Verizon Goes IoT

Verizon has rolled out ThingSpace, a development platform for companies of all sizes to create Internet of Things applications more efficiently and then later manage those apps.

USAA Exploring Bitcoins

USAA, a San Antonio, Texas-based financial institution serving current and former members of the military, is researching the underlying technology behind the digital currency bitcoin to help make its operations more efficient, a company executive said.

Alex Marquez, managing director of corporate development at USAA, said in an interview that the company and its banking, insurance, and investment management subsidiaries hoped the “blockchain” technology could help decentralize its operations such as the back office.

He said USAA had a large team researching the potential of the blockchain, an open ledger of a digital currency’s transactions, viewed as bitcoin’s main technological innovation. It lets users make payments anonymously, instantly, and without government regulation.

The blockchain ledger is accessible to all users of bitcoin, a virtual currency created through a computer “mining” process that uses millions of calculations. Bitcoin has no ties to a central bank and is viewed as an alternative to paying for goods and services with credit cards.

“We have serious interest in the blockchain and we think the technology would have an impact on the organization,” said Marquez. “The fact that we have such a large group of people working on this shows how serious we are about the potential of this technology.”

USAA, which provides banking, insurance and other products to 10.7 million current or former members of the military, owns and manages assets of about $213 billion.

Marquez said USAA had no plans to dabble in the bitcoin as a currency. Its foray into the blockchain reflects a trend among banking institutions trying to integrate bitcoin technology into their systems. BNY Mellon and UBS have announced initiatives to explore the blockchain technology.

Most large banks are testing the blockchain internally, said David Johnston, managing director at Dapps Venture Fund in San Antonio, Texas. “All of the banks are going through that process of trying to understand how this technology is going to evolve.”

“I would say that by the end of the year, most will have solidified a blockchain technology strategy, how the bank is going to implement and how it will move the technology forward.”

USAA is still in early stages of its research and has yet to identify how it will implement the technology.

In January this year, USAA invested in Coinbase, the biggest bitcoin company, which runs a host of services, including an exchange and a wallet, which is how bitcoins are stored by users online.

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IT Dissatisfaction Growing

Companies want to reduce spending on IT operations and infrastructure and shift resources to revenue-producing areas, according to two new studies. But businesses leaders and IT executives are also registering higher levels of dissatisfaction with IT as more demands are placed on technology.

The reports, by the Hackett Group and McKinsey & Co., both agree that business executives want IT to do more to improve the bottom line while companies spend less on infrastructure in the process.

The bad news for people who work in IT operations is that large businesses expect to cut IT staff positions by about 2% this year, thanks to automation and outsourcing, according the Hackett’s survey of 160 businesses with revenues above $1 billion.

One path to improved automation will likely be through adoption of software-defined infrastructures, something Bank of America plans to do.

IT budgets will grow by 1.7% this year as IT pivots, increasingly, from a service-providing operation to a revenue-generating one, the Hackett Group said in its study.

IT managers are being told that “you’ve got to grow the business, not just run the business,” said Mark Peacock, an IT transformation practice leader and principal at Hackett.

McKinsey & Co., in its online survey of more than 800 executives — with 345 having a technology focus — also found that executives want less of their budgets to go to infrastructure so more resources can be shifted to analytics and innovation.

The McKinsey survey found that business executives are less likely to say now that IT performs effectively, compared to their views two years ago.

“The IT executives are even more negative,” wrote McKinsey, with only 13% of them saying their IT organizations “are completely or very effective at introducing new technologies faster or more effectively than competitors.” That percentage was down from 22% in 2012.

The negative results “likely reflect the overall rising expectations for corporate IT,” wrote McKinsey.

When asked how to fix IT shortcomings, respondents cited improved business accountability, more funds for priority projects and a higher the level of IT talent, the report said.

The Hackett Group survey didn’t report on dissatisfaction, but it did find that the top goal for IT organizations this year is “to strengthen partnership and goal alignment between IT and the business.”

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Twitter Makes A Deal With IBM

Twitter Inc has purchased 900 patents and inked a cross-licensing agreement with IBM, making peace with Big Blue and bulking up on its intellectual property portfolio as it takes on larger rivals Google and Facebook.

The agreement announced on Friday comes after International Business Machines Corp accused Twitter in November – on the eve of its high-profile initial public offering – of infringing three of its patents. At the time, it underscored how few patents the six-year-old social media company possessed in relation to more established rivals.

A cross-licensing agreement will help safeguard Twitter against similar claims in the future.

IBM is one of the industry’s largest research spenders and stockpilers of intellectual property, a consistent leader in U.S. patent filings and the owner of some 41,000 patents.

Twitter is following on the heels of Facebook, which itself faced similar claims before its own 2012 IPO. The world’s largest social network has since gone on a patent-buying spree, acquiring intellectual property from tech bellwethers, including Microsoft Corp and IBM.

“This acquisition of patents from IBM and licensing agreement provide us with greater intellectual property protection and give us freedom of action to innovate on behalf of all those who use our service,” Ben Lee, Twitter’s legal director, said in a joint statement with IBM on Friday.

