Tag: Google

Google and the Largest Fine in European History | Sherpas in Blue Shirts

On July 18, 2018, the European Commission fined Google €4.34B for anti-competitive practices. In its opinion, Google has created a monopoly with its Android operating system in Europe and, as result, stifled competition in an illegal manner.

Google and the Largest Fine in European History blog image

In my opinion, Google has allowed for cheaper phone prices, flexible app development, and an easy to use interface for customers to access multiple new technologies because of a common platform for innovation. I also believe the thought process behind the fine is potentially creating a market environment that suppresses enterprises’ ability to embrace models that encourage open, rapid innovation.

Google’s Background

Starting in 2011, Google leveraged a data-driven revenue model by giving away the Android operating system to mobile manufacturers with the condition that they pre-install Google applications and the Google search engine on their phones. Google sometimes incentivized the manufacturers to do so. The model elevated Google’s Android global smart phone market share from 36% in 2011 to 83% in 2014.

Because of the overwhelming Android market share, Google attracted developers to write more apps for the Android system, which in turn attracted more users. This data-first policy has positioned Google as the world leader for data collection and has enabled it to generate 90% of the company’s overall revenues from AdWords and AdSense.

A key factor in the European Commission’s decision to hit Google with the massive €4.34B fine component is that it does not acknowledge Apple as a direct competitor in the space, as Google maintains 90% market share in the EU. A key distinction the European Commission made is that Google licenses Android for free to all manufacturers and has not allowed the manufacturers to use Android forks (for example, Amazon Fire), while Apple installs iOS on Apple phones and controls the process from manufacturing to operating system. This led the European Commission to conclude that Google’s practices have led to a monopoly in the marketplace and, as such, it must bring the illegal conduct to an end within 90 days.

Innovative Business Model

Looking at this situation from a very different perspective, I believe that Google created a market stronghold for user data and that it is being punished for creating an innovative business model. Its primary goal was to be the platform that all manufacturers relied on, rather than competing directly for consumers to purchase its phones. (Google did not enter the hardware space until the Google Pixel was released in 2016.) Its model provided a stable, common platform for manufacturers and developers, and allowed for compatibility, choice, and opportunity.

The European Commission has a duty to ensure that a competitive marketplace exists for citizens. To have Google change its current practices and allow users to have the option to choose the platform they want is fair in terms of promoting competition in the operating system market, particularly given Google’s current overwhelming monopoly.

However, handing Google the largest fine in European Commission’s history does not take into account the benefit that the region received with the growth of Android. On a much more macro level, the fine seems to discourage enterprises from embracing a model that will help give them a competitive, sustainable advantage, because if it becomes too successful, the EU will not only act to level the playing field, which is its duty, but also impose large fines on  companies that carve out a competitive advantage.

What is next for Google? It will undoubtedly fight the EU fine, which will push back the sentencing for years. Indeed, after the fine was imposed, Sundar Pichai released a public statement justifying the innovation Android has brought to the mobile device market. The company believes Android provided a stable, universal platform for developers and companies to build mobile apps during the period in question…and I tend to agree.

Google Touts Programmers 10 Times More Productive | Sherpas in Blue Shirts

Are you looking to increase productivity at your company? Google believes that its engineers are 10 times more productive than a typical engineer or programmer. On its surface, that sounds astounding. Yet, Google believes this to be the case. Is it that the people Google hires are 10 times smarter? That doesn’t make sense. We know the distribution curve of IQ means there is no such thing as someone 10 times smarter. So, something else is going on here. What is it?

Let’s take Google’s claims at face value. Here’s how they make their claim a reality. Google hires smart people and then puts them into an environment with accelerators (such as cloud, automation, integration tools and agile product disciplines) that enable them to be 10 times more productive. The results are astounding both in impact and cost to operate.

