The New Zealand figures were revealed by the government’s chief statistician, Liz MacPherson, after she was threatened with being held in contempt of Parliament.

Statistics NZ opted for the online survey in 2018. As well as a record low in Kiwi’s filling in the form, there was a doubling in the partial response rate according to National’s State Services spokesperson Nick Smith.

“It is critical that trust and confidence in future censuses are maintained and enhanced.”

According to economic consultants, Berl “…around 480,000 people did not participate in Census 2018. Given the estimated population at the time was 4.88 million, this equates to 10 per cent of the population. To provide some further context, the 480,000 people is around the same size as the entire Waikato Region.”

The scale of the abnormally low 2018 census turnout led much hair pulling and shouting in parliament. The government agreed to appoint a team to conduct an independent review of what went wrong. According to Stats NZ, the review will be undertaken by management consultant, Murray Jack, and a Canadian census expert, Connie Graziadei. Findings from the review are expected to be released in July.

According to the terms and references of the review “the Government statistician is seeking robust independent advice on the 2018 Census, with a focus on understanding what factors contributed to the lower than expected participation rate, so that future censuses and other household surveys can be as effective as possible. Stats NZ is a learning organisation. It holds itself and the way it delivers official statistics to a high standard. Given the importance of the census and the role it plays in informing decisions that affect the lives of New Zealanders, it is critical that trust and confidence in future censuses are maintained and enhanced.”

New Zealand’s census predicament is not unique. In Australia, the 2016 Online Census was marred by the Australian Bureau of Statistics taking the Census website down after what it said was a series of denial of service attacks followed by a hardware failure that led to a misidentification of a larger denial of service attempt.

The political fallout was predictably swift. The then Australian prime minister, Malcolm Turnbull, lashed out at IBM (who had won the contract to host the census in 2014) and the Australian Bureau of Statistics, saying “There has clearly been a failure in the work that was done” and that “My prediction is that there will be some very serious consequences to this”. Shortly afterwards, the Australian government appointed Alastair MacGibbon, the Australian Prime Minister’s Special Advisor on Cyber Security, to conduct a review of the failed census.

The MacGibbon team included senior members from what read like an A-Z of Australian Government Departments. These included the Prime Minister’s office, the Australian Signals Directorate (ASD), the Australian Information Commissioner, the Australian Department of Finance, the Treasury, the Australian Digital Transformation Office and the Attorney-General’s Department plus a liaison officer from the Australian Bureau of Statistics.

The Australian Signals Directorate later confirmed that no data was compromised.

According to the findings of the review “the ABS severely underutilised social media as a communications tool to keep the public up to date and informed of the incident. The ABS’s lack of timely and transparent communications lost it trust because it opened the door to speculation. The continued slow updates and virtual absence from the media meant that ABS struggled to win back the trust of the public in the following days. Ministers must also be supported with clear and accurate advice, and senior executives must be equipped to understand and talk about cyber security as a matter of business risk.”

The rationale for a government to switch to a digital census appears compelling. Not only is it a considerably less costly to undertake than printing and mailing census forms to New Zealand households, but online digital forms can also be simpler to complete in that they can warn of missed or incorrectly answered questions and provide more predefined answers than a printed form. An all-digital census should, in theory, also be a significantly faster operation for statisticians.

As is so often the case, reality proves far more complicated than theory. In a blog commenting on lower than expected turnouts for the 2018 census, New Zealand’s 20/20 Trust, which promotes digital inclusivity, identified several issues that hindered response rates. These included the census not being properly accessible (with difficulties in obtaining a paper census form for those unable to get online) and a lack of briefing to helpdesk staff, who 20/20 also says were inexperienced, compounded issues. The 20/20 Trust also note that the online census FAQ was “fairly superficial”.

Perhaps most critically of all, there was too much emphasis on ‘Digital First’ – it was difficult to get paper forms, and the different user experience of paper forms versus their online counterparts was also not fully appreciated.

The pre-set answers alienated some groups, and many had concerns about privacy. Last but by no means least, testing was fragmented, not ‘whole process’ and didn’t include all the right groups.

The biggest test of an online census is about to happen. In 2020, the US census gets underway and goes digital. Armies of volunteers armed with iPhones will descend on US households to gather census data. There are good reasons for the move to a digital census. Costing US$12 billion, the 2010 census was the most expensive in US history.

Given the mixed track record of online census taking to date, experts are understandably worried that the US Bureau of Statistics could leave itself exposed to numerous new risks, including technology failures and cybersecurity issues.

Meanwhile, New Zealand awaits the findings from the census review team. Watch this space.

