Thank you for reading our June 2018 newsletter.
Another June, another fiscal year-end for Microsoft. I look forward to seeing Microsoft’s financial results. Not because I am a shareholder (I’m not), which I regret given the fact that Microsoft surpassed Alphabet’s market capitalization on May 29th this year.
I trust that the financial figures related to Azure cloud services will look great, although Microsoft will probably not reach their internal targets for Dynamics 365. I do believe the increase will be significant and probably above market average which will result in a larger market share of implemented business applications. If you set your targets unrealistically high it may look bad (internal) but look good (external), at the same time as you beat your competitor’s growth. Read this interesting article on Forbes.com to find out more why Microsoft will hit the $1T market cap 3 years before Alphabet will.
Coincidence or not I came across the quote of the day on Forbes.com when reading the article. The quote read: “The greater danger for most of us lies not in setting our aim too high and falling short, but in setting our aim too low and achieving our mark”. I doubt whether POTUS would subscribe to that quote from the great Michelangelo.
It was funny to see the size of the envelope Trump received from Kim Jung Un by the way. Sometimes I do get complaints that my blogs are too long, but apparently Kim writes extremely long letters that they require this size of envelopes. Social media immediately busted on the size of the envelop but I’m sure it contains very interesting information which was transferred in an old-fashioned secure way: the letter.
On May 25th the General Data Protection Regulation (European Regulation 2016/679) came into effect. I’m not sure what your personal thoughts are about the regulation but instead of expecting to receive less emails, I only received more! I wonder how Trump was informed about these privacy updates. Could it be that he also received them in old-fashioned and oversized envelopes?
As you may know, the IT sector is often filed with buzzwords such as Internet of Things, Digital Transformation, Blockchain, to name a few. Blockchain is a continuously growing list of records, called blocks, that are linked and secured using cryptography. I will save you any further technical details on blockchain, but there’s a certain paradox between blockchain and GDPR. The immutable nature of blockchain networks could break Europe’s new GDPR rules. In some ways GDPR has an opposite effect when it comes to making blockchain architecture GDPR compliant. But when implemented properly, a distributed ledger technology could be part of a solution for compliance. If you want to find our more, I encourage you to read this article on Computerworld.
Dynamics Software sponsored the 2018 European Rental Association Convention, held in May in Vienna. This is one of the few events C-level management attends. During the event there was a special interest workshop on Digital Transformation. The workshop discussed the future of rental and the effects of Digital Transformation such as payment models, the viability of physical stores, Augmented Reality, Artificial Intelligence and Big Data. One of the conclusions on going digital in rental is that it can only work if there is availability and accessibility of equipment, and trust.
The closing keynote was given by Austrian born Oxford professor Viktor-Mayer Schönberger . He is the co-author of “Big Data: A Revolution That Will Transform How We Live, Work, and Think” (2013) and “Delete: The Virtue of Forgetting in the Digital Age” (2009!). Those subjects are an important part of the GDPR. His most recent book is called “The Data Economy”. In his very interesting presentation he talked about data and decision making, and as you may recall from my previous blogs, these are one of my favorite topics.
A nice example about insights in data in his presentation was that for years marketers would fret over the question: Which is America’s favorite pie? Everybody knows the most popular pie in the US is apple pie. Right? Why? It was because supermarkets stated that the 12-inch apple pie had the highest sales. But a couple of years ago somebody did research and when asking people what their favorite pie was, it appeared that nobody really liked apple pie. Most Americans would name cherry pie, apricot pie or any other kind of pie as their favorite. Hardly anybody would answer apple pie.
It so happens that when families discuss which kind of pie to buy, apple pie is often chosen as some sort of compromise. When negotiating, apple pie turns out to give the least problems because nobody really dislikes apple pie. For want of any other option, Americans were forced to buy large apple pies.
As a matter of fact, a 12-inch apple pie is really big. Big enough to feed an entire family. The researcher noted that perhaps we were asking the wrong question. Instead of asking what your favorite pie is, we should ask what the right size of apple pie is for supermarkets to store. Analytics revealed that the ideal size of a pie should be about 5 inches, so that people who liked apple pie could buy it per requirement, and not be compelled to buy in excess. Once this issue was addressed and pies were baked accordingly, apple pie sales shot up. Prices came down too, as economies of scale kicked in. A great example of big data helping us to ask the right questions.
