Top Technology (OTT), which is another way of saying IP-delivered, and what it takes to create a successful multi-screen service. Part of the panel explained what OTT is, so there’s a lot of education.

There is also another level of education that we have to provide, which is moving from the traditional world of serial digital interfaces (SDIs) in the broadcast industry to IP. It’s basically saying analog video signals can be moved into digital. Then not only is there a digitally sharp signal, it’s an IP stream. The whole knowledge about how to handle IP is new to our own industry, to our own engineers, to our own customers. We also have to educate on what it takes to do this properly.

One of the key things in the media and entertainment industry is that there’s a little bit of fear about IP, because no one really believed that IP could handle live signals. And you know how important live television is in this industry – real-time sports and news -- this is where the money comes from. That’s why the most expensive ads are run during the Super Bowl.

It’s essential to be able to do live with IP – it’s critical. That’s why
It's essential to be able to do live with IP -- it's critical.
we are sharing with our customers the real-life implementations that we are doing today.

We are also pushing multiple standards forward. We work with our competitors on these standards. We have set up a trade association to accelerate the standards work. We did all of that. And as we do this, it forces us to innovate in partnership with customers and bring them on board. They are part of that trade association, they are part of the proof-of-concept trials, and they are gladly sharing their experiences with others so that the transition can be accelerated.

Gardner: Imagine Communications is then a technology and solutions provider to the media content companies, and you provide the means to do this. You are also doing a lot with ad insertion, billing, in understanding more about the end-user and allowing that data flow from the edge back to the core, and then back to the edge to happen.

At the heart of it all

Connan-Lostanlen: We do everything that happens behind the camera -- from content creation all the way to making a program and distributing it. And also, to your point, on monetizing all that with a management system. We have a long history of powering all the key customers in the world for their advertising system. It’s basically an automated system that allows the selling of advertising spots, and then to bill them -- and this is the engine of where our customers make money. So we are at the heart of this.

We are in the prime position to help them take advantage of the new advertising solutions that exist today, including dynamic ad insertion. In other words, how you target ads to the single viewer. And the challenge for them is now that they have a campaign, how do they design it to cater both to the linear traditional advertising system as well as the multi-screen or web mobile application? That's what we are working on. We have a whole set of next-generation platforms that allow them to take advantage of both in a more effective manner.

Gardner: The technology is there, you are a solutions provider. You need to find the best ways of storing and crunching data, close to the edge, and optimizing networks. Tell us why you choose certain partners and what are the some of the major concerns you have when you go to the technology marketplace?

Connan-Lostanlen: One fundamental driver here, as we drive the transition to IP in this industry, is in being able to rely on consumer-off-the-shelf (COTS) platforms. But even so, not all COTS platforms are born equal, right?

For compute, for storage, for networking, you need to rely on top-scale hardware platforms, and that’s why about two years ago we started to work very closely with Hewlett Packard Enterprise (HPE) for both our compute and storage technology.

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We develop the software appliances that run on those platforms, and we sell this as a package with HPE. It’s been a key value proposition of ours as we began this journey to move to IP. We can say, by the way, our solutions run on HPE hardware. That's very important because having high-performance compute (HPC) that scales is critical to the broadcast and media industry. Having storage that is highly reliable is fundamental because going off the air is not acceptable. So it's 99.9999 percent reliable, and that’s what we want, right?

It’s a fundamental part of our message to our customers to say, “In your network, put Imagine solutions, which are powered by one of the top compute and storage technologies.”

Gardner: Another part of the change in the marketplace is this move to the edge. It’s auspicious that just as you need to have more storage and compute efficiency at the edge of the network, close to the consumer, the infrastructure providers are also designing new hardware and solutions to do just that. That's also for the Internet of Things (IoT)requirements, and there are other drivers. Nonetheless, it's an industry standard approach.

What is it about HPE Edgeline, for example, and the architecture that HPE is using, that makes that edge more powerful for your requirements? How do you view this architectural shift from core data center to the edge?

Optimize the global edge

Connan-Lostanlen: It's a big deal because we are going to be in a hybrid world. Most of our customers, when they hear about cloud, we have to explain it to them. We explain that they can have their private cloud where they can run virtualized applications on-premises, or they can take advantage of public clouds.

Being able to have a hybrid model of deployment for their applications is critical, especially for large customers who have operations in several places around the globe. For example, such big names as Disney, Turner –- they have operations everywhere. For them, being able to optimize at the edge means that you have to create an architecture that is geographically distributed -- but is highly efficient where they have those operations. This type of technology helps us deliver more value to the key customers.

Gardner: The other part of that intelligent edge technology is that it has the ability to be adaptive and customized. Each region has its own networks, its own regulation, and its own compliance, security, and privacy issues. When you can be programmatic as to how you design your edge infrastructure, then a custom-applications-orientation becomes possible.

Is there something about the edge architecture that you would like to see more of? Where do you see this going in terms of the capabilities of customization added-on to your services?

Connan-Lostanlen: One of the typical use-cases that we see for those big customers who have distributed operations is that they like to try and run their disaster recovery (DR) site in a more cost-effective manner. So the flexibility that an edge architecture provides to them is that they don’t have to rely on central operations running DR for everybody. They can do it on their own, and they can do it cost-effectively. They don't have to recreate the entire infrastructure, and so they do DR at the edge as well.

We especially see this a lot in the process of putting the pieces of the program together, what we call “play out,” before it's distributed. When you create a TV channel, if you will, it’s important to have end-to-end redundancy -- and DR is a key driver for this type of application.

Gardner: Are there some examples of your cutting-edge clients that have adopted these solutions? What are the outcomes? What are they able to do with it?

Pop-up power

Connan-Lostanlen: Well, it’s always sensitive to name those big brand names. They are very protective of their brands. However, one of the top ones in the world of media and entertainment has decided to move all of their operations -- from content creation, planning, and distribution -- to their own cloud, to their own data center.

They are at the forefront of playing live and recorded material on TV -- all from their cloud. They needed strong partners in data centers. So obviously we work with them closely, and the reason why they do this is simply to really take advantage of the flexibility. They don't want to be tied to a restricted channel count; they want to try new things. They want to try pop-up channels. For the Oscars, for example, it’s one night. Are you going to recreate the whole infrastructure if you can just check it on and off, if you will, out of their data center capacity? So that's the key application, the pop-up channels and ability to easily try new programs.

Gardner: It sounds like they are thinking of themselves as an IT company, rather than a media and entertainment company that consumes IT. Is that shift happening?

Connan-Lostanlen: Oh yes, that's an interesting topic, because I think you cannot really do this successfully if you don’t start to think IT a little bit. What we are seeing, interestingly, is that our customers typically used to have the IT department on one side, the broadcast engineers on the other side -- these were two groups that didn't speak the same language. Now they get together, and they have to, because they have to design together the solution that will make them more successful. We are seeing this happening.

I wouldn't say yet that they are IT companies. The core strength is content, that is their brand, that's what they are good at -- creating amazing content and making it available to as many people as possible.

They have to understand IT, but they can't lose concentration on their core business. I think the IT providers still have a very strong play there. It's always happening that way.

In addition to disaster recovery being a key application, multi-screen delivery is taking advantage of that technology, for sure.

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Gardner: These companies are making this cultural shift to being much more technically oriented. They think about standard processes across all of what they do, and they have their own core data center that's dynamic, flexible, agile and cost-efficient. What does that get for them? Is it too soon, or do we have some metrics of success for companies that make this move toward a full digitally transformed organization?

Connan-Lostanlen: They are very protective about the math. It is fair to say that the up-front investments may be higher, but when you do the math over time, you do the total cost of ownership for the next 5 to 10 years -- because that’s typically the life cycle of those infrastructures – then definitely they do save money. On the operational expenditure (OPEX) side [of private cloud economics] it’s much more efficient, but they also have upside on additional revenue. So net-net, the return on investment (ROI) is much better. But it’s kind of hard to say now because we are still in the early days, but it’s bound to be a much greater ROI.
Satellite providers are thinking broadly about how this world of IP is changing their game, what they need to do differently.

Another specific DR example is in the Middle East. We have a customer there who decided to operate the DR and IP in the cloud, instead of having a replicated system with satellite links in between. They were able to save $2 million worth of satellite links, and that data center investment, trust me, was not that high. So it shows that the ROI is there.

My satellite customers might say, “Well, what are you trying to do?” The good news is that they are looking at us to help them transform their businesses, too. So big satellite providers are thinking broadly about how this world of IP is changing their game. They are examining what they need to do differently. I think it’s going to create even more opportunities to reduce costs for all of our customers.

IT enters a hybrid world

Gardner: That's one of the intrinsic values of a hybrid IT approach -- you can use many different ways to do something, and then optimize which of those methods works best, and also alternate between them for best economics. That’s a very powerful concept.

Connan-Lostanlen: The world will be a hybrid IT world, and we will take advantage of that. But, of course, that will come with some challenges. What I think is next is the number-one question that I get asked.

Three years ago costumers would ask us, “Hey, IP is not going to work for live TV.” We convinced them otherwise, and now they know it’s working, it’s happening for real.

Secondly, they are thinking, “Okay, now I get it, so how do I do this?” We showed them, this is how you do it, the education piece.

Now, this year, the number-one question is security. “Okay, this is my content, the most valuable asset I have in my company. I am not putting this in the cloud,” they say. And this is where another piece of education has to start, which is: Actually, as you put stuff on your cloud, it’s more secure.

And we are working with our technology providers. As I said earlier, the COTS providers are not equal. We take it seriously. The cyber attacks on content and media is critical, and it’s bound to happen more often.

Initially there was a lack of understanding that you need to separate your corporate network, such as emails and VPNs, from you broadcast operations network. Okay, that’s easy to explain and that can be implemented, and that's where most of the attacks over the last five years have happened. This is solved.

They are going to get right into the servers, into the storage, and try to mess with it over
Not only at the software level, but at the hardware firmware level, we are adding protection against your number-one issue, security.
there. So I think it’s super important to be able to say, “Not only at the software level, but at the hardware firmware level, we are adding protection against your number-one issue, security, which everybody can see is so important.”

However, the cyber attackers are becoming more clever, so they will overcome these initial defenses.They are going to get right into the servers, into the storage, and try to mess with it over there. So I think it’s super important to be able to say, “Not only at the software level, but at the hardware firmware level, we are adding protection against your number-one issue, security, which everybody can see is so important.”

Gardner: Sure, the next domino to fall after you have the data center concept, the implementation, the execution, even the optimization, is then to remove risk, whether it's disaster recovery, security, right down to the silicon and so forth. So that’s the next thing we will look for, and I hope I can get a chance to talk to you about how you are all lowering risk for your clients the next time we speak.

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          Hybrid cloud ecosystem readies for impact from arrival of Microsoft Azure Stack        
The next BriefingsDirect cloud deployment strategies interview explores how hybrid cloud ecosystem players such as PwC and Hewlett Packard Enterprise (HPE) are gearing up to support the Microsoft Azure Stack private-public cloud continuum.

We’ll now learn what enterprises can do to make the most of hybrid cloud models and be ready specifically for Microsoft’s solutions for balancing the boundaries between public and private cloud deployments.

Listen to the podcast. Find it on iTunes. Get the mobile app. Read a full transcript or download a copy.

Here to explore the latest approaches for successful hybrid IT, we’re joined by Rohit “Ro” Antao, a Partner at PwC, and Ken Won, Director of Cloud Solutions Marketing at HPE. The discussion is moderated by Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: Ro, what are the trends driving adoption of hybrid cloud models, specifically Microsoft Azure Stack? Why are people interested in doing this?

Antao: What we have observed in the last 18 months is that a lot of our clients are now aggressively pushing toward the public cloud. In that journey there are a couple of things that are becoming really loud and clear to them.

Journey to the cloud

Number one is that there will always be some sort of a private data center footprint. There are certain workloads that are not appropriate for the public cloud; there are certain workloads that perform better in the private data center. And so the first acknowledgment is that there is going to be that private, as well as public, side of how they deliver IT services.

Now, that being said, they have to begin building the capabilities and the mechanisms to be able to manage these different environments seamlessly. As they go down this path, that's where we are seeing a lot of traction and focus.

The other trend in conjunction with that is in the public cloud space where we see a lot of traction around Azure. They have come on strong. They have been aggressively going after the public cloud market. Being able to have that seamless environment between private and public with Azure Stack is what’s driving a lot of the demand.

Won
Won: We at HPE are seeing that very similarly, as well. We call that “hybrid IT,” and we talk about how customers need to find the right mix of private and public -- and managed services -- to fit their businesses. They may put some services in a public cloud, some services in a private cloud, and some in a managed cloud. Depending on their company strategy, they need to figure out which workloads go where.

We have these conversations with many of our customers about how do you determine the right placement for these different workloads -- taking into account things like security, performance, compliance, and cost -- and helping them evaluate this hybrid IT environment that they now need to manage.

Gardner: Ro, a lot of what people have used public cloud for is greenfield apps -- beginning in the cloud, developing in the cloud, deploying in the cloud -- but there's also an interest in many enterprises about legacy applications and datasets. Is Azure Stack and hybrid cloud an opportunity for them to rethink where their older apps and data should reside?

Antao: Absolutely. When you look at the broader market, a lot of these businesses are competing today in very dynamic markets. When companies today think about strategy, it's no longer the 5- and 10-year strategy. They are thinking about how to be relevant in the market this year, today, this quarter. That requires a lot of flexibility in their business model; that requires a lot of variability in their cost structure.

Antao
When you look at it from that viewpoint, a lot of our clients look at the public cloud as more than, “Is the app suitable for the public cloud?” They are also seeking certain cost advantages in terms of variability in that cost structure that they can take advantage of. And that’s where we are seeing them look at the public cloud beyond just applications in terms that are suitable for public cloud.

Public and/or private power

Won: We help a lot of companies think about where the best place is for their traditional apps. Often they don’t want to restructure them, they don’t want to rewrite them, because they are already an investment; they don’t want to spend a lot of time refactoring them.

If you look at these traditional applications, a lot of times when they are dealing with data – especially if they are dealing with sensitive data -- those are better placed in a private cloud.

Antao: One of the great things about Microsoft Azure Stack is it gives the data center that public cloud experience -- where developers have the similar experience as they would in a public cloud. The only difference is that you are now controlling the costs as well. So that's another big advantage we see.

Hybrid Cloud Solutions
for Microsoft Azure Stack
Won: Yeah, absolutely, it's giving the developers the experience of a public cloud, but from the IT standpoint of also providing the compliance, the control, and the security of a private cloud. Allowing applications to be deployed in either a public or private cloud -- depending on its requirements -- is incredibly powerful. There's no other environment out there that provides that API-compatibility between private and public cloud deployments like Azure Stack does. 

Gardner: Clearly Microsoft is interested in recognizing that skill sets, platform affinity, and processes are all really important. If they are able to provide a private cloud and public cloud experience that’s common to the IT operators that are used to using Microsoft platforms and frameworks -- that's a boon. It's also important for enterprises to be able to continue with the skills they have.

Ro, is such a commonality of skills and processes not top of mind for many organizations? 

Antao: Absolutely! I think there is always the risk when you have different environments having that “swivel chair” approach. You have a certain set of skills and processes for your private data center. Then you now have a certain set of skills and processes to manage your public cloud footprint.

One of the big problems and challenges that this solves is being able to drive more of that commonality across consistent sets of processes. You can have a similar talent pool, and you have similar kinds of training and awareness that you are trying to drive within the organization -- because you now can have similar stacks on both ends.

Won: That's a great point. We know that the biggest challenge to adopting new concepts
The biggest challenge to adopting new concepts is not the technology; it's really the people and process issues.  
is not the technology; it's really the people and process issues. So if you can address that, which is what Azure Stack does, it makes it so much easier for enterprises to bring on new capabilities, because they are leveraging the experience that they already have using Azure public cloud.

Gardner: Many IT organizations are familiar with Microsoft Azure Stack. It's been in technical preview for quite some time. As it hits the market in September 2017, in seeking that total-solution, people-and-process approach, what is PwC bringing to the table to help organizations get the best value and advantage out of Azure Stack?

Hybrid: a tectonic IT shift

Antao: Ken made the point earlier in this discussion about hybrid IT. When you look at IT pivoting to more of the hybrid delivery mode, it's a tectonic shift in IT's operating model, in their architecture, their culture, in their roles and responsibilities – in the fundamental value proposition of IT to the enterprise.