Let’s compare this this impact to the other most important factor that shaped the market for the last 20 years: labor arbitrage. If you can move work offshore to a third-party service provider, they can pay workers between 20-60 percent of what is paid to onshore workers. After taking into consideration service provider profit margins and overhead, on an hourly cost comparison, this realizes savings of 20-30 percent. If we just compare the cost savings to Google’s claim of 10 times greater productivity, the benefits dwarf those of the arbitrage model.

Read more at my CIO Online blog

AI Bots for Strategy-in-a-Box? This Is Not a Google Problem | Sherpas in Blue Shirts

Most, if not all, of us rely on some form of Google search these days to accomplish our tasks. And because of its ease, we tend to be unwilling to say no to questions because we know we can Google to get the answers. By proxy, this has deluded us into believing we are “experts” on everything.

Bots for strategy-in-a-box
How does this relate to Artificial Intelligence (AI) enabled-bots in a business strategy context? AI is disrupting every walk of the life. The likes of Google (Alphabet) DeepMind, Facebook FAIR, IBM Watson, and Microsoft Cognitive Network Technology are demonstrating increasing use cases by the day. All these platforms crunch massive amount of data to become intelligent over a period of time.

As strategic decisions and long-term initiatives require huge amounts of data to be churned, AI bots are ideal candidates to assist, particularly because it’s not humanly possible to keep track of the multitudes of parameters that must be factored into development of a business strategy in today’s environment. Thus, strategic leaders may have to rely on a second “expert” going forward…an AI-enabled machine expert, that is.

Can the data crunching go so far that enterprises won’t need strategic leaders at all anymore and, instead, will be able to pretty much leverage a virtual agent to create their business strategy? Can this data crunching make the bot a strategy “expert” that can design a strategy out of the box?  Let’s step back for a moment.

Who needs a 10-year strategic plan?
I have argued multiple times that the days of creating a long-term enterprise strategy are well over. Given business and technology disruption, it is becoming impossible to see beyond your nose, forget 10 years. Can an enterprise afford to create a 10-year strategic plan? Can any business leader put her hands on her heart and say she believes in that strategy?

I doubt any enterprise can make that kind of long-term commitment. While a long-term vision used to be the differentiator between a great company and its peers, the differentiation point is quickly becoming how nimble the strategy is to incorporate and adapt to the rapidly changing business environment. Such a dynamic strategy needs to be built on massive amounts of data that incorporates parameters, including disruptions from outside a given industry, which the human mind cannot fathom. For this, enterprises need AI.

Back to strategy-in-a-box from a bot
If the above is the case, should an enterprise opt for a strategy-in-a-box rather than a strategic planning exercise? Can a bot create an enterprise’s strategy roadmap sans business leaders or maybe with just a little help from them? This may sound far-fetched, but it is certainly possible.

One can argue that strategic leaders rely on their experience, intuition, and other factors beyond data to make decisions and create an enterprise vision. While this experience and intuition were valuable when the business environment was largely stable and “known,” in the rapidly changing world these “assets” could be counterproductive. Strategy leaders experience will continue to hold value but less than what is generally thought.

If the enterprises do not need or can’t afford a long-term strategy in this rapidly changing world, why would they need the experience and intuition of strategy leaders? How is this experience that was accumulated in the last 30 years relevant for the coming years in such a fast changing technology environment? Moreover, an AI-enabled bot can possibly compensate for some of this experience and intuition through other parameters such as correlating seemingly uncorrelated data.

Adopting bots as a fulcrum of strategy development may go against the general perception that AI-enabled systems will augment, rather than replace, human powers. I, for one, don’t buy that “enhance human” argument entirely. In fact, humans may be assisting machines to make better decisions, rather than vice versa.

I think next-generation AI, automation, deep learning, and cognitive systems will definitely result in job losses, and we should be prepared for it. The argument that technology in the long term helps create more jobs has been sugar coated, and no one talks about the fact that disruption can create havoc in the short term. And people being impacted by this mayhem see no long term.

However, this is a reality from which we cannot escape. Enterprises need to ensure they are using AI as much as possible in their strategic planning. Believing that AI is only suitable for basic tasks will set them up for disaster.

