Build Newsletter: The Present & Future In Our World—Dec 2015

December 15, 2015 Gregory Chase

sfeatured-buildWelcome to the year-end edition of Build Newsletter and our one year anniversary! Last year at this time, we were commenting about the lack of containment for containers.

With the holiday season upon us, we wanted to start things off by wishing all of our readers a happy holiday and passing along some DIY tips for SSHing into your Xmas tree with a Raspberry Pi. Of course, you could also apply this set-up to a menorah, kinara, or make your own New Year’s Eve ball. But if you aren’t a hacker, you can now buy plenty of “mobile managed musical Christmas tree lights” products off the shelf, like this high end one.

Now, let’s take a look at the present news and future outlook—we aren’t diving into bits and bytes at all this time around—we are talking about the world of digital transformation around us and looking at the world through a new lens in 2016.

The Present: Digital Transformation Is A Revolution, Not A Bubble

Just a few days ago, GE CEO Jeff Immelt said we are not in a tech bubble—he believes a bubble view is very short-sided. For example, the app economy alone is worth an estimated $300B. From our view, software investors may be overvaluing some start-ups, but we have to realize that we are only about 20 years into the information age.

On that note, IDC announced their 2016 Digital Transformation Predictions recently, and the number one prediction was that “By the end of 2017, two-thirds of the CEOs of the G2000 will have digital transformation at the center of their corporate strategy.” In their 2016 IT Industry Predictions, they say that enterprises will double software development capabilities by 2018. Lastly, their 2016 Big Data and Analytics Predictions predicts that companies who make data actionable will achieve an extra $430 billion in productivity by 2020. From our view, these predictions are already realities—every company we talk to wants to talk about these things.

Yet, it is a challenge. According to a recent 1100 person poll in the UK by Vodafone, 50% of decision makers in British businesses and public sector organisations are fearful or worried that they will not be able to keep up with digital progress over the next five years—90% say digital technology is essential to business success. This isn’t affecting companies, it is affecting economies—another UK survey says there is a huge technology skills gap, costing their economy billions.

And, it’s not just the UK. The digital priority is also leading to record levels of acquisitions—over 1000 in the 3rd quarter alone—and tremendous cloud industry consolidation around the world.

Look no further than financial services, which impacts every business on earth. Digital transformation is driving significant disruption and innovation. In the last 18 months, Apple Pay, Android Pay, Samsung Pay, and now Walmart Pay have launched. Virtually every bank will be launching their own mobile payment solution in 2016—Capital One and Chase are two of the first. Worldpay’s new research says that mobile payment technology will hit mass appeal in 2016 and will overtake credit card use by 2019. Then, there is bitcoin and blockchain, which has received $1 billion in investments. As yet another signal this industry is being disrupted, for banking’s future leadership, all banks are losing MBA graduates to tech companies.

Open Source: Spinnaker, ODPi, OCI, Software Is Now Free, And $1 Billion For OpenAI

Netflix made a big splash with Google, Microsoft, and Pivotal, releasing the open source project Spinnaker. With it, Netflix can now deploy their apps across AWS, Cloud Foundry (alongside Flo for Spring XD), Google Compute Engine, and Microsoft Azure. Netflix teams worked with both our Cloud Foundry and Spring teams on the project—as our CEO noted in this Wired article, “Over time, this gives them a really great migration strategy, the ability to mix and max clouds.“

Two of 2015’s biggest open source governance projects this year have been the Open Data Platform Initiative (ODPi) and the Open Container Initiative (OCI). We recently published a video by our own Roman Shaposhnik, giving an update on the ODPi. As well, the OCI just formalized the technical governance model. In under a year, the sheer number of amazing companies involved in these two projects is incredible.

Within the EMC federation, Photon Controller was released by VMware, and EMC open sourced RackHD.