When we partner with HPE in helping organizations drive through this transformation, we work with HPE in rethinking the operating model, in understanding the new kinds of roles and skills, of being able to apply these changes in the context of the business drivers that are leading it. That's one of the typical ways that we work with HPE in this space.

Won: It's a great complement. HPE understands the technology, understands the infrastructure, combined with the business processes, and then the higher level of thinking and the strategy knowledge that PwC has. It's a great partnership.

Gardner: Attaining hybrid IT efficiency and doing it with security and control is not something you buy off the shelf. It's not a license. It seems to me that an ecosystem is essential. But how do IT organizations manage that ecosystem? Are there ways that you all are working together, HPE in this case with PwC, and with Microsoft to make that consumption of an ecosystem solution much more attainable?

Won: One of the things that we are doing is working with Microsoft on their partnerships so that we can look at all these companies that have their offerings running on Azure public cloud and ensuring that those are all available and supported in Azure Stack, as well as running in the data center.

We are spending a lot of time with Microsoft on their ecosystem to make sure those services, those companies, or those products are available on Azure Stack -- as well fully supported on Azure Stack that’s running on HPE gear.

Gardner: They might not be concerned about the hardware, but they are concerned about the total value -- and the total solution. If the hardware players aren't collaborating well with the service providers and with the cloud providers -- then that's not going to work.

Quick collaboration is key

Won: Exactly! I think of it like a washing machine. No one wants to own a washing machine, but everyone wants clean clothes. So it's the necessary evil, it’s super important, but you just as soon not have to do it.

Gardner: I just don’t know what to take to the dry cleaner or not, right?

Won: Yeah, there you go!
Hybrid Cloud Solutions
for Microsoft Azure Stack
Antao: From a consulting standpoint, clients no longer have the appetite for these five- to six-year transformations. Their businesses are changing at a much faster pace. One of the ways that we are working the ecosystem-level solution -- again much like the deep and longstanding relationship we have had with HPE – is we have also been working with Microsoft in the same context.

And in a three-way fashion, we have focused on being able to define accelerators to deploying these solutions. So codifying a lot of our experiences, the lessons learned, a deep understanding of both the public and the private stack to be able to accelerate value for our customers -- because that’s what they expect today.

Won: One of the things, Ro, that you brought up, and I think is very relevant here, is these three-way relationships. Customers don't want to have to deal with all of these different vendors, these different pieces of stack or different aspects of the value chain. They instead expect us as vendors to be working together. So HPE, PwC, Microsoft are all working together to make it easier for the customers to ultimately deliver the services they need to drive their business.

Low risk, all reward

Gardner: So speed-to-value, super important; common solution cooperation and collaboration synergy among the partners, super important. But another part of this is doing it at low risk, because no one wants to be in a transition from a public to private or a full hybrid spectrum -- and then suffer performance issues, lost data, with end customers not happy.

PwC has been focused on governance, risk management and compliance (GRC) in trying to bring about better end-to-end hybrid IT control. What is it that you bring to this particular problem that is unique? It seems that each enterprise is doing this anew, but you have done it for a lot of others and experience can be very powerful that way.

Antao: Absolutely! The move to hybrid IT is a fundamental shift in governance models, in how you address certain risks, the emergence of new risks, and new security challenges. A lot of what we have been doing in this space has been in helping that IT organizations accelerate that shift -- that paradigm shift -- that they have to make.

In that context, we have been working very closely with HPE to understand what the requirements of that new world are going to look like. We can build and bring to the table solutions that support those needs.

Won: It’s absolutely critical -- this experience that PwC has is huge. We always come up with new technologies; every few years you have something new. But it’s that experience that PwC has to bring to the table that's incredibly helpful to our customer base.

There’s this whole journey getting to that hybrid IT state and having the governing mechanisms around it. 
Antao: So often when we think of governance, it’s more in terms of the steady state and the runtime. But there's this whole journey between getting from where we today to that hybrid IT state -- and having the governing mechanisms around it -- so that they can do it in a way that doesn't expose their business to too much risk. There is always risk involved in these large-scale transformations, but how do you manage and govern that process through getting to that hybrid IT state? That’s where we also spend a lot of time as we help clients through this transformation.

Gardner: For IT shops that are heavily Microsoft-focused, is there a way for them to master Azure Stack, the people, process and technology that will then be an accelerant for them to go to a broader hybrid IT capability? I’m thinking of multi-cloud, and even being able to develop with DevOps and SecOps across a multiple cloud continuum as a core competency.

Is Azure Stack for many companies a stepping-stone to a wider hybrid capability, Ro?

Managed multi-cloud continuum

Antao: Yes. And I think in many cases that’s inevitable. When you look at most organizations today, generally speaking, they have at least two public cloud providers that they use. They consume several Software as a service (SaaS) applications. They have multiple data center locations.  The role of IT now is to become the broker and integrator of multi-cloud environments, among and between on-premise and in the public cloud. That's where we see a lot of them evolve their management practices, their processes, the talent -- to be able to abstract these different pools and focus on the business. That's where we see a lot of the talent development.
Hybrid Cloud Solutions
for Microsoft Azure Stack
Won: We see that as well at HPE as this whole multi-cloud strategy is being implemented. More and more, the challenge that organizations are having is that they have these multiple clouds, each of which is managed by a different team or via different technologies with different processes.

So as a way to bring these together, there is huge value to the customer, by bringing together, for example, Azure Stack and Azure [public cloud] together. They may have multiple Azure Stack environments, perhaps in different data centers, in different countries, in different locales. We need to help them align their processes to run much more efficiently and more effectively. We need to engage with them not only from an IT standpoint, but also from the developer standpoint. They can use those common services to develop that application and deploy it in multiple places in the same way.

Antao: What's making this whole environment even more complex these days is that a couple of years ago, when we talked about multi-cloud, it was really the capability to either deploy in one public cloud versus another.

Within a given business workflow, how do you leverage different clouds, given their unique strengths and weaknesses?
Few years later, it evolved into being able to port workloads seamlessly from one cloud to another. Today, as we look at the multi-cloud strategy that a lot of our clients are exploring this: Within a given business workflow, depending on the unique characteristics of different parts of that business process, how do you leverage different clouds given their unique strengths and weaknesses?

There might be portions of a business process that, to your point earlier, Ken, are highly confidential. You are dealing with a lot of compliance requirements. You may want to consume from an internal private cloud. There are other parts of it that you are looking for, such as immense scale, to deal with the peaks when that particular business process gets impacted. How do you go back to where the public cloud has a history with that? In a third case, it might be enterprise-grades workloads.

So that’s where we are seeing multi-cloud evolve, into where in one business process could have multiple sources, and so how does an IT organization manage that in a seamless way?

Gardner: It certainly seems inevitable that the choice of such a cloud continuum configuration model will vary and change. It could be one definition in one country or region, another definition in another country and region. It could even be contextual, such as by the type of end user who's banging on the app. As the Internet of Things (IoT) kicks in, we might be thinking about not just individuals, but machine-to-machine (M2M), app-to-app types of interactions.

So quite a bit of complexity, but dealt with in such a way that the payoff could be monumental. If you do hybrid cloud and hybrid IT well, what could that mean for your business in three to five years, Ro?

Nimble, quick and cost-efficient

Antao: Clearly there is the agility aspect, of being able to seamlessly leverage these different clouds to allow IT organizations to be much more nimble in how they respond to the business.

From a cost standpoint, and this is actually a great example we had for a large-scale migration that we are currently doing to the public cloud. What the IT organization found was they consumed close to 70 percent of their migration budget for only 30 percent of the progress that they made.

And a larger part of that was because the minute you have your workloads sitting on a public cloud -- whether it is a development workload or you are still working your way through it, but technically it’s not yet providing value -- the clock is ticking. Being able to allow for a hybrid environment, where you a do a lot of that development, get it ready -- almost production-ready -- and then when the time is right to drive value from that application -- that’s when you move to a public cloud. Those are huge cost savings right there.

Clients that have managed to balance those two paradigms are the ones who are also seeing a lot of economic efficiencies.

Won: The most important thing that people see value in is that agility. The ability to respond much faster to competitive actions or to new changes in the market, the ability to bring applications out faster, to be able to update applications in months -- or sometimes even weeks -- rather than the two years that it used to take.

It's that agility to allow people to move faster and to shift their capabilities so much quicker than they have ever been able to do – that is the top reason why we're seeing people moving to this hybrid model. The cost factor is also really critical as they look at whether they are doing CAPEX or OPEX and private cloud or public cloud.

One of the things that we have been doing at HPE through our Flexible Capacity program is that we enable our customers who were getting hardware to run these private clouds to actually pay for it on a pay-as-you-go basis. This allows them to better align their usage -- the cost to their usage. So taking that whole concept of pay-as-you-go that we see in the public cloud and bringing that into a private cloud environment.

Hybrid Cloud Solutions
for Microsoft Azure Stack
Antao: That’s a great point. From a cost standpoint, there is an efficiency discussion. But we are also seeing in today's world that we are depending on edge computing a lot more. I was talking to the CIO of a large park the other day, and his comment to me was, yes, they would love to use the public cloud but they cannot afford for any kind of latency or disruption of services because that means he’s got thousands of visitors and guests in his park, because of the amount of dependency on technology he can afford that kind of latency.

And so part of it is also the revenue impact discussion, and using public cloud in a way that allows you to manage some of those risks in terms of that analytical power and that computing power you need closer to the edge -- closer to your internal systems.

Gardner: Microsoft Azure Stack is reinforcing the power and capability of hybrid cloud models, but Azure Stack is not going to be the same for each individual enterprise. How they differentiate, how they use and take advantage of a hybrid continuum will give them competitive advantages and give them a one-up in terms of skills.

It seems to me that the continuum of Azure Stack, of a hybrid cloud, is super-important. But how your organization specifically takes advantage of that is going to be the key differentiator. And that's where an ecosystem solutions approach can be a huge benefit.

Let's look at what comes next. What might we be talking about a year from now when we think about Microsoft Azure Stack in the market and the impact of hybrid cloud on businesses, Ken?

Look at clouds from both sides now

You will see that as a break in the boundary of private cloud versus public cloud, so think of it as a continuum. 
Won: You will see organizations shifting from a world of using multiple clouds and having different applications or services on clouds to having an environment where services are based on multiple clouds. With the new cloud-native applications you'll be running different aspects of those services in different locations based on what are the requirements of that particular microservice

So a service may be partially running in Azure, part of it may be running in Azure Stack. You will certainly see that as a kind of break in the boundary of private cloud versus public cloud, and so think of it as a continuum, if you will, of different environments able to support whatever applications they need.

Gardner: Ro, as people get more into the weeds with hybrid cloud, maybe using Azure Stack, how will the market adjust?

Antao: I completely agree with Ken in terms of how organizations are going to evolve their architecture. At PwC we have this term called the Configurable Enterprise, which essentially focuses on how the IT organization consumes services from all of these different sources to be able to ultimately solve business problems.

To that point, where we see the market trends is in the hybrid IT space, the adoption of that continuum. One of the big pressures IT organizations face is how they are going to evolve their operating model to be successful in this new world. CIOs, especially the forward-thinking ones, are starting to ask that question. We are going to see in the next 12 months a lot more pressure in that space.

Gardner: These are, after all, still early days of hybrid cloud and hybrid IT. Before we sign off, how should organizations that might not yet be deep into this prepare themselves? Are there some operations, culture, and skills? How might you want to be in a good position to take advantage of this when you do take the plunge?

Plan to succeed with IT on board

Won: One of the things we recommend is a workshop where we sit down with the customer and think through their company strategy. What is their IT strategy? How does that relate or map to the infrastructure that they need in order to be successful?

This makes the connection between the value they want to offer as a company, as a business, to the infrastructure. It puts a plan in place so that they can see that direct linkage. That workshop is one of the things that we help a lot of customers with.

We also have innovation centers that we've built with Microsoft where customers can come in and experience Azure Stack firsthand. They can see the latest versions of Azure Stack, they can see the hardware, and they can meet with experts. We bring in partners such as PwC to have a conversation in these innovation centers with experts.

Gardner: Ro, how to get ready when you want to take the plunge and make the best and most of it?
Hybrid Cloud Solutions
for Microsoft Azure Stack
Antao: We are at a stage right now where these transformations can no longer be done to the IT organization; the IT organization has to come along on this journey. What we have seen is, especially in the early stages, the running of pilot projects, of being able to involve the developers, the infrastructure architects, and the operations folks in pilot workloads, and learn how to manage it going forward in this new model.

You want to create that from a top-down perspective, being able to tie in to where this adds the most value to the business. From a grassroots effort, you need to also create champions within the trenches that are going to be able to manage this new environment. Combining those two efforts has been very successful for organizations as they embark on this journey.


          Advanced IoT systems provide analysis catalyst for the petrochemical refinery of the future        
The next BriefingsDirect Voice of the Customer Internet-of-Things (IoT) technology trends interview explores how IT combines with IoT to help create the refinery of the future

We’ll now learn how a leading-edge petrochemical company in Texas is rethinking data gathering and analysis to foster safer environments and greater overall efficiency.

Listen to the podcast. Find it on iTunes. Get the mobile app. Read a full transcript or download a copy. 

To help us define the best of the refinery of the future vision is Doug Smith, CEO of Texmark Chemicals in Galena Park, Texas, and JR Fuller, Worldwide Business Development Manager for Edgeline IoT at Hewlett Packard Enterprise (HPE). The discussion is moderated by Dana Gardner, principal analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: What are the top trends driving this need for a new refinery of the future? Doug, why aren’t the refinery practices of the past good enough?

Smith: First of all, I want to talk about people. People are the catalysts who make this refinery of the future possible. At Texmark Chemicals, we spent the last 20 years making capital investments in our infrastructure, in our physical plant, and in the last four years we have put together a roadmap for our IT needs.

Through our introduction to HPE, we have entered into a partnership that is not just a client-customer relationship. It’s more than that, and it allows us to work together to discover IoT solutions that we can bring to bear on our IT challenges at Texmark. So, we are on the voyage of discovery together -- and we are sailing out to sea. It’s going great.

Gardner: JR, it’s always impressive when a new technology trend aids and abets a traditional business, and then that business can show through innovation what should then come next in the technology. How is that back and forth working? Where should we expect IoT to go in terms of business benefits in the not-to-distant future?

Fuller
Fuller: One of powerful things about the partnership and relationship we have is that we each respect and understand each other's “swim lanes.” I’m not trying to be a chemical company. I’m trying to understand what they do and how I can help them.

And they’re not trying to become an IT or IoT company. Their job is to make chemicals; our job is to figure out the IT. We’re seeing in Texmark the transformation from an Old World economy-type business to a New World economy-type business.

This is huge, this is transformational. As Doug said, they’ve made huge investments in their physical assets and what we call Operational Technology (OT). They have done that for the past 20 years. The people they have at Texmark who are using these assets are phenomenal. They possess decades of experience.
Learn From Customers Who
Realize the IoT Advantage
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Yet IoT is really new for them. How to leverage that? They have said, “You know what? We squeezed as much as we can out of OT technology, out of our people, and our processes. Now, let’s see what else is out there.”

And through introductions to us and our ecosystem partners, we’ve been able to show them how we can help squeeze even more out of those OT assets using this new technology. So, it’s really exciting.

Gardner: Doug, let’s level-set this a little bit for our audience. They might not all be familiar with the refinery business, or even the petrochemical industry. You’re in the process of processing. You’re making one material into another and you’re doing that in bulk, and you need to do it on a just-in-time basis, given the demands of supply chains these days.

You need to make your business processes and your IT network mesh, to reach every corner. How does a wireless network become an enabler for your requirements?

The heart of IT 

Smith: In a large plant facility, we have different pieces of equipment. One piece of equipment is a pump -- the analogy would be the heart of the process facility of the plant.

Smith
So your question regarding the wireless network, if we can sensor a pump and tie it into a mesh network, there are incredible cost savings for us. The physical wiring of a pump runs anywhere from $3,000 to $5,000 per pump. So, we see a savings in that.

Being able to have the information wirelessly right away -- that gives us knowledge immediately that we wouldn’t have otherwise. We have workers and millwrights at the plant that physically go out and inspect every single pump in our plant, and we have 133 pumps. If we can utilize our sensors through the wireless network, our millwrights can concentrate on the pumps that they know are having problems.
To have the information wirelessly right away -- that gives us knowledge immediately that we wouldn’t have otherwise.

Gardner: You’re also able to track those individuals, those workers, so if there’s a need to communicate, to locate, to make sure that they hearing the policy, that’s another big part of IoT and people coming together.

