Cashing in on Rock Stars & Data Scientists
The Rolling Stones are just now embarking on their new “50 & Counting” tour, named for the number of years they’ve been a band. That’s newsworthy in its own right, but they’re also making headlines for the record-setting price of tickets to their shows. The specific prices vary by city, but range between $150 for the cheap seats to $600 for the good ones. That may seem outrageous to anyone who paid $10 to see them 30 years ago, but that’s supply and demand for you — there are only four Rolling Stones, they come as a package deal, and they can pretty much set their own price.
Just a few minutes after reading about that example of capitalism at work, I read a Yahoo! Finance article titled Hottest Job of the 21st Century? Bet on This. It makes the case that data scientists are the new rock stars of the corporate world, and cites a May 2013 McKinsey study that estimates that by 2018 the U.S. alone will need 140,000 to 190,000 more qualified people with “deep analytical skills” than will be available. I can tell you from personal experience this isn’t just media hype either. Even with the bleak job market for new grads grabbing headlines, I know a very bright new grad who just completed a combinatorics and optimization math degree at a top university and was recruited by an online retail analytics startup while still a sophomore. She doesn’t have any groupies yet, but I’m sure it’s just a matter of time.
Play Ball! – The Prospects for Baseball as a Hot New Trading Asset Class
It’s opening day 2013, and former Wall Street trader Joe Peta is in the news with a new book proposing baseball as the next great trading asset class. It’s just a matter of time before financial planners all over the US are suggesting a mix of stocks, bonds, currency hedges and batting averages as part of retirement planning.
In his book Trading Bases: A Story About Wall Street, Gambling, and Baseball, Peta tells the story of how he’s successfully applied the fact-based analytical approach of a hedge fund to the game of baseball. Using what amounts to proprietary sabermetrics, he claims he was able to beat the odds and return 40% on his capital over a year of betting in Las Vegas. He concludes that the Vegas baseball gambling market doesn’t have enough liquidity to do this on a large scale yet, but it’s an interesting idea with real potential.
Don’t Let “Technical Debt” put your Reputation at Risk
If you ask most financial services CIOs, they’ll say their “wake up in a cold sweat” nightmare is about a system they are responsible for causing an outage that generates embarrassing headlines like this, this or this.
These kinds of incidents have immediate consequences as customers close accounts and regulators levy fines, but the lasting impact, which can be far greater, is the damage to the firm’s reputation. The market has always had a long memory, and the stakes are higher than ever after a five year period marked by scandals and gaffes that have seen public sentiment turn against the banks in general.
In a conversation with the CIO of one of our banking customers, he pointed out that reputational risk has become one of his top priorities and something that’s always front of mind when selecting a technology or designing a new project. He explained that he has come to view complexity as the main driver of risk, and therefore public enemy #1, and his project priorities have been affected accordingly.
The Growth of Middleware Appliances and Preparing for the Zombie Apocalypse
SearchSOA had an article yesterday on the rapid growth in SOA and middleware appliances, a subject near and dear to our hearts here at Solace. Obviously we agree with the observations, given that we are the leading supplier of messaging middleware appliances globally, and have experienced 1512% growth of our own over the past 5 years.
As the megatrends of big-data-scale applications and the move from batch to real-time business processes merge, far more information than ever before is on the move. The resulting data volumes and increases in complexity are the key drivers behind the growing adoption of easier to manage and higher capacity application infrastructures.
In fact, we just prepared a fun little piece of visual collateral highlighting the crazy growth in data rates in virtually every industry and the changing requirements that growth places on your middleware (…and yes, it also addresses what to do if zombies take over your datacenter).
It takes less than five minutes to read, check it out.
The Mad Scramble to be First in US Online Gambling
It has been fascinating to watch the rapid evolution of the US online gambling market after a relaxing of the Federal Wire Act in 2011 opened the door for online Poker (and more) on a state by state basis. In fact, just Thursday the Nevada legislature approved a bill allowing interstate online poker on the quick, because they caught wind that New Jersey may do so next week.