You can watch a 2015 presentation of Viktor here:
In his presentation Victor also gave the example of Duolingo, a phone app used to learn new languages. Data patterns revealed that the Spanish were not able to learn English in the way it was offered through this app. They got down to fixing the problem, and today Duolingo has a special app for the Spanish to learn English. A customized solution to a unique problem.
Walmart stores in America always see a spike in the sale of strawberry pop tarts, whenever there is a hurricane warning. Why does this happen? Is it because the sugary content is comforting at times of extreme stress? The data does not tell us why. And it is not very interesting for Walmart as well. All they need to do is make sure that pop tarts are available and easy to pick up when a hurricane is arriving. We don’t always need to know why and establish a causal effect relationship.
To avert impending death on premature babies a certain experiment was carried out in Canada. Besides providing emergency medical support, the aim was to see if Big Data could be used to save lives. Digital sensors were primed into action, which showed up to 1200 data points per baby per second. In the process an interesting pattern emerged. 24 hours before the onset of a major infection, the vital signs of the babies would stabilize. Almost like a lull before the storm. The doctors did not know why, but it was enough for them to tease out the value from this data to save lives. It acted as warning 24 hours in advance.
Databases and data can be hard to see trough. On what do you focus, and what do you see, or do you hear? This is being nicely illustrated in the recent Laurel or Yanny viral that is scientifically explained in this video:
Created by Anthony Norcia, the illusion won the ‘Illusion of the Year’ contest in 2006. The image called the ‘Coffer Illusion’ shows a pattern of rectangles, but something is hidden is plain sight. The Coffer Illusion may initially appear as a series of sunken rectangular pattern, but after a few seconds, your brain’s representation of the image may ‘flip’ to give you the experience of 16 circles in the background. Some people are unable to see it.
The normal way of looking at data is: question -> data -> answer. But are we asking the right questions? Viktor is convinced that the more data is available, the more questions you can ask. This will in the end lead to innovation and he gave the self-driving car and Amazon (revenue growing 30% after introduction of recommendations) as examples.
Because google collected 1000000000 data per second compared to traditional car producers, they are better capable in driving the self-driving car innovation. Less is more and more is better, but relative to what you are looking for.
In Germany Lufthansa flight data are now used to do better weather forecasts and Inrix used to better predict traffic jams. Inrix is a leading traffic intelligence provider. Its services are widely used by commuters to avail the best routes and avoid traffic jams. Obviously Inrix has a repository of gargantuan sized data sets. Some part of that data was used to draw out a correlation between traffic movement around shopping malls, and the revenue that was generated from these malls. Predictive Analytics came into play to predict future sales as well. A classic case of how data is being reused to generate value for an altogether different business line. Car sharing could be a solution to reduce traffic jams, but the problem is that 70% of the drivers think they drive better than other drivers. It is why people also are afraid of flying. They like to be in control which flying, and carpooling do not allow. Similarly, with Big Data, privacy and decision making, in the end, comes to trust and therefore trust is the currency of Big Data sustainability. How will your customers get value out of data?
But why should we hand over our data to others when we receive nothing in return? Car manufacturers, banks and software providers should consider this when attempting to collect data. The recent Facebook consumer privacy scandal with Cambridge Analytica has focused attention on the importance of trust. Why should we trust Facebook or other technology providers to follow through on privacy promises when they have demonstrated that they are willing to flaunt their internal policies and government oversight when the need suits them? Trust is about humility and humanity.
As Rep. Michael Doyle, a Democrat from Pennsylvania asked Mark Zuckerberg; “Today, we are at a reflection point in the debate over (consumer) data privacy and regulation which has impact on brands and technology companies that provide the tools”. It is about the terms of trust and consumers are prepared to share information about themselves in return for something which make it better for them (products and/or services). But like with the planes and the carpool they will only do that if they can control and understand what’s happening with their data. Trust is everything. The next leading brands will be the most trusted brands.
This summer I will be attending Microsoft’s Inspire in Las Vegas followed by a holiday in the Western part of US with my family. I am looking forward to apple pie, not strawberry pop tarts. And if too hot, like most of the data centers, you can always go take a swim with the Microsoft’s deep sea data center.
What will happen when this data center leaks? In all cases you should always clean your own leaks, like the Dutch prime minister Mark Rutte did when dropping his coffee cup.
Wishing you a hot and Big Data summer with lots of coffee!
On behalf of Dynamics Software