Safety is good business

Smith: The tracking of workers is more of a safety issue -- and safety is critical, absolutely critical in a petrochemical facility. We must account for all our people and know where they are in the event of any type of emergency situation.

Gardner: We have the sensors, we can link things up, we can begin to analyze devices and bring that data analytics to the edge, perhaps within a mini data center facility, something that’s ruggedized and tough and able to handle a plant environment.

Given this scenario, JR, what sorts of efficiencies are organizations like Texmark seeing? I know in some businesses, they talk about double digit increases, but in a mature industry, how does this all translate into dollars?

Fuller: We talk about the power of one percent. A one percent improvement in one of the major companies is multi-billions of dollars saved. A one percent change is huge, and, yes, at Texmark we’re able to see some larger percentage-wise efficiency, because they’re actually very nimble.

It’s hard to turn a big titanic ship, but the smaller boat is actually much better at it. We’re able to do things at Texmark that we are not able to do at other places, but we’re then able to create that blueprint of how they do it. 

You’re absolutely right, doing edge computing, with our HPE Edgeline products, and gathering the micro-data from the extra compute power we have installed, provides a lot of opportunities for us to go into the predictive part of this. It’s really where you see the new efficiencies.

Recently I was with the engineers out there, and we’re walking through the facility, and they’re showing us all the equipment that we’re looking at sensoring up, and adding all these analytics. I noticed something on one of the pumps. I’ve been around pumps, I know pumps very well.

I saw this thing, and I said, “What is that?”

“So that’s a filter,” they said.

I said, “What happens if the filter gets clogged?”

“It shuts down the whole pump,” they said.

“What happens if you lose this pump?” I asked.

“We lose the whole chemical process,” they explained.

“Okay, are there sensors on this filter?”

“No, there are only sensors on the pump,” they said.

There weren’t any sensors on the filter. Now, that’s just something that we haven’t thought of, right? But again, I’m not a chemical guy. So I can ask questions that maybe they didn’t ask before.

So I said, “How do you solve this problem today?”

“Well, we have a scheduled maintenance plan,” they said.

They don’t have a problem, but based on the scheduled maintenance plan that filter gets changed whether it needs to or not. It just gets changed on a regular basis. Using IoT technology, we can tell them exactly when to change that filter. Therefore IoT saves on the cost of the filter and the cost of the manpower -- and those types of potential efficiencies and savings are just one small example of the things that we’re trying to accomplish.

Continuous functionality

Smith: It points to the uniqueness of the people-level relationship between the HPE team, our partners, and the Texmark team. We are able to have these conversations to identify things that we haven’t even thought of before. I could give you 25 examples of things just like this, where we say, “Oh, wow, I hadn’t thought about that.” And yet it makes people safer and it all becomes more efficient.
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Gardner: You don’t know until you have that network in place and the data analytics to utilize what the potential use-cases can be. The name of the game is utilization efficiency, but also continuous operations.

How do you increase your likelihood or reduce the risk of disruption and enhance your continuous operations using these analytics?

Smith: To answer, I’m going to use the example of toll processing. Toll processing is when we would have a customer come to us and ask us to run a process on the equipment that we have at Texmark.

Normally, they would give us a recipe, and we would process a material. We take samples throughout the process, the production, and deliver a finished product to them. With this new level of analytics, with the sensoring of all these components in the refinery of the future vision, we can provide a value-add to the customers by giving them more data than they could ever want. We can document and verify the manufacture and production of the particular chemical that we’re toll processing for them.

Fuller: To add to that, as part of the process, sometimes you may have to do multiple runs when you're tolling, because of your feed stock and the way it works.
By using advanced analytics and the predictive benefits of having all that data, we're looking to gain efficiencies.
By usingadvanced analytics, and some of the predictive benefits of having all of that data available, we're looking to gain efficiencies to cut down the number of additional runs needed. If you take a process that would have taken three runs and we can knock that down to two runs -- that's a 30 percent decrease in total cost and expense. It also allows them produce more products, and to get it out to people a lot faster

Smith: Exactly. Exactly!

Gardner: Of course, the more insight that you can obtain from a pump, and the more resulting data analysis, that gives you insight into the larger processes. You can extend that data and information back into your supply chain. So there's no guesswork. There's no gap. You have complete visibility -- and that's a big plus when it comes to reducing risk in any large, complex, multi-supplier undertaking.

Beyond data gathering, data sharing

Smith: It goes back to relationships at Texmark. We have relationships with our neighbors that are unique in the industry, and so we would be able to share the data that we have.

Fuller: With suppliers.

Smith: Exactly, with suppliers and vendors. It's transformational.

Gardner: So you're extending a common standard industry-accepted platform approach locally into an extended process benefit. And you can share that because you are using common, IT-industry-wide infrastructurefrom HPE.

Fuller: And that's very important. We have a three-phase project, and we've just finished the first two phases. Phase 1 was to put ubiquitous WiFi infrastructure in there, with the location-based services, and all of the things to enable that. The second phase was to upgrade the compute infrastructure with our Edgeline compute and put in our HPE Micro Datacenter in there. So now they have some very robust compute.
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With that infrastructure in place, it now allows us to do that third phase, where we're bringing in additional IoT projects. We will create a data infrastructure with data storage, and application programming interfaces (APIs), and things like that. That will allow us to bring in a specialty video analytic capability that will overlay on top of the physical and logical infrastructure. And it makes it so much easier to integrate all that.

Gardner: You get a chance to customize the apps much better when you have a standard IT architecture underneath that, right?

Trailblazing standards for a new workforce

Smith: Well, exactly. What are you saying, Dana is – and it gives me chills when I start thinking about what we're doing at Texmark within our industry – is the setting of standards, blazing a new trail. When we talk to our customers and our suppliers and we tell them about this refinery of the future project that we're initiating, all other business goes out the window. They want to know more about what we're doing with the IoT -- and that's incredibly encouraging.

Gardner: I imagine that there are competitive advantages when you can get out in front and you're blazing that trail. If you have the experience, the skills of understanding how to leverage an IoT environment, and an edge computing capability, then you're going to continue to be a step ahead of the competition on many levels: efficiency, safety, ability to customize, and supply chain visibility.

Smith: It surely allows our Texmark team to do their jobs better. I use the example of the millwrights going out and inspecting pumps, and they do that everyday. They do it very well. If we can give them the tools, where they can focus on what they do best over a lifetime of working with pumps, and only work on the pumps that they need to, that's a great example.

I am extremely excited about the opportunities at the refinery of the future to bring new workers into the petrochemical industry. We have a large number of people within our industry who are retiring; they’re taking intellectual capital with them. So to be able to show young people that we are using advanced technology in new and exciting ways is a real draw and it would bring more young people into our industry.

Gardner: By empowering that facilities edge and standardizing IT around it, that also gives us an opportunity to think about the other part of this spectrum -- and that's the cloud. There are cloud services and larger data sets that could be brought to bear.

How does the linking of the edge to the cloud have a benefit?

Cloud watching

Fuller: Texmark Chemicals has one location, and they service the world from that location as a global leader in dicyclopentadiene (DCPD) production. So the cloud doesn't have the same impact as it would for maybe one of the other big oil or big petrochemical companies. But there are ways that we're going to use the cloud at Texmark and rally around it for safety and security.

Utilizing our location-based services, and our compute, if there is an emergency -- whether it's at Texmark or a neighbor -- using cloud-based information like weather, humidity, and wind direction -- and all of these other things that are constantly changing -- we can provide better directed responses. That's one way we would be using cloud at Texmark.

When we start talking about the larger industry -- and connecting multiple refineries together or upstream, downstream and midstream kinds of assets together with a petrochemical company -- cloud becomes critical. And you have to have hybrid infrastructure support.

You don't want to send all your video to the cloud to get analyzed. You want to do that at the edge. You don't want to send all of your vibration data to the cloud, you want to do that at the edge. But, yes, you do want to know when a pump fails, or when something happens so you can educate and train and learn and share that information and institutional knowledge throughout the rest of the organization.

Gardner: Before we sign off, let’s take a quick look into the crystal ball. Refinery of the future, five years from now, Doug, where do you see this going?
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Smith: The crystal ball is often kind of foggy, but it’s fun to look into it. I had mentioned earlier opportunities for education of a new workforce. Certainly, I am focused on the solutions that IoT brings to efficiencies, safety, and profitability of Texmark as a company. But I am definitely interested in giving people opportunities to find a job to work in a good industry that can be a career.

Gardner: JR, I know HPE has a lot going on with edge computing, making these data centers more efficient, more capable, and more rugged. Where do you see the potential here for IoT capability in refineries of the future?

Future forecast: safe, efficient edge

Fuller: You're going to see the pace pick up. I have to give kudos to Doug. He is a visionary. Whether he admits that or not, he is actually showing an industry that has been around for many years how to do this and be successful at it. So that's incredible. In that crystal ball look, that five-year look, he's going to be recognized as someone who helped really transform this industry from old to new economy.

As far as edge-computing goes, what we're seeing with our converged Edgeline systems, which are our first generation, and we've created this market space for converged edge systems with the hardening of it. Now, we’re working on generation 2. We're going to get faster, smaller, cheaper, and become more ubiquitous. I see our IoT infrastructure as having a dramatic impact on what we can actually accomplish and the workforce in five years. It will be more virtual and augmented and have all of these capabilities. It’s going to be a lot safer for people, and it’s going to be a lot more efficient.

Listen to the podcast. Find it on iTunes. Get the mobile app. Read a full transcript or download a copy. Sponsor: Hewlett Packard Enterprise.

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          Get ready for the post-cloud world        
Just when cloud computing seems inevitable as the dominant force in IT, it’s time to move on because we’re not quite at the end-state of digital transformation. Far from it.

Now's the time to prepare for the post-cloud world.

It’s not that cloud computing is going away. It’s that we need to be ready for making the best of IT productivity once cloud in its many forms become so pervasive as to be mundane, the place where all great IT innovations must go.

Read the rest ...



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          India Smart Cities Mission shows IoT potential for improving quality of life at vast scale        
The next BriefingsDirect Voice of the Customer Internet-of-Things (IoT) transformation discussion examines the potential impact and improvement of low-power edge computing benefits on rapidly modernizing cities.

These so-called smart city initiatives are exploiting open, wide area networking (WAN) technologies to make urban life richer in services, safer, and far more responsive to residences’ needs. We will now learn how such pervasively connected and data-driven IoT architectures are helping cities in India vastly improve the quality of life there.

Listen to the podcast. Find it on iTunes. Get the mobile app. Read a full transcript or download a copy.

Here to share how communication service providers have become agents of digital urban transformation are VS Shridhar, Senior Vice President and Head of the Internet-of-Things Business Unit at Tata Communications in Chennai area, India, and Nigel Upton, General Manager of the Universal IoT Platform and Global Connectivity Platform and Communications Solutions Business at Hewlett Packard Enterprise (HPE). The discussion is moderated by Dana Gardner, principal analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: Tell us about India’s Smart Cities mission. What are you up to and how are these new technologies coming to bear on improving urban quality of life?

Shridhar: The government is clearly focusing on Smart Cities as part of their urbanization plan, as they believe Smart Cities will not only improve the quality of living, but also generate employment, and take the whole country forward in terms of technologically embracing and improving the quality of life.

So with that in mind, the Government of India has launched 100 Smart Cities initiatives. It’s quite interesting because each of the cities that aspire to belong had to make a plan and their own strategy around how they are going to evolve and how they are going to execute it, present it, and get selected. There was a proper selection process.

Many of the cities made it, and of course some of them didn’t make it. Interestingly, some of the cities that didn’t make it are developing their own plans.
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There is lot of excitement and curiosity as well as action in the Smart Cities project. Admittedly, it’s a slow process, it’s not something that you can do at the blink of the eye, and Rome wasn’t built overnight, but I definitely see a lot of progress.

Gardner:Nigel, it seems that the timing for this is auspicious, given that there are some foundational technologies that are now available at very low cost compared to the past, and that have much more of a pervasive opportunity to gather information and make a two-way street, if you will, between the edge and central administration. How is the technology evolution synching up with these Smart Cities initiatives in India?

Upton:I am not sure whether it’s timing or luck, or whatever it happens to be, but adoption of the digitization of city infrastructure and services is to some extent driven by economics. While I like to tease my colleagues in India about their sensitivity to price, the truth of the matter is that the economics of digitization -- and therefore IoT in smart cities -- needs to be at the right price, depending on where it is in the world, and India has some very specific price points to hit. That will drive the rate of adoption.

And so, we're very encouraged that innovation is continuing to drive price points down to the point that mass adoption can then be taken up, and the benefits realized to a much more broad spectrum of the population. Working with Tata Communications has really helped HPE understand this and continue to evolve as technology and be part of the partner ecosystem because it does take a village to raise an IoT smart city. You need a lot of partners to make this happen, and that combination of partnership, willingness to work together and driving the economic price points to the point of adoption has been absolutely critical in getting us to where we are today.

Balanced Bandwidth

Gardner:Shridhar, we have some very important optimization opportunities around things like street lighting, waste removal, public safety, water quality; of course, the pervasive need for traffic and parking, monitoring and improvement.

How do things like a low-power specification Internet and network gateways and low-power WANs (LPWANs) create a new foundation technically to improve these services? How do we connect the services and the technology for an improved outcome?

Shridhar:If you look at human interaction to the Internet, we have a lot of technology coming our way. We used to have 2G, that has moved to 3G and to 4G, and that is a lot of bandwidth coming our way. We would like to have a tremendous amount of access and bandwidth speeds and so on, right?

Shridhar
So the human interaction and experience is improving vastly, given the networks that are growing. On the machine-to-machine (M2M) side, it’s going to be different. They don’t need oodles of bandwidth. About 80 to 90 percent of all machine interactions are going to be very, very low bandwidth – and, of course, low power. I will come to the low power in a moment, but it’s going to be very low bandwidth requirement.

In order to switch off a streetlight, how much bandwidth do you actually require? Or, in order to sense temperature or air quality or water and water quality, how much bandwidth do you actually require?

When you ask these questions, you get an answer that the machines don’t require that much bandwidth. More importantly, when there are millions -- or possibly billions -- of devices to be deployed in the years to come, how are you going to service a piece of equipment that is telling a streetlight to switch on and switch off if the battery runs out?

Machines are different from humans in terms of interactions. When we deploy machines that require low bandwidth and low power consumption, a battery can enable such a machine to communicate for years.

Aside from heavy video streaming applications or constant security monitoring, where low-bandwidth, low-power technology doesn’t work, the majority of the cases are all about low bandwidth and low power. And these machines can communicate with the quality of service that is required.

When it communicates, the network has to be available. You then need to establish a network that is highly available, which consumes very little power and provides the right amount of bandwidth. So studies show that less than 50 kbps connectivity should suffice for the majority of these requirements.

Now the machine interaction also means that you collect all of them into a platform and basically act on them. It's not about just sensing it, it's measuring it, analyzing it, and acting on it.

Low-power to the people

So the whole stack consists not just of connectivity alone. It’s LPWAN technology that is emerging now and is becoming a de facto standard as more-and-more countries start embracing it.

At Tata Communications we have embraced the LPWAN technology from the LoRa Alliance, a consortium of more than 400 partners who have gotten together and are driving standards. We are creating this network over the next 18 to 24 months across India. We have made these networks available right now in four cities. By the end of the year, it will be many more cities -- almost 60 cities across India by March 2018.

Gardner: Nigel, how do you see the opportunity, the market, for a standard architecture around this sort of low-power, low-bandwidth network? This is a proof of concept in India, but what's the potential here for taking this even further? Is this something that has global potential?
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Upton: The global potential is undoubtedly there, and there is an additional element that we didn't talk about which is that not all devices require the same amount of bandwidth. So we have talked about video surveillance requiring higher bandwidth, we have talked about devices that have low-power bandwidth and will essentially be created once and forgotten when expected to last 5 or 10 years.

Upton
We also need to add in the aspect of security, and that really gave HPE and Tata the common ground of understanding that the world is made up of a variety of network requirements, some of which will be met by LPWAN, some of which will require more bandwidth, maybe as high as 5G.

The real advantage of being able to use a common architecture to be able to take the data from these devices is the idea of having things like a common management, common security, and a common data model so that you really have the power of being able to take information, take data from all of these different types of devices and pull it into a common platform that is based on a standard.

In our case, we selected the oneM2M standard, it’s the best standard available to be able to build that common data model and that's the reason why we deployed the oneM2M model within the universal IoT platform to get that consistency no matter what type of device over no matter what type of network.