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Uber’s line up of investors consists of Toyota Motor Company, Jeff Bezos, Fidelity Investments, SoftBank and Tencent Music. As of October 2018, Uber was funded by more than 96 corporate and private investors, raising over US$22 billion from its capital ventures and investors. Based on this, Uber can claim to be the number-one rated unicorn (a private company valued at over $1 billion) globally.

While Uber has long released partial financial results, the IPO filing provides the first comprehensive look at their numbers and operations. Investors want detail, especially as many already have rival, Lyft’s, March IPO filing as a reference to benchmark Uber’s value. Comparisons between both companies are inevitable, and prospective investors will be keen to break out Uber’s US ride-hailing numbers from global figures as Lyft only operates in North America.

Once floated, Uber will be under considerable pressure to achieve profitability.

Uber disclosed $50 billion in gross bookings last year, up an estimated 45 percent from similar figures in 2017. Ubers data also showed slowing revenues. Of the $11.4 billion revenue reported for 2018, $3 billion were generated in the last three months of the year, up 2 percent from the previous quarter. While that number translates into year-on-year quarterly growth of 25 percent —it fell short of the 38 percent rate recorded in last years third quarter.

In 2017, Uber ran at a loss. It recorded a US$0.8 billion loss in Q1, a US$1.1 billion loss in Q2, a US$1.5 billion loss in Q3 and a $1.1 billion loss for Q4. During the first quarter of 2018, Uber turned a profit of US$2.5 billion which was mainly due to deals made throughout southeast Asia and Russia. The second quarter again revealed a loss of $0.9 billion. Uber CEO, Dara Khosrowshahi, said that Uber would take short-term losses to achieve their long-term growth goals.

Understandably curious Investors are seeking explanations for Uber’s slowing trajectory, and some speculate that these numbers as a sign that Uber’s core ride-sharing business may be stalling. Investors are also likely to want to know what line of business the money is coming from as Uber expands into other sectors including food and package delivery plus e-scooters and e-bicycles, plus Uber has also said that they are looking into driverless vehicles and flying taxis. Uber’s last public valuation was US$76 billion and happened when Toyota invested in Uber in 2018. Further details on the number of shares to be offered and their price are not likely to be known until a later filing.

The multi-billion dollar question now is how attractive Uber will be to investors?

The company is not without its challenges. While Uber’s 2018 revenues were a 42 percent jump over the previous year, their operating losses are significant. The filing shows loses of US$1.8 billion for 2018. While this represents a considerable improvement over the US$4.1 billion losses recorded in 2017, Uber is still prioritising growth over profit.

Much of the speculation around these numbers attribute the losses to competition from Lyft which saw a price war in the US/Canadian ride sharing space, while increasing competition slowed growth in the food delivery space. This is particularly evident with current user numbers. Uber recorded 91 million active users as of the end of 2018, up 23 million on the previous year. Revenue, however, almost halved in 2018.

Further adding to Uber’s US woes was the loss of ‘hundreds of thousands’ of customers in January 2017, following the #DeleteUber backlash against the company after it lifted surge pricing around JFK International during a New York Taxi Workers strike. The strike was in support of protests at US airports over Trump’s immigration policies and the condemnation against Uber was swift.

Uber’s problems extend beyond the US. The company suspended activities in Bulgaria in 2015 after protests and a threatened strike by Bulgarian taxi operators who said Uber practised ‘unfair trade practices’ as Uber drivers operated without taxi licences or any defined legal status. Following an investigation by authorities, Bulgaria’s competition commission fined Uber €50,000 for unfair competition and the Bulgarian supreme court banned the company. Recently passed legislation in Bulgaria requires taxi services to be provided by licensed carriers with qualified drivers on formal contracts.

Uber also exited the Danish market, where it had more than 300,000 customers, in 2017 when fare meters and seat occupancy sensors were mandated for all vehicles operating as a taxi. In Italy, complaints and a six-day strike by the Italian taxi associations saw the Italian courts blocking the Uber app in 2017. A subsequent appeal lifted the ban but only for the company’s Uber Black service, which uses licensed taxi drivers.

The numerous challenges facing Uber will not end there either.

Once floated, Uber will be under considerable pressure to achieve profitability. Industry speculators say that this could force a sea-change within Uber. That said, over the short-term, Uber is likely to see investing in growing user numbers as a priority.

Based on their previous behaviour they are likely to seek to use promotions, incentives, and aggressive discounts. In 2018 over US$3 billion – a third of their total operating costs – was spent on sales and marketing. A continued focus on growth could also see Uber investing in new markets and operations while they continue to underwrite ‘flying taxi’ as well as autonomous vehicle research. All of which raises the question of whether price hikes will be part of a post-IPO Uber?

