Saturday, February 19, 2011


A Venn diagram illustrating one of the weaknes...

I've been trying to figure out what I think of the technology that IBM demonstrated on Jeopardy recently for the past few days. One thing is for sure, Watson is no Eliza.

As is generally the case when I encounter something new I've primarily trying to figure out what sort of uses this technology might have and how those uses would impact how I and others live our lives. IBM has already announced that they'll be working a company called Nuance that specializes in voice recognition and clinical language understanding to develop a "Physician Assistant" over the next five years. If the two companies are successful they could help save a lot of lives. As is the case with any highly complicated job Doctors have a daunting amount of information both new and old to look at. Being able to quickly wade through that body of knowledge and find only the most relevant facts while performing a patient diagnosis would be of great value both in increasing their productivity and improving accuracy. Doctors are known for being conservative in regards to technologies that change the way they do their jobs though so it is by no means certain that this effort will be adopted even if the technology is developed and proven.

I'd really be interested in knowing what the senior people at Google think of this technology. Let's be honest,, as good as Google is it can still take a lot of effort to find what you are looking for. This is especially true if you're interest is particularly esoteric. Even common searches require a certain amount of effort as it is almost always a good idea to check two or three sources to be sure you're getting an accurate answer. Imagine being able to simply type or speak a question and get an answer along with an idea of how probable the answer was to be correct.  Wouldn't that be nice? Several years back there was a short lived search engine called "Ask Jeeves" that promised to do more or less that. Sadly the reality failed to live up to the hype and they essentially disappeared fairly quickly. You can still go to, but its primary purpose appears to be as a vehicle for delivering ads.

I’d be very surprised if there aren’t already one or more efforts within Google to try to replicate and improve on what Watson is capable of. That will likely be a tough nut to crack though as the real “magic” in Watson is the natural language parsing and I don’t get the impression that Google has a lot of expertise in that area.  I base this assumption primarily on the search results I get back when I type in full sentences. The sentences are generally not as complicated as the ones Watson had to deal with and yet it is obvious that Google makes no use of the context they provide.

Another challenge would be the fact that Watson was using a set of data that was almost certainly of very high quality. While the Internet is a wonderful source of information, there is a lot of noise out there and it is not unheard of for a particular piece of incorrect information to get replicated many times. This could make determining the correct answer to a question more challenging because garbage in almost always equals garbage out in the world of computers. I’d speculate that Watson does some amount of cross checking but again, the more noise the harder it would be to find the right answer.

While Watson is not perfect it does pave the way for other very important evolutionary steps towards a machine that might stand a chance of passing the Turing test. The code that IBM has developed would need additional functionality built on top of it to start doing things like building a body of inferences. It would also need an analog for personal memory and likely other things as well. 

I’m not sure that a true conception of “self” will ever emerge from such efforts but it will be interesting to watch and speculate. I’m much more optimistic that this will happen during my lifetime today than I was a week ago.

Image via Wikipedia
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Tuesday, February 15, 2011

iPhone Nano (Short Take)

Image representing Apple as depicted in CrunchBase
There has been a fair amount of press recently about the possibility of an iPhone nano.  The rumors claim that Apple is working on a smaller version of the iPhone that would be cheaper in order to compete with the less expensive Android based phones.  While Apple could produce a smaller form factor device with the same screen resolution as the 3GS I can see a couple of problems.

First, how well would the on screen keyboard work? Typing on the current iPhone/iPod Touch screen is a little marginal for me, so I can't see how an even smaller display would work with a virtual keyboard.  Of course Apple could include a slide out keyboard instead.  That would address the issue nicely but how much cheaper would a mini iPhone with a slide out keyboard be? Apple hasn't been hot on slide out keyboards in the past, but a different form factor might cause them to change their minds.

The second thing that makes me question these stories is that Apple is all about high margins.  Right now they are making something like 50% of the profits on cell phone sales on 4% of unit sales and there are no signs that this very favorable phenomena is going to change any time soon.  Even the early antenna woes of the iPhone 4 didn't seem to have any impact. Why would Apple want to create a product that would likely have substantially lower margins? I'm not saying it isn't possible, but it seems a bit of a long shot that they would make such a move. It might make sense in emerging markets though. If that is the intended audience then I'm  betting on a slide out keyboard.

Image via CrunchBase
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Sunday, February 13, 2011

Nokia & Microsoft, The Real Story

View of the Nokia corporate headquarters in Ke...
The recently announced strategic alliance between Microsoft & Nokia has been getting a lot of press, much of it negative. Some of that negative feedback has come in the form of a drop in their stock price, nearly 14% on Friday. All this negativity has Nokia CEO Stephen Elop on the defensive. I'm going to answer a couple of questions in this entry. The first one is, why did Nokia do this?