Gardner: It certainly sounds like this is an unprecedented opportunity to gather insight and analysis into areas that you just really couldn't have measured before. So going back to the economics of this, Shridhar, have you had any opportunity through these pilot projects in such cities as Jamshedpur to demonstrate a return on investment, perhaps on street lighting, perhaps on quality of utilization and efficiency? Is there a strong financial incentive to do this once the initial hurdle of upfront costs is met?

Data-driven cost reduction lights up India

Unless the customer sees that there is a scope for either reducing the cost or increasing the customer experience, they are not going to buy these kinds of solutions.
Shridhar: Unless the customer sees that there is a scope for either reducing the cost or increasing the customer experience, they are not going to buy these kinds of solutions. So if you look at how things have been progressing, I will give you a few examples of how the costs have started constructing and playing out. One of course is to have devices, meeting at certain price point, we talked about how in India -- we talked that Nigel was remarking how constant still this Indian market is, but it’s important, once we delivered to a certain cost, we believe we can now deliver globally to scale. That’s very important, so if we build something in India it would deliver to the global market as well.

The streetlight example, let’s take that specifically and see what kind of benefits it would give. When a streetlight operates for about 12 hours a day, it costs about Rs.12, which is about $0.15, but when you start optimizing it and say, okay, this is a streetlight that is supported currently on halogen and you move it to LED, it brings a little bit of cost saving, in some cases significant as well. India is going through an LED revolution as you may have read in the newspapers, those streetlights are being converted, and that’s one distinct cost advantage.

Now they are looking and driving, let’s say, the usage and the electricity bills even lower by optimizing it. Let’s say you sync it with the astronomical clock, that 6:30 in the evening it comes up and let’s say 6:30 in the morning it shuts down linking to the astronomical clock because now you are connecting this controller to the Internet.

The second thing that you would do is during busy hours keep it at the brightest, let’s say between 7:00 and 10:00, you keep it at the brightest and after that you start minimizing it. You can control it down in 10 percent increments.

The point I am making is, you basically deliver intensity of light to the kind of requirement that you have. If it is busy, or if there is nobody on the street, or if there is a safety requirement -- a sensor will trigger up a series of lights, and so on.

So your ability to play around with just having streetlight being delivered to the requirement is so high that it brings down total cost. While I was telling you about $0.15 that you would spend per streetlight, that could be brought down to $0.05. So that’s the kind of advantage by better controlling the streetlights. The business case builds up, and a customer can save 60 to 70 percent just by doing this. Obviously, then the business case stands out.

The question that you are asking is an interesting one because each of the applications has its own way of returning the investment back, while the optimization of resources is being done. There is also a collateral positive benefit by saving the environment. So not only do I gain a business savings and business optimization, but I also pass on a general, bigger message of a green environment. Environment and safety are the two biggest benefits of implementing this and it would really appeal to our customers.

Gardner:It’s always great to put hard economic metrics on these things, but Shridhar just mentioned safety. Even when you can't measure in direct economics, it's invaluable when you can bring a higher degree of safety to an urban environment.

It opens up for more foot traffic, which can lead to greater economic development, which can then provide more tax revenue. It seems to me that there is a multiplier effect when you have this sort of intelligent urban landscape that creates a cascading set of benefits: the more data, the more efficiency; the more efficiency, the more economic development; the more revenue, the more data and so on. So tell us a little bit about this ongoing multiplier and virtuous adoption benefit when you go to intelligent urban environments?

Quality of life, under control

Upton:Yes, also it’s important to note that it differs almost by country to country and almost within region to region within countries. The interesting challenge with smart cities is that often you're dealing with elected officials rather than hard-nosed businessman who are only interested in the financial return. And it's because you're dealing with politicians and they are therefore representing the citizens in their area, either their city or their town or their region, their priorities are not always the same.

There is quite a variation of one of the particular challenges, particular social challenges as well as the particular quality of life challenges in each of the areas that they work in. So things like personal safety are a very big deal in some regions. I am currently in Tokyo and here there is much more concern around quality of life and mobility with a rapidly aging population and their challenges are somewhat different.
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But in India, the set of opportunities and challenges that are set out, they are in that combination of economic as well as social, and if you solve them and you essentially give citizens more peace of mind, more ability to be able to move freely, to be able to take part in the economic interaction within that area, then undoubtedly that leads to greater growth, but it is worth bearing in mind that it does vary almost city by city and region by region.

Gardner:Shridhar, do you have any other input into a cascading ongoing set of benefits when you get more data, more network opportunity. I guess I am trying to understand for a longer-term objective that being intelligent and data-driven has an ongoing set of benefits, what might those be? How can this be a long-term data and analytics treasure trove when you think about it in terms of how to provide better urban experiences?

Home/work help

Shridhar:From our perspective, when we looked at the customer benefits there is a huge amount of focus around the smart cities and how smart cities are benefiting from a network. If you look at the enterprise customers, they are also looking at safety, which is an overlapping application that a smart city would have.

So the enterprise wants to provide safety to its workers, for example, in mines or in difficult terrains, environments where they are focusing on helping them. Or women’s safety, which is as you know in India is a big thing as well -- how do you provide a device which is not very obvious and it gives the women all the safety that is there.

So all this in some form is providing data. One of the things that comes to my mind when you ask about how data-driven resources can be and what kind of quality it would give is if you action your mind to some of the customer services devices, there could be applications or let’s say a housewife could have a multiple button kind of a device where she can order a service.

Depending on the service she presses and an aggregate of households across India, you would know the trends and direction of a certain service, and mind you, it could be as simple as a three-button device which says Service A, Service B, Service C, and it could be a consumer service that gets extended to a particular household that we sell it as a service.

So you could get lots of trends and patterns that are emerging from that, and we believe that the customer experience is going to change, because no longer is a customer going to retain in his mind what kind of phone numbers or your, let's say, apps and all to order, you give them the convenience of just a button-press service. That immediately comes to my mind.

Feedback fosters change

The second one is in terms of feedback. You use the same three-button service to say, how well have you used utility -- or rather how -- what kind of quality of service that you rate multiple utilities that you are using, and there is toilet revolution in India. For example, you put these buttons out there, they will tell you at any given point of time what’s the user satisfaction and so on.

So these are all data that is getting gathered and I believe that while it is early days for us to go on and put out analytics and give you distinct kind of benefits that are there, but some of the things that customers are already looking at is which geographies, which segment, who are my biggest -- profile of the customers using this and so on. That kind of information is going to come out very, very distinctly.

The Smart Cities is all about experience. The enterprises are now looking at the data that is coming out and seeing how they can use it to better segment, and provide better customer experience which would obviously mean both adding to their top line as well as helping them manage their bottom line. So it's beyond safety, it's getting into the customer experience – the realm of managing customer experience.

Gardner:From a go-to-market perspective, or a go-to-city’s perspective, these are very complex undertakings, lots of moving parts, lots of different technologies and standards. How are Tata and HPE are coming together -- along with other service providers, Pointnextfor example? How do you put this into a package that can then actually be managed and put in place? How do we make this appealing not only in terms of its potential but being actionable as well when it comes to different cities and regions?

Upton:The concept of Smart Cities has been around for a while and various governments around the world have pumped money into their cities over an extended period of time.
We now have the infrastructure in place, we have the price points and we have IoT becoming mainstream.

As usual, these things always take more time than you think, and I do not believe today that we have a technology challenge on our hands. We have much more of a business model challenge. Being able to deploy technology to be able to bring benefits to citizens, I think that is finally getting to the point where it is much better understood where innovation of the device level, whether it's streetlights, whether it's the ability to measure water quality, sound quality, humidity, all of these metrics that we have available to us now. There has been very rapid innovation at that device level and at the economics of how to produce them, at a price that will enable widespread deployment.

All that has been happening rapidly over the last few years getting us to the point where we now have the infrastructure in place, we have the price points in place, and we have IoT becoming mainstream enough that it is entering into the manufacturing process of all sorts of different devices, as I said, ranging from streetlights to personal security devices through to track and trace devices that are built into the manufacturing process of goods.
That is now reaching mainstream and we are now able to take advantage of this massive data that’s now being produced to be able to produce even more efficient and smarter cities, and make them safer places for our citizens.

Gardner:Last word to you, Shridhar. If people wanted to learn more about the pilot proof of concept (PoC) that you are doing there at Jamshedpur and other cities, through the Smart Cities Mission, where might they go, are there any resources, how would you provide more information to those interested in pursuing more of these technologies?

Pilot projects take flight

Shridhar:I would be very happy to help them look at the PoCs that we are doing. I would classify the PoCs that we are doing is as far as safety is concerned, we talked of energy management in one big bucket that is there, then the customer service I spoke about, the fourth one I would say is more on the utility side. Gas and water are two big applications where customers are looking at these PoCs very seriously.

And there is very one interesting application in that one customer wanted for pest control, where he wanted his mouse traps to have sensors so that they will at any point of time know if there is a rat trap at all, which I thought was a very interesting thing.
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There are multiple streams that we have, we have done multiple PoCs, we will be very happy as Tata Communications team [to provide more information], and the HPE folks are in touch with us.

You could write to us, to me in particular for some period of time. We are also putting information on our website. We have marketing collateral, which describes this. We will do some of the joint workshops with HPE as well.

So there are multiple ways to reach us, and one of the best ways obviously is through our website. We are always there to provide more important help, and we believe that we can’t do it all alone; it’s about the ecosystem getting to know and getting to work on it.

While we have partners like HPE on the platform level, we also have partners such as Semtech, who established Center of Excellence in Mumbai along with us. So the access to the ecosystem from HPE side as well as our other partners is available, and we are happy to work and co-create the solutions going forward.


          How confluence of cloud, UC and data-driven insights newly empowers contact center agents        
The next BriefingsDirect customer experience insights discussion explores how Contact center-as-a-service (CCaaS) capabilities are becoming more powerful as a result of leveraging cloud computing, multi-mode communications channels, and the ability to provide optimized and contextual user experiences.

More than ever, businesses have to make difficult and complex decisions about how to best source their customer-facing services. Which apps and services, what data and resources should be in the cloud or on-premises -- or in some combination -- are among the most consequential choices business leaders now face. As the confluence of cloud and unified communications (UC) -- along with data-driven analytics -- gain traction, the contact center function stands out.

Listen to the podcast. Find it on iTunes. Get the mobile app. Read a full transcript or  download a copy. 

We’ll now hear why traditional contact center technology has become outdated, inflexible and cumbersome, and why CCaaS is becoming more popular in meeting the heightened user experience requirements of today.
Here to share more on the next chapter of contact center and customer service enhancements, is Vasili Triant, CEO of Serenovain Austin, Texas. The discussion is moderated by Dana Gardner, principal analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: What are the new trends reshaping the contact center function?

Triant:What’s changed in the world of contact center and customer service is that we’re seeing a generational spread -- everything from baby boomers all the way now to Gen Z.

With the proliferation of smartphones through the early 2000s, and new technologies and new channels -- things like WeChat and Viber -- all these customers are now potential inbound discussions with brands. And they all have different mediums that they want to communicate on. It’s no longer just phone or e-mail: It’s phone, e-mail, web chat, SMS, WeChat, Facebook, Twitter, LinkedIn, and there are other channels coming around the corner that we don't even know about yet.

Triant
When you take all of these folks -- customers or brands -- and you take all of these technologies that consumers want to engage with across all of these different channels – it’s simple, they want to be heard. It's now the responsibility of brands to determine what is the best way to respond and it’s not always one-to-one.

So it’s not a phone call for a phone call, it’s maybe an SMS to a phone call, or a phone call to a web chat -- whatever those [multi-channels] may be. The complexity of how we communicate with customers has increased. The needs have changed dramatically. And the legacy types of technologies out there, they can't keep up -- that's what's really driven the shift, the paradigm shift, within the contact center space.

Gardner:It’s interesting that the new business channels for marketing and capturing business are growing more complex. They still have to then match on the back end how they support those users, interact with them, and carry them through any sort of process -- whether it's on-boarding and engaging, or it’s supporting and servicing them.

What we’re requiring then is a different architecture to support all of that. It seems very auspicious that we have architectural improvements right along with these new requirements.

Triant:We have two things that have collided at the same time – cloud technologies and the growth of truly global companies.  

Most of the new channels that have rolled out are in the cloud. I mean, think about it -- Facebook is a cloud technology, Twitter is a cloud technology. WeChat, Viber, all these things, they are all cloud technologies. It’s becoming a Software-as-a-Service (SaaS)-based world. The easiest and best way to integrate with these other cloud technologies is via the cloud -- versus on-premises. So what began as the shift of on-premises technology to cloud contact center -- and that really began in 2011-2012 – has rapidly picked up speed with the adoption of multi-channels as a primary method of communication.

The only way to keep up with the pace of development of all these channels is through cloud technologies because you need to develop an agile world, you need to be able to get the upgrades out to customers in a quick fashion, in an easy fashion, and in an inexpensive fashion. That's the core difference between the on-premises world and the cloud world.

At the same time, we are no longer talking about a United States company, an Australia company, or a UK company -- we are talking about everything as global brands, or global businesses. Customer service is global now, and no one cares about borders or countries when it comes to communication with a brand.
Customer service is global now, and no one cares about borders or countries when it comes to communications with a brand.


Gardner:We have been speaking about this through the context of the end-user, the consumer. But this architecture and its ability to leverage cloud also benefits the agent, the person who is responsible for keeping that end-user happy and providing them with the utmost in intelligent services. So how does the new architecture also aid and abet the agent.

Triant: The agent is frankly one of the most important pieces to this entire puzzle. We talk a lot about channels and how to engage with the customer, but that's really what we call listening. But even in just simple day-to-day human interactions, one of the most important things is how you communicate back. There has been a series of time-and-motion studies done within contact centers, within brands -- and you can even look at your personal experiences. You don’t have to read reports to understand this.
The baseline for how an interaction will begin and end and whether that will be a happy or a poor interaction with the brand, is going to be dependent on the agents’ state of mind. If I call up and I speak to “Joe,” and he starts the conversation, he is in a great mood and he is having a great day, then my conversation will most likely end in a positive interaction because it started that way.

But if someone is frustrated, they had a rough day, they can’t find their information, their computers have been crashing or rebooting, then the interaction is guaranteed to end up poor. You hear this all the time, “Oh, can you wait a moment, my systems are loading. Oh, I can’t get you an answer, that screen is not coming up. I can't see your account information.” The agents are frustrated because they can’t do their job, and that frustration then blends into your conversation.

So using the technology to make it easy for the agent to do their job is essential. If they have to go from one screen to another screen to conduct one interaction with the customer -- they are going to be frustrated, and that will lead to a poor experience with the customer.

The cloud technologies like Serenova, which is web-based, are able to bring all those technologies into one screen. The agent can have all the information brought to them easily, all in one click, and then be able to answer all the customer needs. The agent is happy and that adds to the customer satisfaction. The conclusion of the call is a happy customer, which is what we all want. That’s a great scenario and you need cloud technology to do that because the on-premises world does not deliver a great agent experience.

One-stop service

Gardner:Another thing that the older technologies don't provide is the ability to have a flexible spectrum to move across these channels. Many times when I engage with an organization I might start with an SMS or a text chat, but then if that can’t satisfy my needs, I want to get a deeper level of satisfaction. So it might end up going to a phone call or an interaction on the web, or even a shared desktop, if I’m in IT support, for example.

The newer cloud technology allows you to intercept via different types of channels, but you can also escalate and vary between and among them seamlessly. Why is that flexibility both of benefit to the end-user as well as the agent?

Triant: I always tell companies and customers of ours that you don't have to over-think this; all you have to do is look to your personal life. Most common things that we as users deal with -- such as cell phone companies, cable companies, airlines, -- you can get onto any of these websites and begin chatting, but you can find that your interaction isn’t going well. Before I started at Serenova, I had these experiences where I was dealing with the cable company and -- chat, chat, chat, -- trying to solve my problem. But we couldn't get there, and so then we needed to get on the phone. But they said, “Here is our 800 number, call in.” I’d call in, but I’d have to start a whole new interaction.

Basically, I’d have to re-explain my entire situation. Then, I am talking with one person, and they have to turn around and send me an email, but I am not going to get that email for 30 to 45 minutes because they have to get off the phone, and get into another system and send it off. In the meantime, I am frustrated, I am ticked off -- and guess what I have done now? I have left that brand. This happens across the board. I can even have two totally different types of interactions with the company.

