Edwin Yapp - My Fave 5 of 2017
By Edwin Yapp January 25, 2018
- Cloud stalwarts aiming to outgun each other in artificial intelligence, machine learning
- BlackBerry turnaround not complete yet; banks & data analytics not quite there yet
AS THE year begins, there is no shortage of interesting stories I’ve covered over the course of the last 365 days. For 2017, I’ve been privileged as many of these stories focused on global trends and comprised interviews with top global executives.
So here is favourite five for 2017, arranged topically rather than chronologically.
My first favourite comes courtesy of my interview with John Chen, chief executive officer (CEO) of BlackBerry Ltd, a noted corporate turnaround specialist.
Now the story of the fall from grace for Research in Motion (RIM) Ltd – the owner of the BlackBerry brand, and which has since been renamed BlackBerry Ltd – has been widely reported on. Try reading this in-depth, 6,300-word article by the Canada’s Globe and Mail if you’re behind.
The story reads like a movie-plot and includes how the company’s complicated corporate structure of having two co-chief executives led to strategic decisions being delayed; a failure to respond to the rising tide of competition, namely Apple and Google; and missteps in choosing compatible engineering platforms (both hardware and software).
After three-and-a-half years of being at the helm of BlackBerry, 63-year-old British-born Chen (pic, below) seemed to have made good his promises to turn the company around. All signs as of the time of my interview with Chen indicated that the company was on a rebound.
“When I first showed up [at BlackBerry in November 2013], virtually all the analysts had written somewhat detrimental or negative things about us as a company and rightfully so as it’s their job to do that,” Chen had said.
“I appreciate it. But after these [tough times], we’ve really turned things around and at least some [analysts’] perception is that they understand our company.”
But BlackBerry isn’t completely out of the woods yet as even Chen candidly conceded in my Q&A interview with him that more needs to be done to push the company forward.
Analyst Neil Shah of Counterpoint Research believes that BlackBerry has somewhat turned the corner but warns that it has to do more than rely on this as it needs to grow beyond just doing that, noting that BlackBerry is now just a US$1 billion business per year and it remains to be seen how it can scale up from this point.
Will Chen complete BlackBerry’s turnaround? Perhaps its latest coup in the automotive space is a good indicator of more to come. But only time will tell.
Next up is a twin story and comes courtesy of Google Inc, and they relate to the progress the search giant has made in about 18 months, after it declared itself a “dead serious” enterprise cloud provider.
For the past two years I’ve had the privilege of covering its first and second annual global cloud conference dubbed Google Cloud Next in San Francisco. The second iteration of the event was held last March and was followed by its first leg of cloud conferences in Singapore, as part of Google Cloud’s multi-city stopover in six cities in the fourth quarter of last year.
Now everybody knows of Google as the undisputed king of search but the company has been lagging in offering cloud services to large companies at scale the way worldwide leader Amazon Web Services (AWS) Inc has been doing for the past decade.
But Google is a company in a hurry. And given its technical chops, financial muscle and single mindedness in goal setting, you can’t bet against it gaining ground once it has set its mind on going big on the cloud.
In March, about a year after it hired enterprise leader Diane Greene to helm its cloud division, the company showcased an increasing number of large customers – HSBC, Verizon, Colgate Palmolive, eBay – it has converted on to its Google Cloud Platform (GCP). Other companies also did so, citing the advantages that Google had over its competitors.
Later in Singapore, it was again in a hurry to tout new companies – this time all based in Southeast Asia – adopting not only its cloud services but also some of its AI services.
Analysts have no doubt that AWS is head and shoulders ahead insofar as cloud infrastructure-as-a-service (IaaS) is concerned. After all, AWS has been in the business for over 10 years while Microsoft Corp and Google have been around for much less.
But if anybody can catch AWS, few would bet against Google doing so. After all, Google’s cloud chief Greene unequivocally declared that it could beat industry leader AWS in about five years from today.
“I think we have a pretty good shot at being No 1 in five years,” she said, telling a Forbes’ CIO Summit. “I actually think we have a huge advantage in our data centres, in our infrastructure, availability, security and how we automate things. We just haven't packaged it up perfectly yet,” she said, but didn’t explain how exactly it would achieve these plans.
Bold words from an ambitious veteran and something you would expect from a top Google executive playing catch up, no doubt. The cloud and AI game is now really afoot.
Google’s cloud ambition dovetailed nicely into my next favourite. Because cloud leader AWS realises that its competition is on its heels, the Seattle-based company, to its credit, hasn’t rested on its laurels but has instead launched a slew of new services to defend itself.
AWS cloud czar Andy Jassy (pic, above) confidently said in his keynote address at its recent re:Invent 2017 conference in Las Vegas that AWS is not only ahead of them but enterprises who demand the best will choose the best.
“When builders build their applications and move them to the cloud, they don’t want to settle for a fraction of functionalities [that is available] from a leader… And there’s nobody that has the functionality close to what AWS has...,” claimed the CEO of AWS.
What makes this story compelling is that competition invariably brings about innovation and AWS is bringing to the fore services that will ultimately benefit end-users, thanks to the competition from Google and Microsoft.
AWS may have a commanding lead in the cloud space but services built on top of just mere IaaS aren’t the only battleground for now, intelligent stuff must now be put on top of it.
