nüvifone™. The navigation phone.
Arguably Microsoft's biggest threat is its irrelevance to Web developers. Though the company dominates personal computing and is a major force in enterprise computing, it remains a distant also-ran to LAMP (Linux, Apache, MySQL, PHP/Python/Perl) development for the growing Web ecosystem. On Thursday Microsoft announced its WebsiteSpark program to build inroads with the Web crowd, but the program is unlikely to make a serious dent on LAMP's dominance.
The reason? There are some big strings attached.
Microsoft has gone after Web developers before, but products like Expressions haven't made much headway with Web developers, as The Seattle Times reports.
WebsiteSpark, following on the heels of successful student (DreamSpark) and start-up (BizSpark) technology seeding programs, will likely make more of a dent. Free, high-quality tools to Web developers, as TechCrunch suggests, are going to be a big win.
But it's not going to be enough.
The problem isn't one of cost. At least, not primarily. WebsiteSpark has that nailed. The program gives thousands of dollars of technology away for just $100 at the end of three years, and then two options ($999 per year for everything or a scaled down $199 per year option) that aren't much more expensive.
But this overlooks the larger issue: Microsoft constrains who can join the program (start-ups with fewer than 10 employees) and meters their growth after the three years. Open-source alternatives do neither.
No upfront cost...but what about the future?
The first constraint isn't a big deal. Many aspiring Googles have fewer than 10 employees, and will continue to be small through their first few years.
The second, however, is the killer. At the end of the three years, Microsoft doesn't require WebsiteSpark participants to buy anything, but if the start-up is successful, it faces big bills as it scales out its Microsoft technology. This wouldn't be a big problem if there were no free alternatives that offer equal or better performance. But there are.
Microsoft tries to spin the open-source LAMP alternative as disjointed, and further argues it is a more expensive development path, and even that Microsoft offers better Web performance than LAMP-based development.
But this isn't the way the Facebooks of the world see it. They view the open-source LAMP stack as the proven, scalable winner in Web development. Microsoft can't match that with a price tag.
LAMP gives Web developers control over their destiny, both in terms of source code (they can finely tune LAMP to fit their needs) and in terms of cost (they need not pay anyone to scale out). They may choose to pay someone like Red Hat or MySQL for a support subscription, but at scale, companies like Google simply don't. They have the expertise in-house to support themselves.
But that's at scale. The problem remains, however, for Microsoft, that many of those sub-10-employee shops are dreaming of being Google, not being a mom-and-pop shop forever. So, if they're seeing thousands of servers in their future, tying themselves to the Microsoft stack, with all the license fees associated with it, is going to look like a poor decision.
Most companies will fail. Most of the rest will remain small. Rationally, most of these small start-ups, then, should be content to get Microsoft's technology for a song, assuming they don't care about the flexibility that comes from LAMP.
The other side is that with open source--which many of these Web developers will have picked up while at school or just on their own--there are no barriers to how the developer wants to use the software. Ultimately, Microsoft's WebsiteSpark requires Web developers to color within the lines that Microsoft dictates. That may be well and good for a big population of developers, but it's not the path that Digg, Google, Facebook, etc., have taken.
Microsoft is huge in enterprise computing, in part because it lowers the cost and complexity of development for enterprises of any size. But the Web is built on open source. Microsoft is playing catch-up in this market, and it's simply not going to be enough to wave great tools in front of developers for a low fee.
Microsoft isn't alone in making such a pitch. Oracle, for its part, is touting the development of OraTweet, a Twitter clone built with Oracle Application Express Web development platform. But the reality is that enterprise ISVs like Oracle and Microsoft are largely invisible in Web development.
This is one reason Oracle is interested in picking up MySQL, the leading Web database. MySQL is almost entirely complementary, not competitive, to Oracle's enterprise-focused database.
Microsoft, however, has no such plans to buy its way into the open-source development community, which means it must rely on programs like WebsiteSpark to catch up. It's a start-up, but it's not enough.
At the recent Red Hat Summit, company CEO Jim Whitehurst quipped that "flat is the new up," but he clearly wasn't referring to Red Hat. On Wednesday Red Hat announced another strong quarter, with revenue of $183.6 million for the company's second fiscal quarter of 2010.
That's a rise of 12 percent compared with the same period last year. Despite the company's against-the-grain performance in a weak market, however, it may need to invest more in its middleware business to ensure future growth.
