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Thursday, September 25, 2008

"I know what you did last time you were around"

For those who value privacy over personalized pitches, opting out of online behavioral advertising is challenging enough. While shopping offline, you could get away wearing a ski mask. The customer analysis systems though, will know what to do when they see that.

It does nag to watch the growth in behavioral advertising online, the practice of tracking users in their Web travels in an effort to deliver more relevant ads. But things are getting out of hand – with the kind of high-tech targeting and profiling that's increasingly showing up in the brick-and-mortar retail world.

Get a load of system used by Israel-based Aroma Espresso Bars. Next to the cash register is a digital display. If you order a coffee in the morning, it may pop up an ad for a croissant. Buy a sandwich at lunch, and the screen may suggest a beverage or dessert. What's more, the suggestions can be tied into inventory management; if croissants are running low, that coffee customer may see a muffin promo instead. In the outlets with the system installed, Aroma says, sales of desserts and beverages featured on the screens have increased as much as 68 percent.

Sounds harmless enough -- just an automated version of the sales clerk's usual upselling exercise. It doesn't start to get creepy until the next step. YCD Multimedia, an Israeli company that sells digital display systems, is starting to equip some of its point-of-sale systems with tiny cameras and facial analysis software that can determine a shopper's sex, race and approximate age and choose which ads to display accordingly. All of sudden you have software doing something we like to discourage among humans -- making gross assumptions about individuals based on crude observations and generalized data. Start extrapolating and you find yourself in the middle of another personalization vs. privacy mess. Wait until the systems are able to observe and analyze more of your characteristics as you stand at the register. At the fast-food outlet, when it sees a person of girth filling its viewfinder, will it suggest super-sizing or a salad? At the coffee shop, will an advanced expression analysis tool see that you are sleepy and recommend a double shot?

Sooner or later, retailers are going to want capture facial-recognition information, link it to a purchase history and have their digital display systems greet you by name and pitch you accordingly. Corporate partners start sharing, and the next thing you know large chunks of your personal information are floating around in another huge database.

No way out. Or is there?

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Wednesday, September 24, 2008

Regulate enterprise vendors first

I can’t really hazard a guess on the coming regulatory overkill. It always does following a massive crisis as the one that is now blowing across the Wall Street and rapidly spilling across the world at large. It’s no longer an American crisis or developed markets crisis, it’s a global crisis now sweeping across economies and industries. Similarly credit tightening does not just entail a crisis of liquidity that folds up investment banks; it’s a business crisis that scuppers momentum out of every enterprise - big or small, global or local.
If there is one breed that still feels a bit casual about it is that of software vendors. The large enterprise vendors like SAP, Oracle, HP, IBM, Microsoft all of them have developed software package applications for different verticals even as the industry itself has been evolving. SAP talks about being able to support 28 industries. It also suggests 100% solutions in each. Yet if you look at its solution maps, it has several "white spaces". It talks about extending them with its partner ISVs and SIs with NetWeaver platformed xApps or has future R&D plans for them. So where is it really? Who will watch them?
How did they do that? Ask any investment banker about the logic behind a CDS, ABS, MBS, CDO, CLO or such alphabet soup, he will still be wringing hands. But the tech vendors seem to `get it’ all and boy they ran with it – screaming vertical capability! Why haven’t the earliest developer / functional analyst that studied the prototype of subprime mortgage and the excessive leverage blown the whistle on the wobbly nature of the foundation?

Answer lies in casualness of approach. To hell, with outcomes. They are concerned with operationalizing a functionality as advertised. So if they provide the plain vanilla financial, CRM, pay roll or HR package to an Investment bank, they claimed I-banking vertical capability. Business transformation – does it also mean driving a healthy business to bankruptcy in a matter of days? Or is it Paramedic filling in for surgeon? God save the patient.

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Tuesday, September 23, 2008

Onward to enterprise collaboration

Too much noise on enterprise collaboration (EC) suite Beehive from Oracle Open World (OOW) in San Francisco.

The expression EC is indeed an oxymoron according to specialist Oliver Marks. Do people collaborate in any enterprise, really? Don’t they bitch one another? Have marketing ever been in love with production? Have the CFO ever appreciated salesman’s travails or ever bothered how sales bring up the topline numbers quarter over quarter? Nothing can be farther from reality.

But yet that’s what Beehive seeks to do – to extract the synergies of having people work more closely together saving money and be more efficient. Often large enterprises have no open editorial environment beyond just news being gathered from all around. At a price of $120 per user seat this is not a system for most small or medium sized businesses but rather a secure solution that can be integrated with existing enterprise infrastructure. Should work well with office workflow systems since the design fits clients that ask for ‘collaboration that works within the structure of our existing business’. The new openness allows integration with SAP or other competitors, and a set of web services that will run on different server platforms - Solaris, Linux, Microsoft.

Oracle take great pains to point out that they are addressing existing customer needs in providing a system that reinforces regulatory needs. Mark Brown, Senior Director of Beehive Business Strategy, cited the recent leak of politician Sara Palin’s private email and increasing regulatory compliance of the financial industry as examples of the need for tighter infrastructure oversight.

Great. But as a true blue consultant, I worry about sales hurdle. How will the CIO get its budget past the CFO? C-level people are either too secretive or even paranoid to freely use collaboration suites that leave a trail. (They can’t say “this was not what I meant” or say “I told you so” later if the stuff sucks). They are more comfortable with over-the-phone-requests that come with in-built “that-wasn’t-me” flexibility. Will they let in a feature that they will never use at such an expense? ;-)

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Friday, September 19, 2008

Accenture as Detroit parts supplier

So we hear Chrysler suing Accenture for failure to deliver on $900 million in promised savings from a low-cost country sourcing initiative. We know Accenture more as a IT outsourcer and not anywhere near a supply chain strategist. Is there something called vendor due diligence or is it all about Detroit firms losing their minds over perpetually falling fortunes? According to the article, "Chrysler paid at least $7.7 million to Accenture for help buying parts in low-cost countries such as China and India. Chrysler thought doing so would save $900 million. Instead, Chrysler saw virtually no savings, court documents say."

Does anyone know what else Accenture is into? Fixing perils of globalization? Saving a crestfallen financial world up next?
Indian IT outsourcing vendors better watch out - might as well get into these new `horizontals' ;-)

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Monday, September 08, 2008

"Let the economics deliver"

By now your grandma will know that the one big cost component in setting up data center is power. Not for computing, for cooling the whirring machines. To get around this, companies have begun setting them up as far as Siberia, so that they can cool server farms by simply throwing open a few windows.

Now Google dips into its vast patent filings and executes a wonder – a floating data center. Yes, a data center that is powered by waves, cooled by water and no property tax to pay because there is no property. It uses a technology called Pelamis wave energy converter that generates electricity into a grid from offshore wave energy. The search giant filed for a patent in February that was approved Aug. 28. The patent outlines a concept that would not only be savvy engineering, but deliver great returns. Rich Miller at Data Center Knowledge calls Google’s patent a “startling new take on data center engineering.” Larry Dignan says “I’d call it brilliant engineering, but the financial engineering could be even more impressive.”

Being a SaaS lover and a cheapskate, I would just wait for the economics to deliver ;)

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