This is a rare, massive, greenfield opportunity in the US that is primed to unfold quickly. According to KPMG, the worldwide market for online gaming is about $32 billion per year today, and that is without meaningful (legal) contribution from the US, the world’s richest economy. Juniper Research estimates that worldwide betting on mobile devices alone will be a $100 billion market 2017. History suggests whoever gets there first with a quality offering will earn the early advantage. So who’s positioned to win?
The Competitors
There are three prime candidates: existing brick and mortar casino operators expanding into online gaming, overseas online gaming brands that adapt their offerings to the US, and startups that are coming at the market from a completely new angle. Let’s take a quick look at each.
Is it Really M2M, or Just Automation?
I am a little embarrassed to admit that I have been thinking about the M2M (machine to machine) market all wrong for a couple years now, at least as the term is popularly used. In my mind, M2M was about applications that cooperate on decision making and taking actions without human interaction. You know, machines talking to machines, as in the science fiction world of “the machines are taking over”.
But as I have talked to some of our customers implementing M2M systems, and read more research on the subject, it seems use of the term M2M heavily favors not the applications in play, but the nature of the devices involved and how they communicate. M2M is really a broadening of the old definition of telemetry or telematics where some non-traditional computing device (like a sensor, a car, a vending machine, a SCADA system) connects (often via a wireless network) to a compute farm and sends in some kind of status information. That’s the source of my confusion – clearly the second M in M2M is almost always a server in a datacenter, but to qualify as M2M the other end has to be some kind of remote sensor or other non-server. When applications running on two servers talk to get work done, that’s just computing. If the work the two applications are doing is replacing some prior human process, you could call it automation, but it’s not what the market refers to M2M. Clear as mud right?
I found a great map of the M2M space at Beecham Research that lays out dozens of examples of M2M in different markets (click here to see the interactive version on their site). This helped me get clear on M2M, perhaps it will help others.
An Easy Way to Increase IT Innovation by 29%
It’s a new year, which means many corporate departments, including IT, have lots of new money to tackle their 2013 priorities. But does it really?
Keeping the Lights On
In truth, corporate IT budgets work a lot like your household budget. By the time you pay for your mortgage, cell phone, cable and utility bills, and lessons for your son or daughter to learn an instrument against their will, you have just a fraction left to splurge on that new car, fun vacation, remodel, or nice dinners out. It’s the same in IT, keeping existing systems running chews up most of your budget, leaving little for innovation. In 2011, IDC estimated that an average of 70% of IT budgets are spent keeping current systems running, with only 30% available for new projects. Just like your own budget, the only way to increase the innovation budget (discretionary income) is to reduce what you’re paying for your fixed expenses.
We’ve recently put together this short video that illustrates how Solace can reduce the cost of your middleware layer to free up money you can use to tackle more of the projects on your wish list. The video explains how Solace infrastructure can save you as much as 80% compared to the same capacity implemented as software middleware running on servers.
It’s worth the 4 minutes if you want the details, but here’s the summary of Solace appliances vs the commercial software you likely run today:
Lowering Maintenance Costs
So how does that impact your overall budget? First let’s break down the 70% that IDC estimates is spent maintaining and meeting the needs of existing systems. If 10% of that 70% goes toward middleware (software, hardware, operations, support, etc.) that means you’re spending 7% of your total IT budget on messaging. 80% of that 7% is 5.6% of your total IT budget, now freed up to fund innovation and new projects. That increases the amount of money available for new projects from 30% to 35.6% — an increase of 18.6%.
Not too shabby. Depending on the size of your company, that’s probably millions of dollars more to improve your company’s competitiveness in the marketplace. But we’re not done yet.
Doing More with the Innovation Budget
Chances are your new projects will also need messaging to distribute data between applications. The same economics apply for saving money on new project spend, meaning less of that budget is spend on middleware.