But first, the good news. Of Red Hat's total revenue, roughly 85 percent, or $156.3 million, came from subscription revenue. That's an increase of 15 percent compared with the year-ago period. Putting this into context, IDC projects Linux subscription revenue to top $1 billion by 2012. Red Hat should claim virtually all of this at its current pace of growth.
Customers seem content to pay Red Hat for free software that they could get more cheaply elsewhere. While recent IDC data hint at hard times to come for commercial Linux vendors, it hasn't hit Red Hat. Not yet. The company is still a darling with CIOs.
And it may not for some time, with Red Hat reporting deferred revenue of $581 million, up 17 percent compared with the same period last year. The company is increasingly profitable, too. It reported net income of $28.9 million, or 15 cents a share, compared with $21.1 million, or 10 cents a share, for the year-ago quarter.
As part of its quarterly earnings call, Red Hat executives revealed a range of reasons to think its business is on track:
- All top-25 customer accounts renewed, and at 120 percent of the prior year's value. Most customers are expanding their adoption of Red Hat, and more and more are upgrading to Advanced Platform.
- Only three of its top-300 customers up for renewal didn't renew in the quarter, and two of those have returned to Red Hat after the quarter closed.
- Two deals were over $5 million, while 10 deals hit $1 million. Red Hat EMEA (Europe, Middle East, Africa) closed its biggest deal ever in the quarter.
- Of the top 30 deals, 23 included Red Hat Enterprise Linux (RHEL) Advanced Platform, and five included a JBoss component. This suggests that Red Hat's big customers are upgrading to Advanced Platform, according to Red Hat CFO Charlie Peters.
- JBoss continues to grow much faster than the core RHEL business.
- Deal length extended to 22 months from 19 months last quarter, reflecting
- One former Red Hat customer, a large financial services company (almost certainly Credit Suisse), dropped Novell's SUSE Linux and returned to Red Hat with a big order in the quarter. Credit Suisse is one of the companies Novell pulled away from Red Hat by using Microsoft-subsidized coupons, but Peters indicated that the customer had returned because of Red Hat's superior value. It appears that Red Hat is a better value than free.
- Red Hat is taking share from its competitors rather than seeing an increase in net new server purchases.
Despite the mostly sunny skies, Red Hat's slowing revenue growth remains a concern. The trend kicked off in 2005 and has continued apace since then despite a brief respite in 2007, as The 451 Group reports.
Of course, as Red Hat gets bigger, and as the economy remains stagnant, it's normal that Red Hat's revenue growth will slow.
But it's also normal that as it slows, companies like Red Hat will look for increased growth beyond their core businesses. Oracle is perhaps the most obvious example of this.
Red Hat doesn't need to get into video game consoles (e.g., Microsoft's Xbox) or hardware (e.g., Oracle's pending acquisition of Sun) or a variety of businesses far afield from its core infrastructure business. After all, Red Hat clearly has a lot of room to grow its JBoss/middleware business, and arguably needn't acquire its way to that growth.
But it does need to significantly change the way it views its channel partners.
Red Hat's traditional Linux partners are absolutely the wrong group to be selling its middleware offerings, a fact that took Red Hat some time to digest. Now, however, Red Hat seems to be getting the picture and has launched its Catalyst Program to sell turnkey open-source solutions through a growing ecosystem of value-added resellers (VARs).
Catalyst, however, is still in its infancy. It remains to be seen whether this program will stick, as Red Hat has moved away from ecosystem efforts like its Red Hat Exchange in the past.
For Red Hat's sake, it should stick with this one. Through Catalyst and other means, Red Hat needs to place more emphasis on the world outside of Linux. The company believes that virtualization and cloud computing are big opportunities, and they are, but these are mostly ways to build upon RHEL, rather than ways to extend its reach into fast-growing, diverse markets.
Red Hat is an execution machine and will undoubtedly be able to continue to grow its Linux business, and possibly to accelerate that growth again through enhanced investments in virtualization and cloud computing. But the real growth for the company is a bit higher up the stack in its middleware business.
Peters said that the company is investing significantly more in JBoss than RHEL, proportionate to the revenue each brings. That's good, but also obvious, given that Red Hat's JBoss business is comparatively small to its RHEL business. It may be time to invest even more in JBoss.
Given the vast and growing number of open-source projects, one would assume its quality had gone down as quantity went up. In fact, the inverse is true, suggests a new report from Coverity, which spent the past three years analyzing more than 11 billion lines lines of code from 280 open-source projects. This is crucial given open source's increased importance to the software industry as a whole, and not merely self-styled "open-source companies."