If you haven’t noticed, 2015 highlighted a huge shift in the business models of traditional software and hardware companies—software is free. Want proof? In last month’s Build Newsletter, we covered the fact that both Google and Microsoft released artificial intelligence (AI) and distributed machine learning toolkits. To add to it, Google just released a new image recognition engine to open source, and Microsoft released the edge browser Chakra as well as .NET and ASP.NET. IBM’s SystemML is slated as an Apache Incubator project as well as a new JVM toolkit that will work with other languages like Ruby and Python. Facebook is also contributing new server designs, called Big Sur, to the Open Compute project—these are built to power artificial intelligence workloads and run GPUs. The Python community has also released an open source eye-tracking toolkit as well as one for identifying major trends in complex systems. Rounding out all the big player contributions, Apple open sourced Swift at Swift.org.

Most impressively—the OpenAI initiative has just been launched—with $1 billion in backing and leadership from the likes of Elon Musk, Reid Hoffman, Peter Thiel, and others. This group is non-profit AI research company with a goal of benefiting humanity. It is sure to make a huge impact in the world, especially when there is free software to power architectures for real-time, autonomous decision-making.

Connected Cars, Buses, & Trucks—The Hottest Topic Of The Past Month

It seems like retail should be the hottest topic this month, and retailers have had more mobile app usage this year along with the overall growth of the app economy. But, retail doesn’t seem to be the hottest tech topic. Cars are.

First off, this article shares a KPMG analysis showing the growth of connected cars between now and 2030, and it says they will have 100% penetration by 2026. Today, Ford announced a major partnership with Pivotal to help transform them into a software company. As part of Ford Smart Mobility, our partnership is a critical part of their plan to take the company to the next level in connectivity, mobility, autonomous vehicles, the customer experience as well as data and analytics. Pivotal recently announced work with Mercedes-Benz on a similar level. No doubt, this is an arms race and a new era for vehicles. The wars for this market are in progress, with BMW calling out Tesla’s autopilot software—and Musk touted back, “The whole Tesla fleet operates as a network. When one car learns something, they all learn it.” Indeed.

There are still challenges, like with perception. Audi intends to update certain diesel engines with a software update—which is a bit scary and also insanely cool. Then, there are many regulatory and safety hurdles ahead and much debate needed on car data, as pointed out by Chevin, with fleet software managing data for 850,000 vehicles.

Now, to move from cars to buses, trucks, and machines, Switzerland will be running driverless buses in the spring of 2016. As well, driverless trucks and autonomous tractor trailers are in a “when, not if” state. Why? The financial model for self-driving trucks is just better. This article also explains the three types of IoT in manufacturing—supply chains, factories, or products—pointing out the progress in logistics, plants, and mining equipment. And augmented reality is coming too, along with the replacement of factory workers. Perhaps the money and lobbying of corporations will make B2B driving a reality before B2C.

For all you Uber, UPS, and FedEx drivers, your gig is going to change too. Uber just hired another Google Map executive and now says they are actually in the logistics business. It seems that no industry is safe from this disruption phenomenon. Even software developers are in the same disruption boat if Andreesen Horowitz is right. Wonder how long it will be before we’ll be automating venture capitalists too?

The Future: Cloud Software Is The Engine And Data Is The Gas

While new research says that 58% of $1+ billion companies have already introduced some form of hybrid cloud, and all of the apps mentioned above will run on Cloud Native platforms with Cloud Native partners and Cloud Native “app store” tiles. Yet, the real generator of future economic value lies in the future of data.

Where is data going next? Imagine looking at something and instantly getting any data you want about it. Well, Pinterest is doing just that with their big data and data science game. They will let you select part of a photo, say a pair of shoes on a ball player or movie star, and then let you search for other similar images. Imagine what happens when they put the capability on your smartphone—take a picture of anything you like and click to buy. Come to think of it, they are closing the loop between our visual input and our wallet output. Certainly, Amazon, Google, Facebook and others are soon to follow.

Data is the future. It is an agenda item in the boardroom. And, Michael Dell just said, “this is where the next trillion dollars comes from for our customers and for our industry.”

See you next year!

About the Author

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