Therefore, enterprises should not confuse AI-enabled bots as “experts” who rely on Google… “experts” who may not know but still answer. AI-enabled bots will be credible experts who rely on data, massive data, and their own intelligence.

The bottom line is that while your enterprise may not yet be ready for an AI-enabled, bot-developed strategy-in-a-box, you must take baby steps toward that future.

Google acquires APIGEE – APIs to Overhaul Enterprise Technology | Sherpas in Blue Shirts

APIs have been around for a long time; however, the hyper-connected convergence of digital technologies and the increasing maturity of the digital ecosystem as a business model have made APIs a priority across industries. They have become the keys to unlocking a digital ecosystem (also commonly known as an API economy) that includes digital value chain, digital manufacturing, digital marketplaces, and an ecosystem of connected devices as adoption and advancement of technologies such as cloud, IoT, mobile, and analytics continue to increase.

The chart below explains a basic API value chain

Google acquires APIGEE

API management plays a critical role to help enterprises get maximum value out of their API strategy, hence we are witnessing an increase in activity in the API management space.

As enterprises accelerate their journey to build a digital ecosystem, technology companies like AWS, Dell, IBM, and Microsoft among others are helping enterprises on their digital transformation journey with tools and technology platforms. APIs and API management play a critical role here, with examples of investment that include IBM API Connect, Azure API Management, Oracle API manager, CA API management, and Amazon API Gateway among others. Recently Google announced its plan to acquire APIGEE, an API management company. The deal, for US$17.40 per Apigee share in cash for a total of US$625 million, is subject to shareholder and regulatory approvals. This is a significant acquisition for Google as it looks to enhance its enterprise cloud offerings. Adding APIGEE’s technology to its Cloud Platform provides Google with a more compelling value proposition for enterprise customers looking to move IT to the cloud.

Key benefits for Google:

  • API management as a differentiator/value-add for its enterprise cloud offerings
  • APIGEE acquisition brings tools that will help Google better manage its own set of APIs
  • Enhance experience for developers on its platforms
  • Enhance Google’s play in the container market, with its planned Integration of Apigee tools with Kubernetes

In the API management space, several specialist API management firms have been acquired by bigger technology firms looking to offer integrated (value add) services to their customers.

  • In June 2016, Red Hat acquired 3Scale, an API management firm
  • In January 2016, Axway acquired Appcelerator, which provides a framework for building and running APIs called Arrow
  • In April 2013, Intel acquired Mashery, a firm specializing in API management. However, Intel sold Mashery to Tibco in August 2015

We wonder what would happen to other API management specialists such as Akana, Cloud-Elements, Pokitdok, and WSO2 among others – will these also be scooped up by larger technology companies?

API management platforms are used by enterprises to manage their burgeoning need to open up their systems and expose functionality to the outside world due to digital transformation and the need to leverage innovation outside enterprise boundaries. Some implications of the increased activity in the API management space are listed below:

  • Consumer technology firms are pivoting their offerings to target the enterprise market
  • Enterprises need to look at API management as a separate stack in their IT systems
  • A key differentiator for enterprises in the age of connected digital ecosystem is the ability to offer high availability, security, and scalability of its APIs
  • Enterprise technology teams with modern infrastructure and strong API culture are able to attract better talent
  • Increased competition among technology firms that promise to play the role of efficient enablers in the enterprise digital transformation journey – leading to a wave of acquisitions and consolidation as technology firms look to become one-stop shops for all the technology requirements
  • Containers take API design, deployment, management, and integration to the next phase
  • Enterprises can accelerate their DevOps journey with APIs – API management embodies core DevOps principles of continuous delivery by modeling and governing the lifecycle of an API and provide developers and administrators with the needed tools and transparency

Are there other implications you believe should be considered? How do you see the API management landscape shaping up?Google acquires APIGEE

Have a question?

Please let us know how we can help you.

Contact us

Email us

How can we engage?

Please let us know how we can help you on your journey.