Among other findings, Coverity's report reveals a 16-percent reduction in static analysis defect density. While Coverity's analysis doesn't cover all or even most open-source projects, which number in the hundreds of thousands, it does tell us a great deal about the quality of the more successful projects like Linux, Firefox, Samba, and PHP.
Each of these projects is growing, and on average their quality is getting better. That's a feat of which few commercial software products can boast.
Such vendors are, however, taking notice. SAP, for example, despite its billions in sales, is trawling for sales leads on open-source start-up Openbravo's SourceForge.net project page.
SAP and other traditional software vendors aren't stupid. They can see a significant customer shift to subscription-based open-source offerings. Customers are increasingly looking for ways to lower costs and boost productivity through open source, as David Buckholtz, vice president of Enterprise Technology and Quality at Sony Pictures Entertainment, told the LinuxCon crowd Tuesday in a panel I moderated. Buckholtz suggested that what started out as a small experiment to replace BEA WebLogic, became a major shift to using open-source technology all over SPE, both to cut costs and improve product quality.
No, not all open-source software is fantastic, and undoubtedly even some of the commercial open-source software offerings are weak. The best open-source projects, as Intel's Dirk Hohndel pointed out in his LinuxCon keynote, are those with strong execution and vision. Just like in the proprietary software world.
Coverity's analysis, however, suggests that open-source software may have the upper hand on its proprietary peers. Open-source quality is almost certainly a direct result of open-source transparency, something Red Hat CEO Jim Whitehurst suggested at Red Hat Summit recently when he opined, "If we all had to walk around naked we'd all spend more time in the gym."
An open-source project will only be as good as the developers who work on it, but those developers have a strong motivation to make the code secure, robust, and high performance. The code is "naked," as it were. The source code is open.
Customers and competitors are noticing.
Disclosure: SAP Ventures is an investor in Alfresco, my employer, and I am an adviser to Openbravo.
A large percentage of IT projects fail, and one big reason is the nature of the traditional software acquisition process. Buyers typically purchase software based on faith (demoware), with acceptance periods built into contracts to provide escape clauses if the software doesn't work as advertised. Open-source software, however, with its "try-before-you-buy" option, provides a better way to increase the odds of a successful IT project, while simultaneously lowering costs.
Enterprise software is hard, and made doubly so when million-dollar decisions must be made about software that has not been tried beyond a sales engineer's slideshow. It's therefore not surprising that Gartner Research Vice President Tony Bell recently suggested that "more than 50 percent of large Enterprise Content Management (ECM) projects fail if less than six months are spent on vendor choice and planning."
The real surprise is that any such projects succeed. Faith is great in religion, but it's a poor policy for enterprise software projects.
Now consider the open-source alternative. Sales cycles for open-source companies routinely average 60 to 90 days, versus the six to nine months (or longer) that proprietary software sales cycles last.
The process for open-source companies is so fast because the prospects start using the software long before they contacted the vendor. On average, I'd put this pre-evaluation duration at three to six months.
In traditional software sales cycles, you have to invent prospects' interest, nurture it along, and then close the deal, all without the customer really getting to experience the software. This can result in very expensive failures.
In open-source sales cycles, you don't really interact with a prospective customer until she has experienced the software for herself and wants something more, like a support subscription.
This is a tremendously powerful side effect of open source.
No, not all open-source software will be right for a given enterprise's requirements. But given the transparency of open-source software, would-be buyers should know well before they write a check and, worst case, they can stop paying their subscriptions if project priorities change or the software stops fitting their needs.
If you're a Mac user with a need for speed, you'll struggle to find a better browser than Mozilla's Camino. Apple's Safari will win a drag race, but it lacks the customizability that comes with an open-source browser like Camino. Unfortunately, both Safari and Camino fall incredibly short against Firefox because both are heavy on speed and light on community.
For those who want a highly optimized, lightning fast browsing experience on the Mac, you can't do much better than Camino, as TechCrunch writes. But most of us want more than that. We want Adblock Plus to filter out ads from our browsing experience. We want Bitly Preview to be able to launch and track tweets from the browser. And more.
Sure, you can "PimpMyCamino," but you won't get nearly the level of detailing that comes with Firefox's impressive community. It's not hard, technically, to migrate from Firefox to Camino, but in the move you're going to end up losing most of the add-ons that make Firefox so powerful.