You can use a major airline brand as an example. One of our employees called on the phone trying to resolve an issue that was caused by the airline. They basically said, “No, no, no.” It made her very frustrated. She decided she’s going to fly with a different airline now. She then sent a social post [to that effect], and the airline’s VP of Customer Service answered it, and within minutes they had resolved her issue. But they already spent three hours on the phone trying to push her off through yet another channel because it was a totally different group, a totally different experience.

By leveraging technologies where you can pivot from one channel to another, everyone will get answers quicker. I can be chatting with you, Dana, and realize that we need to escalate to a voice conversation, for example, and I as the agent; I can then turn that conversation into a voice call. You don't have to re-explain yourself and you are like, “Wow, that's cool! Now I’m on the phone with a facility,” and we are able to handle our business.

As agent, I can also pivot simultaneously to an email channel to send you something as simple as a user guide or a series of knowledge-based articles that I may have at my fingertips as an agent. But you and I are still on the phone call. Even better yet, after-the-fact, as a business, I have all the analytics and the business intelligence to say that I had one interaction with Dana that started out as a web chat, pivoted to a phone call, and I simultaneously then sent a knowledge-based article of “X” around this issue and I can report on it all at once. Not three separate interactions, not three separate events -- and I have made you a happy customer.

Gardner:We are clearly talking about enabling the agent to be a super-agent, and they can, of course, be anywhere. I think this is really important now because the function of an agent -- we are already seeing the beginnings of this -- but it's going to certainly include and increase having more artificial intelligence (AI) and machine learning and associated data analytics benefits. The agent then might be a combination of human and AI functions and services.

So we need to be able to integrate at a core communications basis. Without going too far down this futuristic route, isn't it important for that agent to be an assimilation of more assets and more services over time?

Artificial Intelligence plus human support

Triant:I‘m glad you brought up AI and these other technologies. The reality is that we've been through a number of cycles around what this technology is going to do and how it is going to interact with an agent. In my view, and I have been in this world for a while, the agent is the most important piece of customer service and brand engagement. But you have to be able to bring information to them, and you have to be able to give information to your customers so that if there is something simple, get it to them as quick as possible -- but also bring all the relevant information to the agent.

AI has had multiple forms; it has existed for a long time. Sometimes people get confused because of marketing schemes and sales tactics [and view AI] as a way for cost avoidance, to reduce agents and eliminate staff by implementing these technologies. Really the focus is how to create a better customer experience, how to create a better agent experience.

We have had AI in our product for last three years, and we are re-releasing some components that will bring business intelligence to the forefront around the end of the year. What it essentially does is alIow you to see what you're doing as a user out on the Internet and within these technologies. I can see that you have been looking for knowledge-based articles around, for example, “why my refrigerator keeps freezing up and how can I defrost it.” You can see such things on Twitter and you can see these things on Facebook. The amount of information that exists out there is phenomenal and in real-time. I can now gather that information … and I can proactively, as a business, make decisions about what I want to do with you as a potential consumer.

I can even identify you as a consumer within my business, know how many products you have acquired from me, and whether you're a “platinum” customer or even a basic customer, and then make a decision.

For example, I have TVs, refrigerators, washer-dryers and other appliances all from the same manufacturer. So I am a large consumer to that one manufacturer because all of my components are there. But I may be searching a knowledge-based article on why the refrigerator continues to freeze up.

Now I may call in about just the refrigerator, but wouldn't it be great for that agent to know that I own 22 other products from that same company? I'm not just calling about the refrigerator; I am technically calling about the entire brand. My experience around the refrigerator freaking out may change my entire brand decision going forward. That information may prompt me to decide that I want to route that customer to a different pool of agents, based on what their total lifetime value is as a brand-level consumer.

Through AI, by leveraging all this information, I can be a better steward to my customer and to the agent, because I will tell you, an agent will act differently if they understand the importance of that customer or to know that I, Vasili, have spent the last two hours searching online for information, which I posted on Facebook and I posted on Twitter.
Through AI, by leveraging all this information, I can be a better steward to the customer and to the agent.

At that point, the level of my frustration already has reached a certain height on a scale. As an agent, if you knew that, you might treat me differently because you already know that I am frustrated. The agent may be able to realize that you have been looking for some information on this, realize you have been on Facebook and Twitter. They can then say: “I am really sorry, I'm not able to get you answers. Let me see how I can help you, it seems that you are looking online about how to keep the refrigerator from freezing up.”

If I start the conversation that way, I've now diffused a lot of the frustration of the customer. The agent has already started that interaction better. Bringing that information to that person, that’s powerful, that’s business intelligence -- and that’s creating action from all that information.

Keep your cool

Gardner:It’s fascinating that that level of sentiment analysis brings together the best of what AI and machine learning can do, which is to analyze all of these threads of data and information and determine a temperature, if you will, of a person's mood and pass that on to a human agent who can then have the emotional capacity to be ready to help that person get to a lower temperature, be more able to help them overall.

It’s becoming clear to me, Vasili, that this contact center function and CCaaS architectural benefits are far more strategic to an organization than we may have thought, that it is about more than just customer service. This really is the best interface between a company -- and all the resources and assets it has across customer service, marketing, and sales interactions. Do you agree that this has become far more strategic because of these new capabilities?

Triant:Absolutely, and as brands begin to realize the power of what the technology can do for their overall business, it will continue to evolve, and gain pace around global adoption.
As brands begin to realize the power of what the technology can do for their overall businesses, it will continue to evolve and gain global adoption.

We have only scratched the surface on adoption of these cloud technologies within organizations. A majority of brands out there look at these interactions as a cost of doing business. They still seek to reduce that cost versus the lifetime value of both the consumer, as well as the agent experience. This will shift, it is shifting, and there are companies that are thriving by recognizing that entire equation and how to leverage the technologies.

Technology is nothing without action and result. There have been some really cool things that have existed for a while, but they don’t ever produce any result that’s meaningful to the customer so they never get adopted and deployed and ultimately reach some type of a mass proliferation of results.

Gardner:You mentioned cost. Let’s dig into that. For organizations that are attracted to the capabilities and the strategic implications of CCaaS, how do we evaluate it in terms of cost? The old CapEx approach often had a high upfront cost, and then high operating costs, if you have an inefficient call center. Other costs involve losing your customers, losing brand affinity, losing your perception in the market. So when you talk to a prospect or customer, how do you help them tease out the understanding of a pay-as-you-go service as highly efficient? Does the highly empowered agent approach save money, or even make money, and CCaaS becomes not a cost center but a revenue generator?

Cost consciousness

Triant:Interesting point, Dana. When I started at Serenova about five years ago, customers all the time would say, “What’s the cost of owning the technology?” And, “Oh, my, on-premises stuff has already depreciated and I already own it, so it’s cheaper for me to keep it.” That was the conversation pretty much every day. Beginning in 2013, it rapidly started shifting. This shift was mainly driven by the fact that organizations started realizing that consumers want to engage on different channels, and the on-premises guys couldn’t keep up with this demand.

The cost of ownership no longer matters. What matters is that the on-premises guys just literally could not deliver the functionality. And so, whether that's Cisco, Avaya, or Shoretel, they quickly started falling away in consideration for technology companies that were looking to deploy applications for their business to meet these needs.

The cost of ownership quickly disappeared as the main discussion point. Instead it came around to, “What is the solution that you're going to deliver?” Customers that are looking for contact center technologies are beginning to take a cloud-first approach. And once they see the power of CCaaS through demonstration and through some trials of what an agent can do – and it’s all browser-based, there is no client install, there is no equipment on-premises - then it takes on a life of its own. It’s about, “What is the experience going to be? Are these channels all integrated? Can I get it all from one manufacturer?”

Following that, organizations focus on other intricacies around - Can it scale? Can it be redundant? Is it global? But those become architectural concerns for the brands themselves. There is a chunk of the industry that is not looking at these technologies, and they are stuck in brand euphoria or have to stay with on-premises infrastructure, or with a certain vendor because of their name or that they are going to get there someday.

As we have seen, Avaya has declared bankruptcy. Avaya does not have cloud technologies despite their marketing message. So the customers that are in those technologies now realize they have to find a path to keep up with the basic customer service at a global scale. Unfortunately, those customers have to find a path forward and they don’t have one right now.
It's less about cost of ownership and it’s more about the high cost of not doing anything. If I don't do anything, what’s going to be the cost? That cost ultimately becomes - I’m not going to be able to have engagement with my customers because the consumers are changing.
It's less about cost of ownership and it's more about the high cost of not doing anything.

Gardner:What about this idea of considering your contact center function not just as a cost center, but also as a business development function? Am I being too optimistic.

It seems to me that as AI and the best of what human interactions can do combine across multichannels, that this becomes no longer just a cost center for support, a check-off box, but a strategic must-do for any business.

Multi-channel customer interaction

Triant:When an organization reaches the pinnacle of happiness within what these technologies can do, they will realize that no longer do you need to have delineation between a marketing department that answers social media posts, an inside sales department that is only taking calls for upgrades and renewals, and a customer service department that’s dealing with complaints or inbound questions. They will see that you can leverage all the applications across a pool of agents with different skills.

I may have a higher skill around social media than over voice, or I may have a higher skill level around a sales activity, or renewal activity, over customer service problems. I should be able to do any interaction. And potentially one day it'll just be customer interaction department and the channels are just a medium of inbound and outbound choice for a brand.

But you can now take information from whatever you see the customer doing. Each of their actions have a leading indicator, everything has a predictive action prior to the inbound touch, everything does. Now that a brand can see that, it will be able to have “consumer interaction departments,” and it will be properly routed to the right person based on that information. You’ll be able to bring information to that agent that will allow them to answer the customer’s questions.

Gardner:I can see how that agent’s job would be very satisfying and fulfilling when you are that important, when you have that sort of a key role in your organization that empowers people. That’s good news for people that are trying to find those skills and fill those positions.

Vasili, we only have a few minutes left, but I’d love to hear about a couple of examples. It’s one thing to tell, it’s another thing to show. Do we have some examples of organizations that have embraced this concept of a strategic contact center, taken advantage of those multi-channels, added perhaps some intelligence and improved the status and capability of the agents -- all to some business benefit? Walk us through a couple of actual use cases where this has all come together.

Cloud communication culture shift

Triant:No one has reached that level of euphoria per se, but there are definitely companies that are moving in that direction.

It is a culture change, so it takes time. I know as well as anybody what it takes to shift a culture, and it doesn't happen overnight. As an example, there is a ride-hailing company that engages in a different way with their consumer, and their consumer might be different than what you think from the way I am describing it. They use voice systems and SMS and often want to pivot between the two. Our technology actually allows the agent to make that decision even if they aren’t even physically in the same country. They are dynamically spread across multiple countries to answer any question they may need to answer based on time and day.

But they can pivot from what’s predominantly an SMS inbound and outbound communication into a voice interaction, and then they can also follow up with an e-mail, and that’s already happened. Now, it initially started with some SMS inbound and outbound, then they added voice – an interesting move as most people think adding voice is what people are getting away from. What everyone has begun to realize is that live communication ultimately is what everybody looks for in the end to solve the more complex problems.
What everyone has begun to realize is that live communication ultimately is what everybody looks for in the end to solve the more complex problems.

That's one example. Another company that provides the latest technology in food order and delivery initially started with voice-only to order and deliver food. Now they've added SMS confirmations automatically, and e-mail as well for confirmation or for more information from the inbound voice call. And now, once they are an existing customer, they can even start an order from an SMS, and pivot back to a voice call for confirmation -- all within one interaction. They are literally one of the fastest growing alternative food delivery companies, growing at a global scale.

They are deploying agents globally across one technology. They would not be able to do this with legacy technologies because of the expense. When you get into these kinds of high-volume, low-margin businesses, cost matters. When you can have an OpEx model that will scale, you are adding better customer service to the applications, and you are able to allow them to build a profitable model because you are not burning them with high CapEx processes.

Gardner:Before we sign off, you had mentioned your pipeline about your products and services, such as engaging more with AI capabilities toward the end of the year. Could give us a level-set on your roadmap? Where are your products and services now? Where do you go next?

A customer journey begins with insight

Triant:We have been building cloud technologies for 16 years in the contact center space. We released our latest CCaaS platform in March 2016 called CxEngage. We then had a major upgrade to the platform in March of this year, where we take that agent experience to the next level. It’s really our leapfrog in the agent interface and making it easier, bringing in more information to them.

Where we are going next is around the customer journey -- predictive interactions. Some people call it AI, but I will call it “customer journey mapping with predictive action insights.” That’s going to be a big cornerstone in our product, including business analytics. It’s focused around looking at a combination of speech, data and text -- all simultaneously creating predictive actions. This is another core area we are going in an and continue to expand the reach of our platform from a global scale.

At this point, we are a global company. We have the only global cloud platform built on a single software stack with one data pipeline. We now have more users on a pure cloud platform than any of our competitors globally. I know that’s a big statement, but when you look at a pure cloud infrastructure, you're talking in a whole different realm of what services you are able to offer to customers. Our ability to provide a broad reach including to Europe, South Africa, Australia, India, and Singapore -- and still deliver good cloud quality at a reasonable cost and redundant fashion –  we are second to none in that space.

Gardner:I’m afraid we will have to leave it there. We have been listening to a sponsored BriefingsDirect discussion on how CCaaS capabilities are becoming more powerful as a result of cloud computing, multimode communications channels, and the ability to provide optimized and contextual user experiences.

And we’ve learned how new levels of insight and intelligence are now making CCaaS approaches able to meet the highest user experience requirements of today and tomorrow. So please join me now in thanking our guest, Vasili Triant, CEO of Serenova in Austin, Texas.

Triant:Thank you very much, Dana. I appreciate you having me today.

Gardner:This is Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this ongoing series of BriefingsDirect discussions. A big thank you to our sponsor, Serenova, as well as to you, our audience. Do come back next time and thanks for listening.

Listen to the podcast. Find it on iTunes. Get the mobile app. Read a full transcript or  download a copy. Sponsor: Serenova.

Transcript of a discussion on how contact center-as-a-service capabilities are becoming more powerful to provide optimized and contextual user experiences for agents and customers. Copyright Interarbor Solutions, LLC, 2005-2017. All rights reserved.

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          Women in business leadership -- networking their way to success        
The next BriefingsDirect digital business insights panel discussion focuses on the evolving role of women in business leadership. We’ll explore how pervasive business networks are impacting relationships and changes in business leadership requirements and opportunities for women.

Listen to the podcast. Find it on iTunes. Get the mobile app. Read a full transcript or download a copy. Sponsor: SAP Ariba.

To learn more about the transformation of talent management strategies as a result of digital business and innovation, please join me in welcoming our guests, Alicia Tillman, Chief Marketing Officer at SAP Ariba, and Lisa Skeete Tatum, Co-founder and CEO of Landit in New York. The panel was recorded in association with the recent 2017 SAP Ariba LIVE conference in Las Vegas, and is moderated by Dana Gardner, principal analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: Alicia, looking at a confluence of trends, we have the rise of business networks and we have an advancing number of women in business leadership roles. Do they have anything to do with one another? What's the relationship?

Tillman
Tillman: It is certainly safe to say that there is a relationship between the two. Networks historically connected businesses mostly from a transactional standpoint. But networks today are so much more about connecting people. And not only connecting them in a business context, but also from a relationship-standpoint as well.

There is as much networking and influence that happens in a digital network as  does from meeting somebody at an event, conference or forum. It has really taken off in the recent years as being a way to connect quickly and broadly -- across geographies and industries. There is nothing that brings you speed like a network, and that’s why I think there is such a strong correlation to how digital networking has taken off -- and what a true technical network platform can allow.

Gardner: When people first hear “business networks,” they might think about transactions and applications talking to applications. But, as you say, this has become much broader in the last few years; business networks are really about social interactions, collaboration, and even joining companies culturally.

How has that been going? Has this been something that’s been powerful and beneficial to companies?

Tillman: It’s incredibly powerful and beneficial. If you think about how buying habits are these days, buyers are very particular about the goods that they are interested in, and, frankly, the people that they source from.

Skeete Tatum
If I look at my buying population in particular at SAP Ariba, there is a tremendous movement toward sustainable goal or fair-trade types of responsibilities, of wanting to source goods from minority-owned businesses, wanting to source only organic or fair-trade products, wanting to only partner with organizations where they know within their supply chain the distribution of their product is coming from locations in the world where the working conditions are safe and their employees are being paid fairly.