So, the battle lines have been drawn clearly as being the leader means that AWS knows everyone else will come after its head.
Microsoft, Google, Alibaba Cloud, IBM Corp and the rest will continue their assault and the analysts believe that the differentiator in this game will be arguably AI, machine learning, advanced analytics all delivered on a superior secure service that is easy and affordable to use.
In the end, many analysts believe, as do I, that it will not be a ‘one-horse’ race as companies will choose the best-of-breed services and use a multi-cloud strategy that suits their own requirements and use cases.
This is why Jassy spent a lot of time on stage at re:Invent 2017 touting this one message, best summarised by Alan Waite, a Gartner analyst I spoke to.
“It’s a defensive move to act against competition whilst attacking at the same time to take more market share,” he argued. “This is why AWS has to get into AI and machine learning and continue innovating and pushing the envelope with its huge array of services.
“Essentially what AWS is saying is: ‘We have what the competition has so you have fewer reasons to choose others.’ The more value they add, the more services they lock their customers in with.
“So, if you’re Google, and if everyone else is on AWS, Google has to provide a more unique tool you can use as an alternative to AWS. This is how innovation will be pushed,” Waite concluded.
No favourite five list of mine would be complete without a telco story. And this is the mother of all in the three years I’ve been writing about the redelineation of wireless spectrum.
For background, check out this story here. A year after this redelineation plan began, this story investigates where we are at. Key to this plan was the move to reallocate a huge chunk of second generation (2G) wireless spectrum.
In industry parlance, spectrum refarming is the vacating of dated wireless technology occupying a particular frequency band so that a new wireless technology can use that frequency band to improve telco services to consumers.
Credit to all the major operators in Malaysia, this project went well, and subscribers have generally benefited from the reallocation plan. 4G services have been rolled out quickly and much of the country is well-covered.
Still there were challenges. An industry insider I spoke with noted that the reduction of all operators’ 2G spectra to 2 X 5MHz will limit their ability to serve their respective subscribers with anything but basic voice communication.
“There’ll be virtually no data capabilities while on 2G and voice will be rudimentary at best. The voice quality at certain low coverage areas would also be choppy and not smooth,” said the insider.
Another dimension to this story is that whilst all operators would want to get their respective subscribers to upgrade to 3G and 4G, not all can, as there is a significant number of 2G users left in the country.
There are several important factors that must happen to make migration of 2G to 4G work. This includes matching the LTE/ 4G coverage with the 2G network to ensure people would not switch back to 2G; boosting the capacity of 3G/ 4G networks to avoid network overload which can lead to quality issues; ensuring the availability of low cost smart devices that match the pricing of basic feature phones to simulate migration at the bottom of the pyramid.
But even if these factors were addressed merely switching off 2G wouldn’t work as there are an estimated 25% to 30% of subscribers still purely on 2G.
One industry insider best said it, “There are political and economic considerations at play,” the executive argued. “Shutting down 2G means that invariably, the lower income group – many of whom live in outlying areas of Malaysia – will be impacted. They would need to upgrade their mobiles to get 3G and LTE services, and many of them can’t afford to do so.
“In Malaysia, the big impact to this class of people isn’t realistic and given the impending Malaysian General Election around the corner, you can’t just kill off 2G service for the conceivable future.”
My last favourite story comes courtesy of my interview with Stephen Brobst, chief technology officer (CTO) of analytics and data software company Teradata Corp. If you’ve met Brobst, you’ll know that he isn’t your typical run-of-the-mill, straight-laced, tie- and jacket-wearing executive.
In my candid interview with him at last year, Brobst unabashedly said that while banks always have customers’ data, they have historically not used it well.
Brobst argued that in the new digital economy, all companies are either already data companies, will become data companies, or will cease to be relevant.
He made a case for how companies such as Philips NV now produce electric toothbrushes that collect information about consumer habits while brushing their teeth so that they can not only create a great product but also provide value to customers with the data it has.
With such technology, Philips has gone beyond being just a hardware maker as it now understands its customers and can build lasting relationships with them to ensure loyalty, something that banks aren’t doing well as they are not doing real-time processing, he argued.
“Take for example an outbound phone call. The incremental cost of a phone call to a particular customer that might buy a product is relatively low. A customer might buy it or he might not but the expected value is very large [as far as the bank is concerned]. So therefore, banks continue using this method.
“The problem is that banks aren’t listening to what customers really want. Their financial model is broken because this old model does not account for the negative sentiments of the call or email, and if banks call or email too often, customers will block you or add you to their spam list.
“So, when a bank has something really useful to say, the customer won’t listen. Banks have not accounted for this cost – the cost of potentially losing the right to talk to you. Banks will have to look at the lost opportunity cost and also the possibility that the customer will churn [leave the bank for another].”
How true this is. And inasmuch as every organisation is trumpeting the digital transformation song they seek to be engaged in, the actual digitisation efforts aren’t as close to reality as we would like to believe.
So how do you fix this?
Brobst suggested, “You have to find a champion within the bank who is willing to break away from how business is done and challenge the existing models. And if a bank is successful in doing that and is able come up with a very different customer experience, don’t do it all at once. It may need to test a market to try its new ideas as Malaysia is a risk-averse market.
“Banks will need to try something on a small scale such as small pilots that show value. Only after that, can they quickly ramp up.”