Camino has ad-blocking functionality built into the browser, and you can find an array of themes to dress it up. But really, the primary reason to use Camino is if you want raw speed. But if that's all you want, Safari is likely a better choice, given the somewhat limited customizations and add-ons available for Camino. Or Google Chrome, which hasn't fully launched on the Mac yet but promises a big speed boost once it does.
Browsing is about more than speed. Firefox delivers a global community with a diverse array of needs and solutions, which is why it remains my preferred browser, even as Camino sprints by, unadorned.
Given the beating Microsoft has taken lately, it's impressive that Microsoft still ranks third in Interbrand's "Best Global Brands 2009" report. Given Microsoft's still-robust brand, what should the company be doing to rejuvenate key areas of its business?
Only IBM (2nd) and Coca-Cola rank higher than Microsoft, and Google (7th) and Intel (9th) trail by a considerable margin. Apple, for all its sex appeal, barely scrapes into the top 20. Such resilience is all the more striking, given Microsoft's less-than-stellar year, as the report suggests:
2009 marks the first year-on-year decline in Microsoft's public history, despite a game console division that continues to be profitable. As the market matures, the giant faces stiff competition from faster, quicker rivals.
In terms of browsing, Microsoft's Internet Explorer has dropped 10 percentage points in market share every two years, while Mozilla Firefox gains 10 percentage points in the same time period. Additionally, a $300 million ad campaign featuring Jerry Seinfeld and Bill Gates could have fared better with audiences.
However, Microsoft's Bing, a new search engine that launched in June to great reviews, is poised to give Google a real run for its money.
(Credit:
Interbrand)
The technology elite may have given up on Microsoft, but the general consumer public apparently has not. What can Microsoft do to further burnish its brand and improve its financial results?
- Throw bling at Bing. Google dominates search to a degree reminiscent of Microsoft's dominance in software for personal computers. Bing, however, has rejuvenated Microsoft's search market share by taking a different, innovative slant on search. Microsoft failed at its me-too Live search competition with Google. It needs to continue to differentiate and innovate.
- Ratchet up its investment in the Xbox. The Xbox makes Microsoft look cool to a class of consumer that is either too young or too cool to buy Microsoft's "desktop" software. The Xbox positions Microsoft as a leader in an industry that doesn't do much to strengthen its personal-computer or server businesses but does wonders for its cachet.
- Accelerate its interaction with open-source companies and developers, and in more positive ways. Years ago, Microsoft made a show of working with SugarCRM and a few other open-source companies. Since that time, the only real "partnership" announcements out of Redmond relate to patent-licensing agreements. This is the wrong message to be sending, as it positions Microsoft as a predator, not as a partner.
Open source need not be a threat to Microsoft, even if individual projects like Linux are. The company's blunt message needs more nuance, and whispering "peace" while yelling "war" (or even the inverse) is not adequate. Microsoft needs open-source communities working with it, not against it.
These are just a few ideas. I'd love to hear yours, particularly with regard to open source.
The reality is that Microsoft struggles to see beyond Linux, when it discusses open source, and this is a mistake, on its part. I have no problem with Microsoft's sanctification of intellectual property, but this insistence on intellectual property leads the company to throw out all sorts of benefits it could be deriving from open source.
Those benefits could include low-cost distribution, an expanded partner ecosystem, external developer review and contributions to its products, Microsoft technology as the center of the world's fastest-growing developer communities, and more.
Microsoft seems to have its game together on Bing and the Xbox, and it increasingly does better in open source. But it has a long way to go, and it needs to realize that the open-source question isn't about peace and love. It's about capitalism.
Open source can drive greater revenue for the company by making Windows much more appealing. There's no reason that Windows, rather than Linux, shouldn't be the default platform for open source--that is, no reason other than Microsoft itself.
Linus Torvalds, founder of the Linux kernel, made a startling comment at LinuxCon in Portland, Ore., on Monday: "Linux is bloated." While the open-source community has long pointed the finger at Microsoft's Windows as bloated, it appears that with success has come added heft, heft that makes Linux "huge and scary now," according to Torvalds.
Is "Tux" getting pudgy?
No. Of course not. It has simply grown as its adoption has expanded. This is the problem with success: you get pulled into an ever-widening array of tasks.
So, while Torvalds declared "We are definitely not the streamlined, hyper-efficient kernel I envisioned when I started writing Linux," Linux is also not the limited-purpose/function kernel he initially envisioned. It's powering everything from corporate data centers to over half of all new smartphones shipped, as the Linux Foundation's Jim Zemlin noted in his opening keynote.
