Welcome to This Week in Modern Software, or TWiMS, our weekly analysis of the most interesting and important news, stories, and events in the world of modern software and analytics.
For this edition, our top story addresses what SoftBank’s massive $32 billion purchase of British chipmaker ARM means for mobile and the Internet of Things.
TWiMS Top Story:
SoftBank to Buy Britain’s ARM for $32 Billion in Record Deal—Bloomberg
What it’s about: SoftBank stole the tech headlines this week with its $32 billion acquisition of Great Britain’s ARM Holdings, the semiconductor firm whose chip designs reside on billions of smartphones—not to mention iPads, Kindles, and myriad other devices—around the world. ARM’s chips are also well-positioned for the explosive growth of other connected devices in homes, offices, cars, and elsewhere—commonly dubbed the Internet of Things, or IoT. The deal, which The New York Times’ DealBook called one of the largest of 2016 so far, marks both a milestone in the enormous, maturing mobile market, as well as a colossal bet on our connected future. SoftBank CEO Masayoshi Son said as much at a news conference announcing the deal, according to the Times‘ report: “First there was the internet, then the mobile internet and next there will be the internet of things, which is going to be the biggest paradigm shift in human history,” Son said. “I’m making this investment at the very beginning of this shift.”
Why you should care: While this purchase could be seen as a sign of the UK tech sector’s post-Brexit decline (ARM is one of the UK’s biggest tech firms, and has been called “the most precious jewel in the crown of British technology”), Japan’s SoftBank announced it would keep the company’s headquarters in Cambridge, England, and double its headcount over the next five years. Regardless of location, this is a big, bold bet on the future of mobile and the enormous potential of IoT. While app developers are wise to weigh their areas of focus wisely (see the smartwatch item below) SoftBank’s ARM buy, which appears to preempt a long-rumored acquisition by Intel, is something of a raucous celebration of mobile and a wholly optimistic outlook on the future potential of a vast array of new, connected devices, not to mention the processors and software that will power them. While it’s obviously too soon to know how the acquisition will play out, that’s not stopping the pundits from prognosticating (see further reading below). Whatever your predictions may be, at least one thing is certain: The mobile and IoT landscape has a new superpower.
- SoftBank to Buy ARM Holdings for $32 Billion—The Wall Street Journal
- SoftBank’s $32 Billion Deal for Chip Designer ARM Is Britain’s Biggest Since Brexit—The New York Times
- Softbank’s ARM Buy Signals Mobile Market Disruption—InformationWeek
- ARM Is Another Wild Bet That’s Likely To Pay Off For SoftBank—The Verge
- Why SoftBank Is Spending $32 Billion on ARM—Fortune
- Softbank Buying ARM Is a Bad Idea For Everyone—PCMag
- What Is ARM and Why Is It Worth £24BN?—BBC News
- SoftBank’s $32 Billion Bid for ARM Proves Masayoshi Son IsBack in the Driver’s Seat—Quartz
Microsoft Reports Strong Quarter Powered By Cloud—ComputerWeekly.com
What it’s about: Microsoft continued its recent resurgence on CEO Satya Nadella’s watch, posting impressive fourth quarter earnings that included $3.1 billion in profit on $20.6 billion earnings. (Although ComputerWeekly.com’s Warwick Ashford notes that revenues are actually down a bit year-over-year, profits are way up because Microsoft was writing down its Nokia deal during the same period last year.) The marquee star of Microsoft’s very good week: the cloud. Revenues for Redmond’s Intelligent Cloud unit grew 7% to $6.7 billion, and while there were strong performers across the portfolio, none stood out quite like Azure. The platform’s revenue jumped 102% year-over-year; Azure compute usage doubled in same timeframe, according to the company.
Why you should care: What’s kind of nuts about Microsoft’s cloud-powered reinvention is that Azure, even with its wildly impressive growth, remains in distant second place to Amazon on most cloud scorecards. Yet Microsoft is raking in cash in the cloud, and Azure is still growing at ridiculous rates. The company’s cloud software is thriving, too: its Office 365 franchise hit 23-million subscribers last quarter. With cloud’s continued hyper-growth and increasing maturity, it seems there’s plenty of room for multiple major players. In fact, Microsoft wasn’t the only firm to post rosy cloud news this week: While IBM’s overall quarterly revenues took a hit, Big Blue announced 30% revenue growth for its cloud portfolio. (IBM also reported increases in its analytics, mobile, and security businesses.)