In the software messaging scenario, again using the IDC figures, assuming 30% of your total IT budget is allocated to new projects, and again assuming 10% of that goes toward messaging, that means 3% of your total IT budget is allocated to messaging in support of new projects, leaving 27% for true innovation.
In the Solace scenario, 35.6% of the budget is available for new projects, and we’ll assume the same 80% savings on the 10% that would have been spent on middleware. That means just 0.7% needs to be spent on new project middleware, boosting the money available for other innovation to 34.9% of your total IT budget, up from 27% with software.
Adding up the Savings
So a serious side effect of using Solace to boost throughput, simplify operations and reduce your datacenter footprint is increasing the amount of budget you have to spend on application innovation by (in this example) 29.2%. And once you’ve made the switch, you see those savings year after year. Going back to your personal budget, think about what 29.2% more discretionary income would do for your next vacation or vehicle purchase?
Of course not every company saves 80% with Solace – for some it may be only 60% and for others it can be 90% or more. In working with our customers we’ve developed some tools and techniques that can help you estimate the results you can expect to achieve given your own systems and situation. Your Solace account team would be happy to help with that. In any case, saving money on middleware is clearly a great way to stretch your IT budget and reach more of your innovation goals in 2013 and beyond.
How a High Growth Technology Company is like a Popular Restaurant
Working at a fast growing technology company is a lot like running a popular restaurant. You run your feet off making sure your customers have the best possible experience through each interaction with your people, products and services. From the way you welcome your guests (marketing), to the way you design your menu (product development), to the nature of the service you provide (sales and support), you’re always asking “how could we do better?” Those restaurants that dedicate themselves to answering this question survive and thrive. If you do it well enough for long enough, someday one of the respected bodies will recognize you as one of the best restaurants in your city or country, or maybe even the world.
Today is one of those days for Solace. Deloitte has published their “Technology Fast 50™” list, recognizing the fastest growing technology companies in Canada, and we’re proud to report that Solace placed 11th on the list, and first in Ottawa with a five year growth rate of 1,512%. This is the third straight year Solace has made the list, having placed 14th in 2010 with a five year growth rate of 2,296% and 25th in 2011 with five year revenue growth of 937%.
We’ve come a long way in the last five years. There are about two dozen companies that sell some form of messaging middleware. In 2007 we had a lot of big ideas, a few financial services customers and confidence that our rapidly improving product was going to be transformational, but based solely on business results we would have ranked near the bottom of that list. Today we have a proven product and a rapidly growing stable of blue chip reference customers in a variety of industries, and according to market analysts we have passed all of our peer competitors and now rank 3rd in the market (measured by annual revenues) behind only IBM and TIBCO.
Being recognized for our rapid growth is a good opportunity to pause, take a breath and appreciate all that we’ve accomplished. I’d sincerely like to thank all of our customers for being open to innovation with new projects, and reducing costs or complexity when incumbent product renewals were at issue. Your trust in us made this recognition possible, and keeping that trust is what will keep us on this list for years to come.
Tomorrow it will be business as usual, but today we celebrate.
Scaling Data Movement when Planning for Big Data
Wikipedia defines big data as “a collection of data sets so large and complex that it becomes difficult to process using on-hand database management tools.” In the majority of cases, that same big data storage requirement comes with a big data movement challenge. Just as companies turn to new data management approaches to capture, store and analyze their very largest data sets, they need to look at new technologies for moving data at big data scale. The prior generation of enterprise messaging middleware such as MQ or JMS simply can’t keep up with the volumes that come with big data requirements.
Betting on Growth in Online Gambling
If there’s one sure bet in online gambling, it is unstoppable global market growth. The US government has twice tried to stall this transition to virtual gaming, first in 2006 when they made it illegal for financial service companies to knowingly collect payments for online gambling, and again in 2011 when they seized the domain names of top poker sites and charged their executives with money laundering.
Surely hampering access to the world’s largest and most affluent market would slow down the pace of online gambling right?