A network allows for that; the SAP Ariba Network certainly allows for that, as we can match suppliers directly with what those incredibly diverse buyer needs are in today’s environment.

Gardner: Lisa, we just heard from Alicia about how it's more important that companies have a relationship with one another and that they actually look for culture and character in new ways. Tell us about Landit, and how you're viewing this idea of business networks changing the way people relate to their companies and even each other?

Skeete Tatum: Our goal at Landit is to democratize career success for women around the globe. We have created a technology platform that not only increases the success and engagement of women in the workplace, but it also enables companies in this new environment to attract, develop, and retain high-potential diverse talent.
Our goal at Landit is to democratize career success for women around the globe.

We do that by providing each woman with the personalized playbook in the spirit of one-size-fits-one. That empowers them with the access to the tools, the resources, the know-how, and, yes, the human connections that they need to more successfully navigate their paths.

It’s really in response to the millions of women who will find themselves at an inflection point; whether they are in a company that they love but are just trying to figure out how to more successfully navigate there, or they may be feeling a little stuck and are not sure how to get out. The challenge is: “I am motivated, I have the skills, I just don’t know where to start.”

We have really focused on knitting what we believe are those key elements together -- leveraged by technology that actually guides them. But we find that companies in this new environment are often overwhelmed and trying to figure out a way to manage this new diverse workforce in this era of connectedness. So we give them a turnkey, one-size-fits-one solution, too.

As Alicia mentioned, in this next stage of collaborative businesses, there are really two things. One, we are more networked and more visible than ever before, which is great, because it’s created more opportunities and flexibility than we have seen -- not to mention more access. However, those opportunities are highly dependent on how someone showcases their value, their contribution, and their credibility, which makes it even more important to cultivate not only your brand and your network. It goes beyond just individual capabilities of getting at what is the sponsorship in the support of a strong network.

The second thing I would say, that Alicia also mentioned, is that today’s business environment -- which is more global, more diverse in its tapestry -- requires businesses to create an environment where everyone feels valued. People need to feel like they can bring the full measure of their talent and passion to the workplace. Companies want amazing talent to find a place at their company.

Gardner: If I’m at a company looking to be more diverse, how would I use Landit to accomplish that? Also, if I were an individual looking to get into the type of company that I want to be involved with, how would I use Landit?

Connecting supply and demand for talent

Skeete Tatum: As an individual, when you come on to Landit, we actually give you one of the key ingredients for success. Because we often don’t know what we don’t know, we knit together the first step, of “Where do I fit?” If you are not in a place that fits with your values, it’s not sustainable.

So we help you figure out what is it that fits with “all of me,” and we then connect you to those opportunities. Many times with diversity programs, they are focused just on the intake, which is just one component. But you want people to thrive when they get there.
Many times with diversity programs, they are focused just on the intake, which is just one component. But you want people to thrive when they get there.

And so, whether it is building your personal brand or building your board of advisors or continuing with your skill development in a personalized, relevant way -- or access to coaching because often many of us don’t have that unless we are in the C-suite on the way -- we are able to knit that together in a way that is relevant, that’s right-sized for the individual.

For the company, we give them a turnkey solution to invest in a scalable way, to touch more lives across their company, particularly in a more global environment. Rather than having to place multiple bets, they place one bet with Landit. We leverage that one-size-fits-one capability with things that we all know are keys to success. We are then able to have them deliver that again, whether it is to the newly minted managers or people they have just acquired or maybe they are leaders that they want to continue to invest in. We enable them to do that in a measurable way, so that they can see the engagement and the success and the productivity.

Gardner: Alicia, I know that SAP Ariba is already working to provide services to those organizations that are trying to create diversity and inclusion within their supply chains. How do you see Landit fitting into the business network that SAP Ariba is building around diversity?

Tillman: First, the SAP Ariba Network is the largest business to business (B2B) network on the planet. We connect more than 2.5 million companies that transact over $1 trillion in commerce annually. As you can imagine, there is incredible diversity in the buying requirements that exist amongst those companies that are located in all parts of the world and work in virtually every industry.

One of things that we offer as an organization is a Discoverytool. When you have a network that is so large, it can be difficult and a bit daunting for a buyer to find the supplier that meets their business requirements, and for a supplier to find their ideal buyer. So our SAP Ariba Discovery application is a matching service, if you will, that enables a buyer to list their requirements. You then let the tool work for you to allow matching you to suppliers that most meet your requirements, whatever they may be.

I’m very proud to have Lisa present at our Women in Leadership Forum at SAP AribaLIVE 2017. I am showcasing Lisa not only because of her entrepreneurial spirit and the success that she’s had in her career -- that I think will be very inspirational and motivational to women who are looking to continue to develop their careers -- but she has also created a powerful platform with Landit. For women, it helps provide a digital environment that allows them to harness precisely what it is that’s important to them when it comes to career development, and then offers the coaching in the Landit environment to enable that.
For women, it helps provide a digital environment that allows them to harness precisely what it is that’s important to them when it comes to career development.

Landit also offers companies an ability to support their goals around gender diversity. They can look at the Landit platform and source talent that is not only very focused on careers -- but also supports a company in their diversity goals. It’s a tremendous capability that’s necessary and needed in today’s environment.

Gardner: Lisa, what has changed in the past several years that has prompted this changed workforce? We have talked about the business network as an enabler, and we have talked about social networks connecting people. But what's going to be different about the workforce going forward?

Collaborative visibility via networking

Skeete Tatum: There are three main things. First, there is a recognition that diversity is not a “nice to have,” it’s a “must-have” from a competitive standpoint; to acquire the best ideas and gain a better return on capital. So it’s a business imperative to invest in and value diversity within one's workforce. Second, businesses are continuing to shift toward matching opportunities with the people who are best able to do that job, but in a less-biased way. Thirdly, business-as-usual isn’t going to work in this new reality of career management.
Business-as-usual isn’t going to work in this new reality of career management.

It’s no longer one- or bi-directional, where it’s just the manager or the employee. It’s much more collaborative and driven by the individual. And so all of these things … where there is much more opportunity, much more freedom. But how do you anchor that with a problem and a framework and a connectivity that enables someone to more successfully navigate the new environment and new opportunities? How do you leverage and build your network?  Everyone knows they need to do it, but many people don’t know how to do it. Or when your brand is even more important, visibility is more important, how do you develop and communicate your accomplishments and your value? It is the confluence of those things coming together that creates this new world order.

Gardner: Alicia, one of the biggest challenges for most businesses is getting the skills that they need in a timely fashion. How do we get past the difficulty of best matching hiring?  How do we use business networks to help solve that?

Tillman: This is the beauty of technology. Technology is an enabler in business to form relationships more quickly, and to transact more quickly. Similarly, technology also provides a network to help you grow from a development standpoint. Lisa’s organization, Landit, is one example of that.

Within SAP Ariba we are very focused on closing the gap in gaining the skills that are necessary to be successful in today’s business environment. I look at the offering of SAP SuccessFactors- which is  focused on empowering the humancapital management (HCM) organization to lead performance management and career development. And SAP Fieldglass helps companies find and source the right temporary labor that they need to service their most pressing projects. Combine all that with a business network, and there is no better place in today’s environment to find something you need -- and find it quickly.

But it all comes down to the individual’s desire to want to grow their skills, or find new skills, to get out of their comfort zone and try something new. I don’t believe there is a shortage of tools or applications to help enable that growth and talent. It comes down to the individual’s desire to want to grab it and go after it.

Maximize your potential with technology

Skeete Tatum: I couldn’t agree more. The technology and the network are what create the opportunity. In the past, there may have been a skills gap, but you have to be able to label it, you have to be able to identify it in a way that is relevant to the individual. As Alicia said, there are many opportunities out there for development, but how do you parse that down and deliver it to the individual in a way that is relevant -- and that’s actionable? That’s where a network comes in and where the power of one can be leveraged in a scalable way.

Now is probably one of the best times to invest in and have an individual grow to reach their full potential. The desire to meet their goals can be leveraged by technology in a very personal way.

Gardner: As we have been hearing here at SAP Ariba LIVE 2017, more-and-more technologies along the lines of artificial intelligence (AI) and machine learning (ML) – are taking advantage of all the data and analyzing it and making it actionable -- can now be brought to bear on this set of issues of matching workforce requirements with skill sets.

Where should we expect to see these technologies reduce the complexity and help companies identify the right workforce, and the workforce identify the right companies?

Having the data and being able to quantify and qualify it gives you the power to set a path forward.
Skeete Tatum: Having the data and being able to quantify and qualify it gives you the power to set a path forward. The beauty is that it actually enables everyone to have the opportunity to contribute, the opportunity to grow, and to create a path and a sense of belonging by having a way to get there. From our perspective, it is that empowerment and that ownership -- but with the support of the network from the overall organization -- that enables someone to move forward. And it enables the organization to be more successful and more embracing of this new workforce, this diverse talent.

Tillman: Individuals should feel more empowered today than ever before to really take their career development to unprecedented levels. There are so many technologies, so many applications out there to help coach you on every level. It’s up to the individual to truly harness what is standing in front of them and to really grab hold of it -- and use it to their advantage to reach their career goal.

Gardner: Lisa, what should you be thinking about from a personal branding perspective when it comes to making the best use of tools like Landit and business networks?

Skeete Tatum: The first thing is that people actually have to think of themselves as a brand, as opposed to thinking that they are bragging or being boastful. The most important brand you have is the brand of you.
The most important brand you have is the brand of you.

Second, people have to realize that this notion of building your brand is something that you nurture and it develops over time. What we believe is important is that we have to make it tangible, we have to make it actionable, and we have to make it bite-size, otherwise it seems overwhelming.

So we have defined what we believe are the 12 key elements for anyone to have a successful brand, such as have you been visible, do you have a strategic plan of you, are you seeking feedback, do you have a regular cadence of interaction with your network, et cetera. Knowing what to do and how to do it and at what cadence and at what level is what enables someone to move forward. And in today’s environment, again, it’s even more important.

Pique their curiosity by promoting your own

Tillman: Employers want to be sure that they are attracting candidates and employing candidates that are really invested in their own development. An employer operates in the best interest of the employee in terms of helping to enable tools and allow for that development to occur. At the same time, where candidates can really differentiate themselves in today’s work environment is when they are sitting across the table and they are in that interview. It's really important for a candidate to talk about his or her own development and what are they doing to constantly learn and support their curiosity.

Employers want curious people. They want those that are taking advantage of development and tools and learning, and these are the things that I think set people apart from one another when they know that individually they are going to go after learning opportunities and push themselves out of their comfort zone to take themselves – and ultimately the companies that employ them - to the next level.

Gardner: Before we close out, let’s take a peek into the crystal ball. What, Alicia, would be your top two predictions given that we are just on sort of an inflection point with this new network, with this new workforce and the networking effect for it?

Tillman: First, technology is only going to continue to improve. Networks have historically enabled buyers and sellers to come together and transact to build their organizations and support growth, but networks are taking on a different form.

Technology is going to continue to enable priorities professionally and priorities personally. Technology is going to become a leading enabler of a person’s professional development.

Second, individuals are going to set themselves apart from others by their desire and their hunger to really grab hold of that technology. When you think about decision-making among companies in terms of candidates they hire and candidates they don’t, employers are going to report back and say, “One of the leading reasons why I selected one candidate over another is because of their desire to learn and their desire to grab hold of technologies and networks that were standing in front of them to bring their careers to an unprecedented level.”

Gardner: Lisa, what are your top two predictions for the new workforce and particularly for diversity playing a bigger role?
Technology ... enables people to bring their full selves, the full measure of their talent, to the workplace.

Skeete Tatum: Technology is the ultimate leveler of the playing field. It enables companies as well as the individual to make decisions based on things that matter. That is what enables people to bring their full selves, the full measure of their talent, to the workplace.

In terms of networks in particular, they have always been a key element to success but now they are even more important. It actually poses a special challenge for diverse talent. They are often not part of the network, and they may have competing personal responsibilities that make the investment of the time and the frequency in those relationships a challenge.

Sometimes there is a discomfort with how to do it. We believe that through technology people will have to get comfortable with being uncomfortable. They need to learn not only how to codify their network, but also have the right access to the right person with the right cadence, and access to that know how, that guidance, can be delivered through technology.

Listen to the podcast. Find it on iTunes. Get the mobile app. Read a full transcript or download a copy. Sponsor: SAP Ariba.

          SAP Ariba and MercadoLibre to consumerize business commerce in Latin America         
The next BriefingsDirect global digital business panel discussion explores how the expansion of automated tactical buying for business commerce is impacting global markets, and what's in store next for Latin America.

We’ll specifically examine how “spot buy” approaches enable companies to make time-sensitive and often mission-critical purchases, even in complex and dynamic settings, like Latin America.

Listen to the podcast. Find it on iTunes. Get the mobile app. Read a full transcript or download a copy.

To learn more about the rising tide of such tactical business buying improvements, please join our guests, Karen Bruck, Corporate Sales Director at MercadoLibre.comin Buenos Aires, Argentina; Diego Cabrera Canay, Director of Financial Planning at MercadoLibre, and Tony Alvarez, General Manager of SAP Ariba's Spot Buy Business. The panel was recorded at the recent 2017 SAP Ariba LIVE conference in Las Vegas, and is moderated by Dana Gardner, principal analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: SAP Ariba Spot Buy has been in the market a few years. Tell us about where it has rolled out so far, why certain markets are being approached, and then about Latin America specifically.

Alvarez
Alvarez: The concept is a few years old, but we've been delivering SAP Ariba Spot Buy for about a year. We began in the US, and over the past 12 months the concept of Spot Buy has progressed because of our customer base. Our customer base has pushed us in a direction that is, quite frankly, even beyond Spot Buy -- and it’s getting into trusted, vetted content.

We are approaching the market with a two-pronged strategy of, yes, we have the breadth of content so that when somebody goes into an SAP Ariba application they can find what they are looking for, but we also now have parameters and controls that allow them to vet that content and to put a filter on it.

Over the last 12 months, we've come a long way. We are live in the US, and with early access in the UK and Germany. We just went live in Australia, and now we are very much looking forward to going live and moving fast into Latin America with MercadoLibre.

Gardner: Spot buying, or tactical buying, is different from strategic or more organized long-term buying. Tell us about this subset of procurement.

Alvarez: SAP Ariba is a 20 year-old company, and its roots are in that rigorous, sourced approach. We do hundreds of billions of dollars through contract catalog on the Ariba Network, but there's a segment -- and we believe it's upward of 15% of spend -- that is spot buy spend. The procurement professional often has no idea what's being bought. And I think there are two approaches to that -- either ignorance is bliss and they are glad that it’s out of their purview, or it also keeps them up at night.

SAP Ariba Spot Buy allows them to have visibility into that spend. By partnering with providers like MercadoLibre, they have content from trusted and vetted sellers to bring to the table – so it's a really nice match for procurement.

Liberating limits

Gardner: The trick is to allow for flexibility and being dynamic, but also putting in enough rules and policies so that things don’t go off-track.

Alvarez:Exactly. For example, it’s like putting a filter on your kids’ smartphone. You want them to be able to be liberated so they can go and do as they please with phone calls -- but not to go off the guardrails.

Gardner: Karen, tell us about MercadoLibre and why Latin America might be a really interesting market for this type of Spot Buy service.

Bruck: MercadoLibre is a leading e-commerce platform in Latin America, where we provide the largest marketplaces in 16 different countries. Our main markets are Brazil, Mexico, and Argentina, and that’s where we are going the start this partnership with SAP Ariba.

Bruck
We have upward of 60 million items listed on our platform, and this breadth of supplies will make purchasing very exciting. Latin America is a complicated market -- and we like this complexity. We do very well.

It’s complicated because there are different rates of inflation in different countries, and so contracts can be hard to complete. What we bring to the table is an assortment of great payment and shipping solutions that make it easy for companies to purchase items. As Tony was saying, these are not under long-term contracts, but we still get to make use of this vast supply.

Gardner: Tony mentioned that maybe 15% of spend is in this category. Diego, do you think that that number might be higher in some of the markets that you serve?

Cabrera Canay: That’s probably the number -- but that is a big number in terms of the spend within companies. So we have to get there and see what happens.

Progressive partnership 

Gardner: Tony, tell us about the partnership. What is MercadoLibre.com bringing to the table? What is Ariba bringing to the table? How does this fit together for a whole that is greater than the sum of its parts?

Alvarez: It really is a well-matched partnership. SAP Ariba is the leading cloud procurement platform, period. When you look in Latin America, our penetration with SAP Enterprise Resource Planning (ERP) is even greater. We have a very strong installed base with SAP ERP.