- Microsoft Has Zoomed Back to Relevance After Hitting Bottom—WIRED
- Microsoft Q4 Strong, Office 365 Consumer Subscriptions Top 23 Million—ZDNet
- Microsoft Cloud Drives $22.6 Billion in Revenue—InformationWeek
- Microsoft Earnings FY16 Q4—Microsoft investor Relations
- IBM’s Cloud and Data Analytics Grow As Overall Revenue Slides—Computerworld
The CIO Is Becoming the HVAC Guy—Computerworld
What it’s about: Futurist Thornton May speculates about the future of the CIO in a world where non-technical employees no longer need IT to acquire or deploy software, thanks to ubiquitous cloud and mobile apps. In this new environment, says May, “resources are commoditized and workloads are fungible,” leaving CIOs in danger of becoming “essential but not strategic” unless they take immediate steps to prove otherwise. “If the CIO’s role is just to make sure that everything is running, what is the difference between the CIO and the guy in charge of the air conditioning?” May asks. “I mean no offense to the hard-working professionals who design, manage, and operate air conditioning systems, but there is no such thing as great air conditioning. Either it works or it doesn’t, and if it doesn’t, the guy in charge of it is gone.”
Why you should care: If you’re a CIO, or an aspiring one, this shouldn’t need much explanation. Cloud, mobile, shadow IT, and the groundswell of what’s typically referred to as digital business or digital transformation all require a significant evolution on the part of CIOs and IT teams. May is far from the first to make that claim, but he suggests the audience still isn’t paying enough attention. A CIO who is “essential but not strategic” risks losing C-suite influence to new titles like Chief Data Officer and Chief Digital Officer. The good news: There’s plenty of time for CIOs to advocate their strategic value and solidify their place in the boardroom, because many organizations are still wrapping their collective heads around the means and implications of digital transformation. As ComputerWeekly.com’s Steve Evans also writes this week, CIOs have a great opportunity to be agents of change in their organization’s digital journey.
- Digital Transformation Gives CIOs Chance to Be Agents of Change—ComputerWeekly.com
- Chief Data Officer Stakes Claim in Data Innovation—TechTarget
More stories from the world of modern software this week:
IDC: Smartwatch Shipments Fall for the First Time; Apple Only Company in Top 5 to Decline—VentureBeat
While the cloud appears to be delivering on its hype, not every new technology can say the same. Despite intense press interest and high-profile product launches from top companies, smartwatches don’t seem to be catching on quite yet. New IDC data shows that smartwatch shipments have (already) shown their first year-over-year quarterly sales decline. And as VentureBeat puts it, “It’s all Apple’s fault.” Two caveats: don’t confuse smartwatches with the larger wearable technology market, and keep your eyes peeled for Apple Watch 2.0.
Don’t Panic, But Our Technology Now Defies Human Understanding—Fast Company Co.Exist
The headline nails it. An interview with “complexity scientist” Samuel Arbesman, author of the new book Overcomplicated: Technology at the Limits of Comprehension, reveals a fascinating-but-maybe-a-wee-bit-terrifying truth: We’re building software so sophisticated that it exceeds the limits our human comprehension—including, you know, that of the people who actually built it. No need to hit the panic button, but maybe don’t read this right before you board your next airline flight.
Some organizations keep using legacy systems long after their optimal lifespan out of necessity, some do so out of dysfunction, and others may do so for altogether different reasons. A new lawsuit contends that the FBI deliberately stymies Freedom of Information Act (FOIA) requests by “using a decades-old computer system when queried by citizens looking for records that should be available to the public,” according to The Guardian. Among other claims in the lawsuit filed by FOIA researcher Ryan Shapiro: In addition to using 21-year-old software to query requests, the FBI refuses to do full-text searches of its records. “When few or no records are returned, Shapiro said, the FBI effectively responds ‘sorry, we tried’ without making use of the much more sophisticated search tools at the disposal of internal requestors.”
When Yahoo Ruled the Valley—The New York Times
With struggling Yahoo in the process of auctioning itself off, former employees of the once-towering internet giant share memories of the iconic company’s proud and quirky history. A valuable history lesson for newcomers to the industry, it’s a thoroughly engaging walk down memory lane for folks old enough to remember the days when Yahoo was actually cool. Among the nostalgia and trivia: How Jerry Garcia’s death led to the birth of Yahoo News.
- Former Yahoo Employees Still ‘Bleed Purple’ Even as the Company Faces Tough Times—Reuters, via Business Insider
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