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App Stores For Supercomputers Enroute

A major problem facing supercomputing is that the firms that could benefit most from the technology, aren’t using it. It is a dilemma.

Supercomputer-based visualization and simulation tools could allow a company to create, test and prototype products in virtual environments. Couple this virtualization capability with a 3-D printer, and a company would revolutionize its manufacturing.

But licensing fees for the software needed to simulate wind tunnels, ovens, welds and other processes are expensive, and the tools require large multicore systems and skilled engineers to use them.

One possible solution: taking an HPC process and converting it into an app.

This is how it might work: A manufacturer designing a part to reduce drag on an 18-wheel truck could upload a CAD file, plug in some parameters, hit start and let it use 128 cores of the Ohio Supercomputer Center’s (OSC) 8,500 core system. The cost would likely be anywhere from $200 to $500 for a 6,000 CPU hour run, or about 48 hours, to simulate the process and package the results up in a report.

Testing that 18-wheeler in a physical wind tunnel could cost as much $100,000.

Alan Chalker, the director of the OSC’s AweSim program, uses that example to explain what his organization is trying to do. The new group has some $6.5 million from government and private groups, including consumer products giant Procter & Gamble, to find ways to bring HPC to manufacturers via an app store.

The app store is slated to open at the end of the first quarter of next year, with one app and several tools that have been ported for the Web. The plan is to eventually spin-off AweSim into a private firm, and populate the app store with thousands of apps.

Tom Lange, director of modeling and simulation in P&G’s corporate R&D group, said he hopes that AweSim’s tools will be used for the company’s supply chain.

The software industry model is based on selling licenses, which for an HPC application can cost $50,000 a year, said Lange. That price is well out of the reach of small manufacturers interested in fixing just one problem. “What they really want is an app,” he said.

Lange said P&G has worked with supply chain partners on HPC issues, but it can be difficult because of the complexities of the relationship.

“The small supplier doesn’t want to be beholden to P&G,” said Lange. “They have an independent business and they want to be independent and they should be.”

That’s one of the reasons he likes AweSim.

AweSim will use some open source HPC tools in its apps, and are also working on agreements with major HPC software vendors to make parts of their tools available through an app.

Chalker said software vendors are interested in working with AweSim because it’s a way to get to a market that’s inaccessible today. The vendors could get some licensing fees for an app and a potential customer for larger, more expensive apps in the future.

AweSim is an outgrowth of the Blue Collar Computing initiative that started at OSC in the mid-2000s with goals similar to AweSim’s. But that program required that users purchase a lot of costly consulting work. The app store’s approach is to minimize cost, and the need for consulting help, as much as possible.

Chalker has a half dozen apps already built, including one used in the truck example. The OSC is building a software development kit to make it possible for others to build them as well. One goal is to eventually enable other supercomputing centers to provide compute capacity for the apps.

AweSim will charge users a fixed rate for CPUs, covering just the costs, and will provide consulting expertise where it is needed. Consulting fees may raise the bill for users, but Chalker said it usually wouldn’t be more than a few thousand dollars, a lot less than hiring a full-time computer scientist.

The AweSim team expects that many app users, a mechanical engineer for instance, will know enough to work with an app without the help of a computational fluid dynamics expert.

Lange says that manufacturers understand that producing domestically rather than overseas requires making products better, being innovative and not wasting resources. “You have to be committed to innovate what you make, and you have to commit to innovating how you make it,” said Lange, who sees HPC as a path to get there.

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HTC Cutting US Jobs

In another sign of trouble at HTC, the Taiwan-based mobile device maker began downsizing its U.S. operations on Friday, eliminating an undisclosed number of staff.

The move is meant to “streamline and optimize” the company’s U.S. organization “after several years of aggressive growth,” HTC said in a Monday email. A company spokeswoman declined to specify how many employees would be affected.

“However, to achieve our long-term goals as a business and return maximum value to our shareholders, this is a necessary step to drive ongoing innovation,” the company said.

HTC has been facing a difficult year on weak earnings that have sent its stock price tumbling. In the second quarter, its net profit plummeted 83 percent year-over-year, despite strong reviews for its flagship smartphone, the HTC One.

The weak financials are major change from only a couple years ago when HTC was riding high selling Android smartphones in the U.S. But starting in late 2011, the company’s net profit has sagged on increased competition from Samsung and Apple.

To recover, HTC has focused on building up its “One” smartphone brand. In addition, the company has expanded its China presence, and in August launched a new marketing campaign that’s enlisted Hollywood actor Robert Downey Jr.

While the company has largely focused selling high-end handsets, in July HTC said it was planning on selling more mid-tier and entry level phones to regain market share. The new phones will launch at end of the third quarter or early fourth quarter.

But the company’s troubles go beyond issues with smartphone sales and marketing. In September, Taiwanese authorities arrested three HTC employees for allegedly stealing company secrets. One of the employees arrested was Thomas Chien, HTC’s vice president of product design.

HTC has declined to offer further details on the case.

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Does The Cloud Need To Standardize?

Frank Baitman, the CIO of the U.S. Department of Health and Human Services (HHS), was at the Amazon Web Services conference  praising the company’s services. Baitman’s lecture was on the verge of becoming a long infomercial, when he stepped back and changed direction.