Our plan is to take the SAP Ariba Spot Buy content and make it available to the SAP installed base. So this goes way beyond just SAP Ariba. And when you think about what Karen mentioned -- difficulties in Latin America with high inflation -- the catalog approach is not used as much in Latin America because everything is so dynamic.

For example, you might sign a contract but in just in a couple of weeks that contract may be obsolete, or unfavorable because of a change in pricing. But once we build controls and parameters in SAP Ariba Spot Buy, you can layer that on top of MercadoLibre content, which is super-broad. If you're looking for it you’re going to find it, and that content is constantly updated. You gain real-time access to the latest information, and then the procurement person gets the benefit of control.

So I'm very optimistic. As Diego mentioned, I think 15% is really on the low-end in Latin America for this type of spend. I think this will be a really nice way to put digital catalog buying in the hands of large enterprise buyers.

Gardner: Speaking of large enterprise buyers, if I'm a purchasing official in one of your new markets, what should I be thinking about how this is going to benefit me?

Transparent, trusted transactions

It saves a lot of time, it makes the comparison very transparent, and you are able to control the different options. Overall, it's a win-win ... a partnership, a match made in heaven.
Bruck: Let me talk about this from experience. As a country manager at MercadoLibre, I had to do a lot of the procurement, together with our procurement officers. It was really frustrating at times because all of these purchases had to be one-off engagements, with a different vendor every time. That takes a lot of time. You also have to bring in price comparisons, and that’s not always a simple process.

So what this platform gives you is the ability to be very transparent about prices and among different supplies. That makes it very easy to be able to buy every time without having to call and get the vendor to be in your own buying platform.

It saves a lot of time, it makes the comparison very transparent, and you are able to control the different options. Overall, it’s a win-win. So I do believe this is a partnership, a match made in heaven.

We were also very interested in business-to-business (B2B) industries. When Tony and SAP Ariba came to our offices to offer this partnership, we thought this would be a great way to leverage their needs with our supply and make it work.

Gardner: For sellers, this enables them to do repeated business more easily, more automated and so at scale. For buyers, with transparency they have more insight into getting the best prices, the best terms of delivery. Let's expand on that win-win. Diego, tell us about the business benefits for all parties.

Big and small, meet at the mall 

Cabrera Canay: In the past few years, we have been working to make MercadoLibre the biggest “mall” in e-commerce. We have the most important brands and the most important retailers selling through MercadoLibre.

Cabrera Canay
What differentiates us is that we are confident we have the best prices -- and also other great services such as free shipping, easy payments, and financing. We are sure that we can offer the buyers better purchasing.

Obviously, from the side of sellers, this all provides higher demand, it raises the bar in terms of having qualified buyers, and then giving the best services. That’s very exciting for us.

Gardner: Tony, we mentioned large enterprises, but this cuts across a great deal more of the economy, such as small- to medium sized (SMB) businesses. Tell us about how this works across diverse economies where there are large players but lots of small ones, too?

Alvarez: On the sales side, this gives really small businesses opportunity to reach large enterprise buyers that probably weren’t there before.

Diego was being modest, but MercadoLibre's payment structure, MercadoPago, is incredibly robust, and it's incredibly valuable to that end-seller, and also to the buyer.

Just having that platform and then connecting -- you are basically taking two populations, the large and small sellers, and the large and small buyers, and allowing them to commingle more than they ever had in the past.

Gardner: Karen, as you mentioned from your own experience, when you're dealing with paper, and you are dealing with one-offs, it's hard to just keep track of the process, never mind to analyze it. But when we go digital, when we have a platform, when we have business networks at work, then we can start to analyze things for companies -- and more broadly into markets.

How do you see this partnership accelerating the ability to leverage analytics, leverage some of the back-end platform technologies with SAP HANAand SAP Ariba, and making more strides toward productivity for your customers?

Data discoveries

Bruck:Right. When everything is tracked, as this will be, because every single purchase will be inside their SAP Ariba platform, it is all part of your “big data.” So then you can actually drop it, control it, analyze it, and say, “Hey, maybe these particular purchases mean that we should have long-term contracts, or that our long-term contracts were not priced correctly,” and maybe that's an opportunity to save money and lower costs.

So once you can track data, you can do a lot of things, and discover new opportunities for either being more efficient or reducing costs – and that's ultimately what we all want in all the departments of our companies.

Gardner: And for those listeners and readers who are interested in taking advantage of these services, and ultimately that great ability to analyze, what should they be doing now to get ready? Are there some things they could do culturally, organizationally, in order to become that more digital business when these services are available to them?
Paper is terrible for companies; you have to rethink your purchase processing in a digital way.

Cabrera Canay: I can talk about in our own case, where we are rebuilding our purchase processes. Paper is terrible for companies; you have to rethink your purchase processing in a digital way. Once you do it, SAP Ariba is a great solution, and with SAP Ariba Spot Buy we will have the best conditions for the buyers.

Bruck: It’s a natural process. People are going digital and embracing these new trends and technologies. It will make them more efficient. If they get up to speed quickly, it will become less about controlling stuff that they don't need to control. They will really understand the benefits, so it will be a natural adoption.

Gardner: Tony, coming back full circle, as you have rolled SAP Ariba Spot Buy out from North America to Europe to Asia-Pacific, and now to Latin America -- what have you learned in the way people use it?

Alvarez: First, at a macro level, people have found this to be a useful tool to replace some of the contracts that were less important, and so they can rely on marketplaces.

Second, we’ve really found as we’ve deployed in the US that a lot of times multinational companies are like, “Hey, that's great, I love this, but I really want to use this in Latin America.” So they want to go and get visibility elsewhere.

Turn-key technique

Third, they want a tool that doesn't require any training. If I’m a procurement professional, I want my users to already be expert at using the tool. We've designed this in the process context, and in concert with the content partners. You can just walk up and start using it. You don’t have to be an expert, and it keeps you within the guardrails without even thinking about it.

Gardner: And being a cloud-based, software-as-a-service (SaaS) solution you're always analyzing how it's being used -- going after that ultimate optimized user experience -- and then building those improvements back in on a constant basis?

Alvarez:Exactly. Always.

Listen to the podcast. Find it on iTunes. Get the mobile app. Read a full transcript or download a copy. Sponsor: SAP Ariba.

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          Awesome Procurement —Survey shows how business networks fuel innovation and business transformation        
The next BriefingsDirect digital business insights interview explores the successful habits, practices, and culture that define highly effective procurement organizations.

We'll uncover unique new research that identifies and measures how innovative companies have optimized their practices to overcome the many challenges facing business-to-business (B2B) commerce.

Listen to the podcast. Find it on iTunes. Get the mobile app. Read a full transcript or download a copy.

To learn more about the traits and best practices of the most successful procurement organizations, please join Kay Ree Lee, Director of Business Analytics and Insights at SAP Ariba. The interview was recorded at the recent 2017 SAP Ariba LIVE conference in Las Vegas, and is moderated by Dana Gardner, principal analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: Procurement is more complex than ever, supply chains stretch around the globe, regulation is on the rise, and risk is heightened across many fronts. Despite these, innovative companies have figured out how to overcome their challenges, and you have uncovered some of their secrets through your Annual Benchmarking Survey. Tell us about your research and your findings.

Lee: Every year we conduct a large benchmark program benefiting our customers that combines a traditional survey with data from the procurement applications, as well as business network.

Lee
This past year, more than 200 customers participated, covering more than $400 billion in spend. We analyzed the quantitative and qualitative responses of the survey and identified the intersection between those responses for top performers compared to average performers. This has allowed us to draw correlations between what top performers did well and the practices that drove those achievements.

Gardner: What’s changed from the past, what are you seeing as long-term trends?

Lee: There are three things that are quite different from when we last talked about this a year ago.

The number one trend that we see is that digital procurement is gaining momentum quickly. A lot of organizations are now offering self-service tools to their internal stakeholders. These self-service tools enable the user to evaluate and compare item specifications and purchase items in an electronic marketplace, which allows them to operate 24x7, around-the-clock. They are also utilizing digital networks to reach and collaborate with others on a larger scale.
We see compliance management as a way for organizations to deliver savings to the bottom line.

The second trend that we see is that while risk management is generally acknowledged as important and critical, for the average company, a large proportion of their spend is not managed. Our benchmark data indicates that an average company manages 68% of their spend. This leaves 32% of spend that is unmanaged. If this spend is not managed, the average company is also probably not managing their risk. So, what happens when something unexpected occurs to that non-managed spend?

The third trend that we see is related to compliance management. We see compliance management as a way for organizations to deliver savings to the bottom line. Capturing savings through sourcing and negotiation is a good start,  but at the end of the day, eliminating loopholes through a focus on implementation and compliance management is how organizations deliver and realize negotiated savings.

Gardner:You have uncovered some essential secrets -- or the secret sauce -- behind procurement success in a digital economy. Please describe those.

Five elements driving procurement processes

Lee: From the data, we identified five key takeaways. First, we see that procurement organizations continue to expand their sphere of influence to greater depth and quality within their organizations. This is important because it shows that the procurement organization and the work that procurement professionals are involved in matters and is appreciated within the organization.

The second takeaway is that – while cost reduction savings is near and dear to the heart of most procurement professionals -- leading organizations are focused on capturing value beyond basic cost reduction. They are focused on capturing value in other areas and tracking that value better.

The third takeaway is that digital procurement is firing on all cylinders and is front and center in people's minds. This was reflected in the transactional data that we extracted.

The fourth takeaway is related to risk management. This is a key focus area that we see instead of just news tracking related to your suppliers.

The fifth takeaway is -- compliance management and closing the purchasing loopholes is what will help procurement deliver bottom-line savings.

Gardner: What next are some of the best practices that are driving procurement organizations to have a strategic impact at their companies, culturally?

Lee: To have a strategic impact in the business, procurement needs to be proactive in engaging the business. They should have a mentality of helping the business solve business problems as opposed to asking stakeholders to follow a prescribed procurement process. Playing a strategic role is a key practice that drives impact.
Another practice that drives strategic impact is the ability to utilize and adopt technology to your advantage through the use of digital networks.

They should also focus on broadening the value proposition of procurement. We see leading organizations placing emphasis on contributing to revenue growth, or increasing their involvement in product development, or co-innovation that contributes to a more efficient and effective process.

Another practice that drives strategic impact is the ability to utilize and adopt technology to your advantage through the use of digital networks, system controls to direct compliance, automation through workflow, et cetera.

These are examples of practices and focus areas that are becoming more important to organizations.

Using technology to track technology usage

Gardner: In many cases, we see the use of technology having a virtuous adoption cycle in procurement. So the more technology used, the better they become at it, and the more technology can be exploited, and so on. Where are we seeing that? How are leading organizations becoming highly technical to gain an advantage?

Lee:Companies that adopt new technology capabilities are able to elevate their performance and differentiate themselves through their capabilities. This is also just a start. Procurement organizations are pivoting towards advanced and futuristic concepts, and leaving behind the single-minded focus on cost reduction and cost efficiency.

Digital procurement utilizing electronic marketplaces, virtual catalogs, gaining visibility into the lifecycle of purchase transactions, predictive risk management, and utilizing large volumes of data to improve decision-making – these are key capabilities that benefit the bold and the future-minded. This enables the transformation of procurement, and forms new roles and requirements for the future procurement organization.

Gardner: We are also seeing more analytics become available as we have more data-driven and digital processes. Is there any indication from your research that procurement people are adopting data-scientist-ways of thinking? How are they using analysis more now that the data and analysis are available through the technology?
If you extract all of that data, cleanse it, mine it, and make sense out of it, you can then make informed business decisions and create valuable insights.

Lee: You are right. The users of procurement data want insights. We are working with a couple of organizations on co-innovation projects. These organizations   actively research, analyze, and use their data to answer questions such as:

  • How does an organization validate that the prices they are paying are competitive in the marketplace?
  • After an organization conducts a sourcing event and implements the categories, how do they actually validate that the price paid is what was negotiated?
  • How do we categorize spend accurately, particularly if a majority of spend is services spend where the descriptions are non-standard?
  • Are we using the right contracts with the right pricing?

As you can imagine, when people enter transactions in a system, not all of it is contract-based or catalog-based. There is still a lot of free-form text. But if you extract all of that data, cleanse it, mine it, and make sense out of it, you can then make informed business decisions and create valuable insights. This goes back to the managing compliance practice we talked about earlier.

They are also looking to answer questions like, how do we scale supplier risk management to manage all of our suppliers systematically, as opposed to just managing the top-tier suppliers?

These two organizations are taking data analysis further in terms of creating advantages that begin to imbue excellence into modern procurement and across all of their operations.

Gardner: Kay Ree, now that you have been tracking this Benchmark Survey for a few years, and looking at this year's results, what would you recommend that people do based on your findings?

Future focus: Cost-reduction savings and beyond

Lee: There are several recommendations that we have. One is that procurement should continue to expand their span of influence across the organization. There are different ways to do this but it starts with an understanding of the stakeholder requirements.

The second is about capturing value beyond cost-reduction savings. From a savings perspective, the recommendation we have is to continue to track sourcing savings -- because cost-reduction savings are important. But there are other measures of value to track beyond cost savings. That includes things like contribution to revenue, involvement in product development, et cetera.

The third recommendation relates to adopting digital procurement by embracing technology. For example, SAP Ariba has recently introduced some innovations. I think the user really has an advantage in terms of going out there, evaluating what is out there, trying it out, and then seeing what works for them and their organization.

As organizations expand their footprint globally, the fourth recommendation focuses on transaction efficiency. The way procurement can support organizations operating globally is by offering self-service technology so that they can do more with less. With self-service technology, no one in procurement needs to be there to help a user buy. The user goes on the procurement system and creates transactions while their counterparts in other parts of the world may be offline.
If you can measure risk for your suppliers, why not make it systematic? 

The fifth recommendation is related to risk management. A lot of organizations when they say, “risk management,” they are really only tracking news related to their suppliers. But risk management includes things like predictive analytics, predictive risk measures beyond your strategic suppliers, looking deeper into supply chains, and across all your vendors. If you can measure risk for your suppliers, why not make it systematic? We now have the ability to manage a larger volume of suppliers, to in fact manage all of them. The ones that bubble to the top, the ones that are the most risky, those are the ones that you create contingency plans for. That helps organizations really prepare to respond to disruptions in their business.

The last recommendation is around compliance management, which includes internal and external compliance. So, internal adherence to procurement policies and procedures, and then also external following of governmental regulations. This helps the organization close all the loopholes and ensure that sourcing savings get to the bottom line.

Be a leader, not a laggard

Gardner: When we examine and benchmark companies through this data, we identify leaders, and perhaps laggards -- and there is a delta between them. In trying to encourage laggards to transform -- to be more digital, to take upon themselves these recommendations that you have -- how can we entice them? What do you get when you are a leader? What defines the business value that you can deliver when you are taking advantage of these technologies, following these best practices?

Lee: Leading organizations see higher cost reduction savings, process efficiency savings and better collaboration internally and externally. These benefits should speak for themselves and entice both the average and the laggards to strive for improvements and transformation.

From a numbers perspective, top performers achieve 9.7% savings as a percent of sourced spend. This translates to approximately $20M higher savings per $B in spend compared to the average organization.

We talked about compliance management earlier. A 5% increase in compliance increases realized savings of $4.4M per $1B in spend. These are real hard dollar savings that top performers are able to achieve.
As a top performer, if you go out and recruit, it is easier to entice talent to the organization.

In addition, top performers are able to attract a talent pool that will help the procurement organization perform even better. If you look at some of the procurement research, industry analysts and leaders are predicting that there may be a talent shortage in procurement. But, as a top performer, if you go out and recruit, it is easier to entice talent to the organization. People want to do cool things and they want to use new technology in their roles.

Gardner: Wrapping up, we are seeing some new and compellingtechnologies here at Ariba LIVE 2017 -- more use of artificial intelligence(AI), increased use of bringing predictive tools into a context so that they can be of value to procurement during the life-cycle of a process.

As we think about the future, and more of these technologies become available, what is it that companies should be doing now to put themselves in the best position to take advantage of all of that?

Curious org

Lee: It's important to be curious about the technology available in the market and perhaps structure the organization in such a way that there is a team of people on the procurement team who are continuously evaluating the different procurement technologies from different vendors out there. Then they can make decisions on what best fits their organization.