Even so, it begs a question: will Linux become more like Windows as it becomes even more successful?
I suspect that successful open-source projects, generally, will increasingly look more like Microsoft as they grow. Simultaneously, Microsoft is slowly learning from open source, and I think it will capitulate, too.
Will we meet in the middle? Probably. For now, Linux may be getting a bit chubby, but that's likely cause for celebration, not hand-wringing.
Update @ 6:43 A.M. on Tuesday, September 22, 2009:
One thing that I forgot to mention, but which is critical to the success of Linux, is that there really is no such thing as monolithic "Linux." Linux is highly modular and can be trimmed down/beefed up to fit a wide variety of applications...on the developers' terms, not Red Hat's, Novell's, Canonical's, etc.
So, unlike Windows, which can only be what Microsoft dictates, Linux can truly be all things to all people, as "fat" or as "skinny" as the developer wants it to be. Ubuntu is obese compared to sub-100 KB uClinux distributions, for example. Both serve different, and useful, purposes.
Has Yahoo's acquisition of Zimbra failed? All Things Digital reports that Zimbra, an open-source collaboration server company acquired by Yahoo in 2007 for $350 million, is being actively shopped around to potential buyers. If so, it's a failure of Yahoo to go enterprise, and not a failure of Zimbra's technology.
Zimbra was always a bit of a stretch for consumer-focused Yahoo. Zimbra, after all, has always been about the enterprise. While the company flirted with building out its enterprise focus, that distraction become unbearable with Microsoft's advances and its own crumbling fortunes.
Despite Yahoo's poor stewardship of the Zimbra business, it's impressive that Zimbra continues to grow. From my own conversations with various Zimbra executives, sales continue to be brisk and community enthusiasm goes from strength to strength.
Given these facts, Zimbra could be a jewel in the crown of a variety of companies, including Google and Comcast, as All Things Digital suggests, but also IBM, to invigorate its Lotus technology; Adobe, to provide additional SKUs to sell to its broad, SMB customer base; Oracle, to give it a compelling alternative to Microsoft Outlook/Exchange; or a variety of others.
Former Zimbra investor and board member Peter Fenton once told me that he regretted selling Zimbra, as he felt like it had tremendous potential that was only beginning to be realized. Yahoo, with its focus on consumers, was never the right home for Zimbra to realize that potential.
Selling Zimbra may give the open-source collaboration and messaging leader an even stronger position from which to expand.
With the market for initial public offerings in a deep freeze and a dwindling number of potential buyers, start-ups have fewer opportunities to exit and retire to Costa Rica.
This is worrisome to entrepreneurs, but if anything, it should be of even greater concern to the venture capitalists that fund them, a point made by TechFlash's John Cook. Venture capital firms simply aren't structured to invest efficiently in this market.
VCs raised billions of dollars during technology's boom, and it's unclear where they can now profitably invest those dollars. IBM, Oracle, Cisco Systems, and Microsoft can buy only so many companies. The industry consolidation that paid big returns to VCs earlier this decade has left far fewer potential buyers, with an anemic IPO market to provide an alternative outlet.
The situation has the potential to get worse. As IBM's Savio Rodrigues writes, Oracle has been hit hard in its middleware business as enterprise IT seeks to minimize the damage from Oracle and SAP price hikes in applications. This could make it harder for the company to afford acquisitions down the road.
In venture investing, small is the new big. Smaller, strategic funds like O'Reilly Alpha Tech Ventures can score big on a "base hit" $20 million exit, given its seed-stage investments of $500,000 to $1 million. Meanwhile, a large firm such as Kleiner Perkins Caufield & Byers will struggle to break even on such an exit, given that its investments need to be much bigger because its funds are so much bigger.
Venture firms have compensated by throwing money at weaker companies that arguably shouldn't get funded. This isn't sustainable. If exit options are dwindling for good companies, they're nonexistent for bad ones.
Compounding the problem for VCs, not only are exits likely to shrink in the new technology economy, but start-ups need less cash to thrive due to low-cost open-source and cloud infrastructure. This is true for most start-ups, but particularly so for companies that sell open-source software.
VCs potentially need to trim their existing funds, and almost certainly should be raising smaller funds.
For those that want to put existing capital to work, it might make sense to swing for the fences with consolidation around portfolio companies. I've described one winning open-source combination (Acquia, Magento, and OpenX), but there are plenty more. The upside to this strategy is that it fattens up a potential acquisition. The downside is that equity positions get heavily diluted in the process, and there are few potential buyers.