Uber also faces regulatory challenges. Their business model is reliant on low-cost driver contractors. If regulators rule that Uber drivers are not contractors, but in fact employees (who would then be entitled to benefits and protection via minimum wage laws) losses could grow. In the Uber filing, Uber notes that over 60,000 drivers expressed interest in arbitration over employee misclassification. It says the outcome of this “could result in significant costs”.

Given the hype surrounding Uber’s IPO and investor behaviour around Lyft’s recent float, it is probable that potential investors will be unfazed by Uber’s losses. Lyft lost $911 million in 2018, yet investors valued the company well above its last private valuation. Morgan Stanley Goldman Sachs says Uber could be valued up to $120 billion when it lists, over US$50 billion more than initially anticipated. Uber could surpass Facebook (US$104 billion in 2012) and Google (US$23 billion in 2004). But the company still has a long way to go to reach Amazon and Apple, both of whom achieved trillion-dollar valuations.

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Get it right and it could see the company lowering churn and attracting new customers to their mobile, broadband and landline offerings.

It could also see the Spark brand lambasted and derided for selling the NZ public a bad experience after muscling out Sky TV’s proven and reliable, if costly, alternative.

Regardless, the Spark Sport offering will be a vital component in Kiwi’s enjoyment of the 2019 Rugby World Cup, with Spark securing online rights to the cup, in association with state broadcaster TVNZ.

It’s launch last month received mixed reviews and was followed this week by the shock resignation of Spark CEO Simon Moutter, who has been a key driver in the sports content strategy.

Moutter’s resignation was announced on Wednesday, with current customer director Jolie Hodson taking on the top role from July. Hodson has told the media that she is comfortable with and remains committed to Spark Sport.

So what’s the Spark Sport service, which can be used by anyone, whether a Spark customer or not, like? Spark Sports kicked off with a free 30-day trial. After that, it will set you back $19.99/month.

Platform support is a short-term Achilles heel. While Spark Sport is available as a browser-only option for PCs and Macs, it also supports iOS and Android meaning it will play nice with most smartphones and tablets, and will cast via Apple TV and Chromecast to allow watching on big-screen TV a’la Netflix and Lightbox.

There is considerable debate around Spark’s ability to accommodate a large-scale viewership.

The missing link, however, is a lack of embedded smart TV support, with no Spark Sport app yet available for Android TV (Sony, Philips), Web OS (LG) or Samsung. Jeff Latch, head of Spark Sport has said that support for Samsung, LG, Sony and Panasonic TVs will be added soon.

TVNZ also chips in with 7 games broadcast live on free-to-air TV, including the opening game and the final, as delayed via TVNZ On Demand. While games are still to be announced the presumption is that TVNZ will not follow the All Blacks through the tournament, although some are expecting that will be Spark’s contingency plan in the event of widespread complaints.

Content is streamed in HD (although this does depend on the broadcaster Spark has partnered with). My personal experience was that Spark Sports streaming quality to be reasonable in comparison to other SVOD services.

To date, Spark has signed an attractive line-up of football, motorsport, basketball and hockey. The big drawcard, and the one with the nation’s expectations riding upon it, is rugby: In addition to streaming Women’s Rugby World Cup 2021, the World Rugby U20 Championships and the Heineken Champions Cup, Spark also has streaming rights for the 2019 Rugby World Cup.

Spark is not the only telco to secure online rights for the 2019 Rugby world cup. In Australia, Telstra-backed Foxtel will stream the Rugby world cup via Foxtel Now, the streaming-only version of their Pay TV service. Channel 10 will also stream some coverage, but this will be limited to Wallabies group stage matches and most of the finals.

The Rugby World Cup 2011 semi-finals and grand-final recorded a New Zealand viewing audience of more than two million New Zealand households. Given the growth in smartphone, tablet and PC ownership since then, anticipated viewer numbers for the 2019 event is expected to be somewhat more substantial.

Unsurprisingly there is considerable debate around Spark’s ability to accommodate large-scale viewership. That debate was further inflamed last week when motorsports fans watching the Bahrain F1 qualifying round on Spark Sport found their streaming video disrupted by an unspecified error, and many frustrated with some of the issues that are inherent to streamed “live” content versus Sky TV’s more robust offering.

A Spark spokesperson apologised for the issue, saying they were investigating the issues with their platform provider.

It’s a somewhat familiar issue for streaming sport. In Australia Optus left 2018 World Cup Soccer viewers irate when its service had issues. Optus CEO Allen Lew attributed the streaming woes to unprecedented viewer demand, before announcing the remainder of the tournament would be broadcast on traditional channels.