Baitman has reason to speak well of Amazon. As the big government system integrators slept, Amazon rushed in with its cloud model and began selling its services to federal agencies. HHS and Amazon worked together in a real sense.

The agency helped Amazon get an all-important security certification best known by its acronym, FedRAMP, while Amazon moved its health data to the cloud. It was the first large cloud vendor to get this security certification.

“[Amazon] gives us the scalability that we need for health data,” said Baitman.

But then he said that while it would “make things simpler and nicer” to work with Amazon, since they did the groundwork to get Amazon federal authorizations, “we also believe that there are different reasons to go with different vendors.”

Baitman said that HHS will be working with other vendors as it has with Amazon.

“We recognize different solutions are needed for different problems,” said Baitman. “Ultimately we would love to have a competitive environment that brings best value to the taxpayer and keeps vendors innovating.”

To accomplish this, HHS plans to implement a cloud broker model, an intermediary process that can help government entities identify the best cloud approach for a particular workload. That means being able to compare different price points, terms of service and service-level agreements.

To make comparisons possible, Baitman said the vendors will have to “standardize in those areas that we evaluate cloud on.”

The Amazon conference had about 2,500 registered to attend, and judging from the size of the crowd it certainly appeared to have that many at the Washington Convention Center. It was a leap in attendance. In 2012, attendance at Amazon’s government conference was about 900; in 2011, 300 attended; and in 2010, just 50, Teresa Carlson, vice president of worldwide public sector at Amazon, said in an interview.

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Apple Squashes Rumors

Apple will not develop a new, inexpensive iPhone just for the sake of offering a cheaper alternative, Apple CEO Tim Cook said in a speech on Tuesday.

The company’s focus is on creating great products, and it will not make a smartphone that does not past the quality test, Cook said during a webcast from the Goldman Sachs Technology and Internet conference, which is being held in San Francisco.

“There are other companies that do that, that’s not who we are,” Cook said. “Our North Star is great products.”

Instead, the company is now dropping prices on the older iPhone models. That has been successful, and the demand for iPhone 4 models in December was greater than supply, Cook said.

“It surprised us as to the level of demand we have for it,” Cook said.

Lowering the price on older models is just one of the approaches Apple is taking to reach out to price-sensitive buyers. It’s not easy to balance quality and price, and that’s when innovation comes into play and new products could be created to meet consumer demand, Cook said.

“Sometimes you can take the issue … and you can solve it in different ways,” Cook said.

For example, the first iPod that shipped in 2001 was priced at $399, and now users can buy an iPod Shuffle for $49. There was also a big demand in the past to drop the price of Macs to under $500, and Apple tried and couldn’t do it, so it created the iPad tablet.

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Will Help Desks Become Extinct?

Tom Soderstrom, CTO at NASA’s Jet Propulsion Laboratory (JPL), views everything through the clouds.

NASA’s JPL uses 10 public or private clouds to store everything from photos of Mars for public purview to top-secret data.

Pretty soon, Soderstrom told attendees of Computerworld‘s SNW conference, data stored by large enterprises like NASA will be measured in Exabytes; one Exabyte is equal to 1.5 billion CDs or a million terabytes.

And, he noted, the only place to store Exabytes of data is on public and private clouds.

The good news is that with data in the cloud, people will be able to “work with anyone, from anywhere, with any data, using any device at any time,” he said.

And the not-so-bad news is that IT help desks, as we know them, will become a thing of the past, and IT workers in general will have to rethink how they approach application development and security.

“Now the workforce and consumers of IT are becoming mobile. Have you ever called a help desk for your mobile device? What do you do? Probably, the first you do is Google or Bing it. If you can’t get the answer there, you ask your kids. If you can’t get your answer there, you ask your friends who are like you. For us, that’s the workgroup,” Soderstrom said.

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Can Intel Tablets Take Business Away From iPads?

Tablets based on Intel’s first dedicated tablet processor may not be a smash hit among consumers like Apple’s iPad, but they could find much better acceptance within enterprises, analysts said this week.

Apple’s iPad is the ‘Golden Child’, but Intel’s Oak Trail processor could bring a fresh crop of tablets that are more closely aligned to security, software and hardware needs of businesses, analysts said. By supporting the Windows 7 OS, Oak Trail tablets will integrate better than the iPad into IT environments relying on Windows.

Tablets with Intel’s 1.5GHz Atom Z670 processor from Fujitsu and Motion Computing went on sale this month and will start shipping in June. Fujitsu is taking orders for the Stylistic Q550 Slate PC tablet, which is priced starting at US$729. Motion Computing is taking orders for the CL900 Tablet PC, which is priced starting at $899. The business tablets come with Microsoft’s Windows 7 OS and include solid-state drive storage. Intel has said 35 devices based on the Oak Trail chip will become available starting in May.

Apple may be spurring consumer tablet innovation, but computing needs are very different in the corporate world, said Stephen Baker, vice president of industry analysis at NPD. Outside the Apple ecosystem, there is a whole world of corporate applications and computing needs driven by Windows, Baker said.

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