It's hard to make early-stage investments in a climate when entrepreneurs need less money, and when the exits promise to return far less. But that is precisely the environment in which VCs find themselves. It may be time to trade in that Porsche for a Honda.
As cloud computing edges its way into the enterprise, the open-source Apache Hadoop project may well prove to be the poster child of the movement. Hadoop effectively gives enterprises the power of Google or Yahoo Web indexing for free, or for the cost of a CloudEra subscription if you want to involve Hadoop's core developers in your rollout. Credit card giant Visa is an early corporate adopter of Hadoop, and points to a bright future for the open-source project.
I caught up with Visa's Joe Cunningham, head of the technology strategy and innovation group, to talk about the company's adoption of Hadoop.
Q: What got you interested in Hadoop initially and how long have you been using Hadoop?
Joe Cunningham: It's early days for us here at VISA for Hadoop. It's still very much classified as a research and development activity.
My role is the head of technology strategy and research and development for the company. Our task is to look outside the company for interesting technologies on the landscape and identify potential opportunities for those technologies to add value to either the VISA business of VISA technology and then bring them in and play with them in our lab research environment until they are ready for mainstream or commercial activity.
Hadoop is one of those technologies we've been looking at for about a year and we think it offers certain value as an augmentation to existing systems and capabilities VISA has.
Q: How do you use Hadoop at VISA? What made you think it could be the best solution for what you're trying to accomplish?
Cunningham: The most important thing to remember is VISA obviously has a heritage of offerings--very large, very scalable, very reliable, and very secure services to the payments industry. And we're continuously trying to innovate and make those services more valuable to our clients and ultimately to cardholders.
We have a data challenge we attempt to meet every day in terms of the number of transactions we handle and therefore we think there's an opportunity to look at the skills VISA already has in the data analytics space with the power of Hadoop to handle very, very, very large volumes of data.
To put that in context, we handle approximately 200 million transactions a day at VISA. That works out to be about 8,000 transactions a second, and with that comes huge volumes of data and Hadoop offers the potential to harness some of that along with some of our existing capabilities to extract more value from those transactions.
Q: Are there particular directions in which you'd like to see Hadoop evolve?
Cunningham: I think we're interested in looking at Hadoop and looking at its evolution over time. We're certainly interested in how the Hadoop community continues to operate in this open-source environment.
My specific interest is how can Hadoop evolve from the alpha beta environment in which it is today to the mainstream and how can we continue to integrate it as a mainstream technology with all the existing platforms we have here at VISA.
I'll give you two examples. The operations management space is very important to us: how we guarantee the reliability and security of our systems and how Hadoop can be merged or integrated into that environment. And secondly, and I guess this is a common question, but how can we enable SQL-like access to some of the data via the Hadoop file system or via the Hadoop engine?
Q: Given that it's still early days for Hadoop at Visa, it's interesting that you're speaking at the upcoming Hadoop World conference, along with JP Morgan Chase, China Mobile, and other Hadoop users that may be further along the adoption curve. What are you going to be talking about?
Cunningham: I plan to talk about the application stream, so I'll be taking a business-focused view of how we see Hadoop offering value to Visa. If there are tech junkies in the room, they are probably not going to be as interested in what I talk about.
I plan to spend a little bit of time showcasing Visa's technology today to set the scene. I will talk a little bit about our research and development function and how it works with the rest of Visa. Then I'll spend some time expanding on what I call our information products business.
The information products business for Visa offers services to our clients that are, obviously, information-based. So, some of the use cases where we see Hadoop potentially offering value in the future are in the areas of transaction analysis (particularly for risk products and the modeling of risk scenarios), fraud analysis (assisting our clients in potentially managing fraud more carefully), and in the loyalty space where Visa offers services on behalf of our clients to cardholders.
There's an opportunity for us to combine the power of Hadoop with data analytics capabilities that Visa has to augment those services and products on behalf of our clients.
In fact, that's an area that I'm hoping to learn a lot at the event. In some industries, Hadoop is very much mainstream but for some others, it's still emerging and I'm trying to understand whereabouts on that hockey stick or [Gartner] Hype Cycle Hadoop is, or whether Hadoop is already mainstream and it's just a matter of us catching up.
It's always good to gauge and plot that evolution. I think you need to get to these events and talk to other companies and key leaders in the community to really understand where we fit and what we should be doing next at Visa.
For those interested in attending Hadoop World in New York, the organizers are giving Open Road readers a 25 percent discount if you register by September 24.