Having people who can look ahead, evaluate, and then talk about the requirements, then understand the architecture, and evaluate what's out there and what would make sense for them in the future. This is a complex role. He or she has to understand the current architecture of the business, the requirements from the stakeholders, and then evaluate what technology is available. They must then determine if it will assist the organization in the future, and if adopting these solutions provides a return on investment and ongoing payback.

So I think being curious, understanding the business really well, and then wearing a technology hat to understand what's out there are key. You can then be helpful to the organization and envision how adopting these newer technologies will play out.

Listen to the podcast. Find it on iTunes. Get the mobile app. Read a full transcript or download a copy. Sponsor: SAP Ariba.

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          Experts define new ways to manage supply chain risk in a digital economy        
The next BriefingsDirect digital business thought leadership panel discussion explores new ways that companies can gain improved visibility, analytics, and predictive responses to better manage supply chain risk in the digital economy.

The panel examines how companies such as Nielsen are using cognitive computing search engines, and even machine learning and artificial intelligence (AI), to reduce risk in their overall buying and acquisitions.

Listen to the podcast. Find it on iTunes. Get the mobile app. Read a full transcript or download a copy.

To learn more about the exploding sophistication around gaining insights into advanced business commerce, we welcome James Edward Johnson, Director of Supply Chain Risk Management and Analysis at Nielsen; Dan Adamson, Founder and CEO of OutsideIQ in Toronto, and Padmini Ranganathan, Vice President of Products and Innovation at SAP Ariba.

The panel was assembled and recorded at the recent 2017 SAP Ariba LIVE conference in Las Vegas. The discussion is moderated by Dana Gardner, principal analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: Padmini, we heard at SAP Ariba LIVE that risk is opportunity. That stuck with me. Are the technologies really now sufficient that we can fully examine risks to such a degree that we can turn that into a significant business competitive advantage? That is to say, those who take on risk seriously, can they really have a big jump over their competitors?

Ranganathan
Ranganathan:I come from Silicon Valley, so we have to take risks for startups to grow into big businesses, and we have seen a lot of successful entrepreneurs do that. Clearly, taking risks drives bigger opportunity.

But in this world of supplier and supply chain risk management, it’s even more important and imperative that the buyer and supplier relationships are risk-aware and risk-free. The more transparent that relationship becomes, the more opportunity for driving more business between those relationships.

That context of growing business -- as well as growing the trust and the transparent relationships -- in a supply chain is better managed by understanding the supplier base. Understanding the risks in the supplier base, and then converting them into opportunities, allows mitigating and solving problems jointly. By collaborating together, they form partnerships.

Gardner: Dan, it seems that what was once acceptable risk can now be significantly reduced. How do people in procurement and supply chain management know what acceptable risk is -- or maybe they shouldn’t accept any risk?

Adamson
Adamson:My roots are also from Silicon Valley, and I think you are absolutely right that at times you should be taking risks -- but not unnecessarily. What the procurement side has struggled with -- and this is from me jumping into financial institutions where they treat risk very differently through to procurement – is risk versus the price-point to avoid that risk. That’s traditionally been the big problem.

For every vendor that you on-board, you have to pay $1,000 for a due diligence report and it's really not price-effective. But, being able to maintain and monitor that vendor on a regular basis at acceptable cost – then there's a real risk-versus-reward benefit in there.

What we are helping to drive are a new set of technology solutions that enable a deeper level of due diligence through technology, through cognitive computing, that wasn't previously possible at the price point that makes it cost-effective. Now it is possible to clamp down and avoid risk where necessary.

Gardner: James, as a consumer of some of these technologies, do you really feel that there has been a significant change in that value equation, that for less money output you are getting a lot less risk?

Knowing what you're up against  

Johnson: To some degree that value was always there; it was just difficult to help people see that value. Obviously tools like this will help us see that value more readily.

It used to be that in order to show the value, you actually had to do a lot of work, and it was challenging. What we are talking about here is that we can begin to boil the ocean. You can test these products, and you can do a lot of work just looking at test results.

Johnson
And, it's a lot easier to see the value because you will unearth things that you couldn't have seen in the past.

Whereas it used to take a full-blown implementation to begin to grasp those risks, you can now just test your data and see what you find. Most people, once they have their eyes wide open, will be at least a little more fearful.  But, at the same time -- and this goes back to the opportunity question you asked -- they will see the opportunity to actually tackle these risks. It’s not like those risks didn't exist in the past, but now they know they are there -- and they can decide to do something about it, or not.

Gardner:So rather than avoid the entire process, now you can go at the process but with more granular tools to assess your risks and then manage them properly?

Johnson:That's right. I wouldn't say that we should have a risk-free environment; that would cost more money than we’re willing to pay. That said, we should be more conscious of what we're not yet willing to pay for.

Rather than just leaving the risk out there and avoiding business where you can’t access information about what you don't know -- now you'll know something. It's your choice to decide whether or not you want to go down the route of eliminating that risk, of living with that risk, or maybe something in between. That's where the sweet spot is. There are probably a lot of intermediate actions that people would be taking now that are very cheap, but they haven't even thought to do so, because they haven’t assessed where the risk is.

Gardner: Padmini, because we're looking at a complex landscape -- a supply chain, a global supply chain, with many tiers -- when we have a risk solution, it seems that it's a team sport. It requires an ecosystem approach. What has SAP Ariba done, and what is the news at SAP Ariba LIVE? Why is it important to be a team player when it comes to a fuller risk reduction opportunity?

Teamwork

Ranganathan:You said it right. The risk domain world is large, and it is specialized. The language that the compliance people use in the risk world is somewhat similar to the language that the lawyers use, but very different from the language that the information technology (IT) security and information security risk teams use.

The reason you can’t see many of the risks is partly because the data, the information, and the fragmentation have been too broad, too wide. It’s also because the type of risks, and the people who deal with these risks, are also scattered across the organization.
It’s not like those risks didn't exist in the past, but now they know they are there -- and they can decide to do something about it, or not.

So a platform that supports bringing all of this together is number one. Second, the platform must support the end-to-end process of managing those supply chain relationships, and managing the full supply chain and gain the transparency across it. That’s where SAP Ariba has headed with Direct Materials Sourcing and with getting more into supply chain collaboration. That’s what you heard at SAP Ariba LIVE.

We all understand that supply chain much better when we are in SAP Ariba, and then you have this ecosystem of partners and providers. You have the technology with SAP and HANA to gain the ability to mash up big data and set it in context, and to understand the patterns. We also have the open ecosystem and the open source platform to allow us to take that even wider. And last but not the least, there is the business network.

So it’s not just between one company and another company, it's a network of companies operating together. The momentum of that collaboration allows users to say, “Okay, I am going to push for finding ethical companies to do business with,” -- and then that's really where the power of the network multiplies.

Gardner: Dan, when a company nowadays buys something in a global supply chain, they are not just buying a product -- they are buying everything that's gone on with that product, such as the legacy of that product, from cradle to PO. What is it that OutsideIQ brings to the table that helps them get a better handle on what that legacy really is?

Dig deep, reduce risk, save time

Adamson: Yes, and they are not just buying from that seller, they are buying from the seller that sold it to that seller, and so they are buying a lot of history there -- and there is a lot of potential risk behind the scenes.

That’s why this previously has been a manual process, because there has been a lot of contextual work in pulling out those needles from the haystack. It required a human level of digging into context to get to those needles.

The exciting thing that we bring is a cognitive computing platform that’s trainable -- and it's been trained by FinCrime’s experts and corporate compliance experts. Increasingly, supply management experts help us know what to look for. The platform has the capability to learn about its subject, so it can go deeper. It can actually pivot on where it's searching. If it finds a presence in Afghanistan, for example, well then that's a potential risk in itself, but it can then go dig deeper on that.

And that level of deeper digging is something that a human really had to do before. This is the exciting revolution that's occurring. Now we can bring back that data, it can be unstructured, it can be structured, yet we can piece it together and provide some structure that is then returned to SAP Ariba.

The great thing about the supply management risk platform or toolkit that's being launched at SAP Ariba LIVE is that there’s another level of context on top of that. Ariba understands the relationship between the supplier and the buyer, and that's an important context to apply as well.

How you determine risk scores on top of all of that is very critical. You need to weed out all of the noise, otherwise it would be a huge data science exercise and everyone would be spinning his or her wheels.
SAP Ariba understands the relationship between the supplier and the buyer, and that's an important context to apply.

This is now a huge opportunity for clients like James to truly get some low-hanging fruit value, where previously it would have been literally a witch-hunt or a huge mining expedition. We are now able to achieve this higher level of value.

Gardner: James, Dan just described what others are calling investigative cognitive computing brought to bear on this supply chain risk problem. As someone who is in the business of trying to get the best tools for their organization, where do you come down on this? How important is this to you?

Johnson: It's very important. I have done the kinds of investigations that he is talking about. For example, if I am looking at a vendor in a high-risk country, particularly a small vendor that doesn't have an international presence  that is problematic for most supplier investigations. What do I do? I will go and do some of the investigation that Dan is talking about.

Now I'm usually sitting at my desk in Chicago. I'm not going out in the world. So there is a heightened level of due-diligence that I suspect neither of us are really talking about here. With that limitation, you want to look up not only the people, you want to look up all their connections. You might have had a due-diligence form completed, but that's an interested party giving you information, what do you do with it?

Well, I can run the risk search on more than just the entity that I'm transacting with.  I am going to run it on everyone that Dan mentioned. Then I am going to look up all their LinkedIn profiles, see who they are connected to. Do any of those people show any red flags? I’d look at the bank that they use. Are there any red flags with their bank?

I can do all that work, and I can spend several hours doing all that work. As a lawyer I might dig a little deeper than someone else, but in the end, it's human labor going into the effort.

Gardner: And that really doesn't scale very well.

Johnson: That does not scale at all. I am not going to hire a team of lawyers for every supplier. The reality here is that now I can do some level of that time-consuming work with every supplier by using the kind of technology that Dan is talking about.

The promise of OutsideIQ technology is incredible. It is an early and quickly expanding, opportunity. It's because of relationships like the one between SAP Ariba and OutsideIQ that I see a huge opportunity between Nielsen and SAP Ariba. We are both on the same roadmap.

Nielsen has a lot of work to do, SAP Ariba has a lot of work to do, and that work will never end, and that’s okay. We just need to be comfortable with it, and work together to build a better world.

Gardner: Tell us about Nielsen. Then secondarily, what part of your procurement, your supply chain, do you think this will impact best first?

Automatic, systematic risk management

Johnson: Nielsen is a market research company. We answer two questions: what do people watch? And what do people buy? It sounds very simple, but when you cover 90% of the world’s population, which we do – more than six billion people -- you can imagine that it gets a little bit more complicated.

We house about 54 petabytes of database data. So the scale there is huge. We have 43,000 employees. It’s not a small company. You might know Nielsen for the set-top boxes in the US that tell what the ratings were overnight for the Super Bowl, for example, but it’s a lot more than that. And you can imagine, especially when you're trying to answer what do people buy in  developing countries with emerging economies? You are touching some riskier things.

In terms of what this SAP Ariba collaboration can solve for us, the first quick hit is that we will no longer have to leverage multiple separate sources of information. I can now leverage all the sources of information at one time through one interface. It is already being used to deliver information to people who are involved in the procurement chain. That's the huge quick win.

The secondary win is from the efficiency that we get in doing that first layer of risk management. Now we can start to address that middle tier that I mentioned. We can respond to certain kinds of risk that, today, we are doing ad-hoc, but not systematically. There is that systematic change that will allow us to not only target the 100 to 200 vendors that we might prioritize -- but the thousands of vendors that are somewhere in our system, too.

That's going to revolutionize things, especially once you fold in the environmental, social and governance (ESG) work that, today, is very focused for us. If I can spread that out to the whole supply chain, that's revolutionary. There are a lot of low-cost things that you can do if you just have the information.
What is the good in the world that’s freely available to me, that I'm not even touching? That's amazing.

So it’s not always a question of, “am I going to do good in the world and how much is it going to cost me?” It’s really a question of, “What is the good in the world that’s freely available to me, that I'm not even touching?” That's amazing! And, that's the kind of thing that you can go to work for, and be happy about your work, and not just do what you need to do to get a paycheck.

Gardner: It’s not just avoiding the bad things; it’s the false positives that you want to remove so that you can get the full benefit of a diverse, rich supplier network to choose from.

Johnson: Right, and today we are essentially wasting a lot of time on suspected positives that turn out to be false. We waste time on them because we go deeper with a human than we need to. Let’s let the machines go as deep as they can, and then let the humans come in to take over where we make a difference.

Gardner: Padmini, it’s interesting to me that he is now talking about making this methodological approach standardized, part of due-diligence that's not ad-hoc, it’s not exception management. As companies make this a standard part of their supply chain evaluations, how can we make this even richer and easier to use?

Ranganathan: The first step was the data. It’s the plumbing; we have to get that right. It’s about the way you look at your master data, which is suppliers; the way you look at what you are buying, which is categories of spend; and where you are buying from, which is all the regions. So you already have the metrics segmentation of that master data, and everything else that you can do with SAP Ariba.

The next step is then the process, because it’s really not a one-size-fits-all. It cannot be a one-size-fits-all, where every supplier that you on-board you are going to ask them the same set of questions, check the box and move on.

I am going to use the print service vendor example again, which is my favorite. For marketing materials printing, you have a certain level of risk, and that's all you need to look at. But you still want, of course, to look at them for any adverse media incidents, or whether they suddenly got on a watch-list for something, you do want to know that.

But when one of your business units begins to use them for customer-confidential data and statement printing -- the level of risk shoots up. So the intensity of risk assessments and the risk audits and things that you would do with that vendor for that level of risk then has to be engineered and geared to that type of risk.

So it cannot be a one-size-fits-all; it has to go past the standard. So the standardization is not in the process; the standardization is in the way you look at risk so that you can determine how much of the process do I need to apply and I can stay in tune.

Gardner: Dan, clearly SAP Ariba and Nielsen, they want the “dials,” they want to be able to tune this in. What’s coming next, what should we expect in terms of what you can bring to the table, and other partners like yourselves, in bringing the rich, customizable inference and understanding benefits that these other organizations want?

Constructing cognitive computing by layer

Adamson: We are definitely in early days on the one hand. But on the other hand, we have seen historically many AI failures, where we fail to commercialize AI technologies. This time it's a little different, because of the big data movement, because of the well-known use cases in machine learning that have been very successful, the pattern matching and recommending and classifying. We are using that as a backbone to build layers of cognitive computing on top of that.

And I think as Padmini said, we are providing a first layer, where it’s getting stronger and stronger. We can weed out up to 95% of the false-positives to start from, and really let the humans look at the thorny or potentially thorny issues that are left over. That’s a huge return on investment (ROI) and a timesaver by itself.

But on top of that, you can add in another layer of cognitive computing, and that might be at the workflow layer that recognizes that data and says, “Jeez, just a second here, there's a confidentiality potential issue here, let's treat this vendor differently and let's go as far as plugging in a special clause into the contract.” This is, I think, where SAP Ariba is going with that. It’s building a layer of cognitive computing on top of another layer of cognitive computing.

Actually, human processes work like that, too. There is a lot of fundamental pattern recognition at the basis of our cognitive thought, and on top of that we layer on top logic. So it’s a fun time to be in this field, executing one layer at a time, and it's an exciting approach.

Listen to the podcast. Find it on iTunes. Get the mobile app. Read a full transcript or download a copy. Sponsor: SAP Ariba.

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          How SAP Ariba became a first-mover as Blockchain comes to B2B procurement         
The next BriefingsDirect digital business thought leadership panel discussion examines the major opportunity from bringing Blockchain technology to business-to-business (B2B) procurement and supply chain management.

We will now explore how Blockchain’s unique capabilities can provide comprehensive visibility across global supply chains and drive simpler verification of authenticity, security, and ultimately control.

Listen to the podcast. Find it on iTunes. Get the mobile app. Read a full transcript or download a copy.

To learn more about how Blockchain is poised to impact and improve supply chain risk and management, we're joined by Joe Fox, Senior Vice President for Business Development and Strategy at SAP Ariba, and Leanne Kemp, Founder and CEO of Everledger, based in London.

The panel was assembled and recorded at the recent 2017 SAP Ariba LIVE conference in Las Vegas. The discussion is moderated by Dana Gardner, principal analyst at Interarbor Solutions.

Here are some excerpts:

Gardner: Joe, Blockchain has emerged as a network methodology, running crypto currency Bitcoin, as most people are aware of it. It's a digitally shared record of transactions maintained by a net