There are likely a number of reasons. The following two graphics will shed some light on one of the major ones.  The first one looks relatively good for Nokia.  Their market share has declined slightly over the past four years, but they are still the largest single player.  Notice how tiny Apple's share is even now, though it has been growing steadily.

The next graphic looks at margins (profit) rather than sales volumes. 

Here's where we begin to see the problem.  Notice how Nokia's profits have been shrinking steadily while Apple's have been growing? Basically what this says is that Nokia has been increasingly forced to compete based on price; and competing on price is almost never a good thing.  Particularly if this isn't the way you've been used to operating in the past. 

There are very few companies out there that like to compete on price. It's much more desirable to differentiate yourself in some other way and keep your margins high. Competing on price can lead to a downward death spiral. This is particularly true in situations where you have plenty of competitors who are smaller and more agile than you are. In the best possible outcome you are the last one standing and your margins are razor thin. You might be able to move back up market at that point but you're going to have a very hard slog. In short this isn't a fight that Nokia wants, win or lose.

So, what can they do? They've clearly failed to generate any excitement in the smart phone space where Apple, RIM & various Android based variants currently rule supreme.  They could join the Android bandwagon, but differentiation in that space is going to be very difficult.  There are plenty of companies out there making Android phones already and most of the opportunity for customization & differentiation lies with the carriers. All of which brings us to Microsoft. Microsoft hasn't had much luck selling any of their various smart phone OS's. Windows Phone 7 hasn't changed that picture much if any so far as I can tell. Still, Microsoft is a major player with significant corporate cachet.  It's easy to see why Nokia was willing to make this deal.  

Of course, that isn't the story they are telling. Nokia CEO Elop is blaming Android and claiming that Nokia is doing this to keep the smart phone market place from becoming a two horse race.  The following is quoted from this article

Wary of that development, Nokia instead decided to back Microsoft and its emerging Windows Phone operating system to make the mobile market more of a “three-horse race,” explained Elop. Because of its heft, Nokia’s decision to support Windows Phone “creates a different dynamic,” said Elop — namely, an environment where Windows Phone, which debuted just a few months ago, is a “challenger” to the forces of Google and Apple.

Apparently RIM doesn't even factor into this race according to Elop. I'm only being a bit sarcastic when I say that such an oversight may help explain why Nokia is in this mess in the first place. Their management is either very much out of touch or incapable of telling a credible story when some spin is needed. I suppose both of those statements could be true. Nokia would have no interest in making this a three horse race if they were one of the two (or really three) front runners right now.

The second question is, who has more to lose in this deal? The answer here is clearly Nokia.  Microsoft would love to see Windows phone 7 take off but given how small a part of their revenues the smart phone space is it isn't going to be the end of the world if Nokia falls flat on their faces. Don't get me wrong, Microsoft could benefit significantly given the changes that we're seeing in how people interact with the Internet but at the end of the day Microsoft still makes their money by selling applications and non phone operating systems and they have plenty of other initiatives in motion that are likely to help them maintain market share. This is a gamble that Microsoft would like to win, but it isn't life or death for them.  Nokia has much more to lose.

On the money front, I suspect that the dollars going back and forth are going to be roughly equal. The point of this deal isn't for Microsoft or Nokia to make money off of the other.  The point is to take a bigger slice of the smart phone pie and share in the profits.

Image at top via Wikipedia

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Saturday, February 12, 2011

The Value of Training

It's been a little under three weeks since my previous post here.  Two of those weeks were taken up by a class where I made an acoustic guitar.  That was a blast.  70+ hours per week of very hard work and learning but I ended up with a very nice guitar and far more knowledge and confidence than I was going to gain by myself in the next several years. This experience reminded me of the value of training.

When money gets tight training budgets are often the first thing to get cut.  It's easy to get into the mindset that training is a frivolous luxury but particularly in the technology sector it's also likely a very bad and wrong assessment. 

I've boot strapped myself numerous times on new technologies.  I've always learned enough to get the job done acceptably.  When I compare those experiences to the ones where I had an opportunity to attend some sort of training beforehand the difference is substantial.  Rather than spending a lot of my time learning the basics of the technology as I went along I was able to complete whatever project I was working much more quickly and deliver a better final product as well. 

Good quality training is a great bootstrap.  At the very least, it will save you time and money. In business taking longer to complete a task or project can have an opportunity cost so it’s reasonable to state that it might even make you money.

All of this ignores the fact that employees often view training as a desirable perk.  Taking that perk away is going to hurt morale and might encourage your most valuable people to look elsewhere.  I’ve seen this happen before.

Productive employees are a key asset to any company.  Timely and regular training helps employees maintain their edge. It’s easy to miss the signs that quality is dropping off in this area initially. This may be why companies cut here first. It's a fools savings in my opinion.