The F1 debacle heralded a rough few days for Spark, with the company’s stock sliding this week. By Monday afternoon shares were down 3.31 percent. On Wednesday the shock announcement of Moutter’s departure further exacerbated the price drop.

Issues with newly minted streaming services are not unexpected, and the market will move on from Moutter’s surprise announcement, but outages and irate sports fans could quickly turn what should be a golden opportunity into a highly public and brand damaging nightmare as it was for Optus.

Rugby fans will be hoping that Spark have tapped the technical learnings out of the Optus situation, as they have until September 2019 to put any insights gained into play, to ensure a similar debacle doesn’t happen in New Zealand.

Last year Spark switched their Lightbox platform to Brightcove but has yet to announce which platform they are using for Rugby World Cup streaming.

Adding to an already difficult situation, the mix of broadband in New Zealand is comprised of numerous different network technologies, adding complexity for Spark Sport to navigate.

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Funding is assigned via the Strategic Science Investment Fund and each successful data science programme applicant will receive funding to the tune of NZ$1 – NZ$3 million a year for up to seven years.

MBIE says more importance needs to be placed on data science.

“Data science is changing how things are done at an extraordinary rate, providing new ways to improve prosperity and wellbeing. To harness the benefits, New Zealand needs to be at the forefront of the emerging technologies,” MBIE says. “While New Zealand has pockets of world class expertise in data science, current capability is dispersed and small scale.”

Up to $7 million per year for up to seven years was allocated in the 2018 Budget  for investment in the development of stronger data science research capabilities.

Funding is based on responses to real-world use cases, and successful teams will be made up of ‘a team of deeply aligned multi-disciplined partners inspired by a real-world domain/use case’.

“While New Zealand has pockets of world class expertise in data science, current capability is dispersed and small scale.”

MBIE has set investment goals for the programme and has listed the areas of data science that are of interest. These include machine learning, statistical learning, data mining, image processing, language processing, visualisation, transparency and metrics, and Te Ao Māori and data science.

MBIE says it has narrowed down the number of potential data science application areas likely to be of interest to the government. These include ag-tech, the environment, urban planning/environment, the space industry, the health sector (in particular precision health), and energy. Other areas that ‘inspire advanced and data science’ will also be considered for funding on a case by case basis.

The agency will call for proposals in April.

A similar programme last year was abandoned. “We wish to invest in a portfolio of up to four strategic research programmes rather than investing in a single data science research platform,” MBIE now says, adding that it remains committed to an investment in data science. It says the intention of last year’s programme – ‘to lift capability in data science while addressing big challenges for the environment, society or the economy’ – remains unchanged.

MBIE says it is interested in data science because it “is changing how things are done at an extraordinary rate, providing new ways to improve prosperity and wellbeing. To harness the benefits, New Zealand needs to be at the forefront of the emerging technologies.”

The ministry says that the desired outcomes of the investment in data science are to span the following five objectives:

1. Deliver excellence: Produce excellent, cutting edge, dynamic and paradigm-shifting data science research.
2. Grow capability: Grow the scale, depth, excellence and impact of New Zealand’s data science research. The programmes will have strong leadership and multidisciplinary teams. They will attract top international researchers and support emerging researchers.
3. Deliver additionality: Provide fresh and ambitious thinking, new people, new collaborations, new and expanded research, and new impacts that would not have happened without this investment.
4. Leverage strategic collaborations: Foster and grow international and national partnerships amongst data science researchers, and between data science researchers and end users. Partnerships should support research excellence and grow capability.
5. Give effect to the Vision Mātauranga policy practically and meaningfully for Māori.”

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A case in point is Google subsidiary, Wing. They’re trialling a drone delivery service, much to the dismay of residents Bonython, a suburb of Canberra.

While the drones can deliver a hot cup of coffee mere minutes after it gets ordered, locals living under the drone’s flight path say Wing is making their lives miserable as the noise produced by drones flying over makes relaxing in their own homes impossible.

Operators such as Wing are going to struggle to gain public acceptance if they get seen as an annoyance or intrusion by every household they fly over.

So how noisy are these drones? As almost anyone who has spent time near a drone can attest, they are not quiet. Most sound a like an electric weed eater colliding with a hive filled with angry killer bees. Most of the promotional videos of drone delivery services make liberal use of musical backing tracks to drown out the high-pitched scream of drones in action.

To better understand the true problem, watch the video below (with the sound up):

Privacy concerns and stories of drones used as online peeping toms also means many are wary of uninvited drones flying over properties.

Wing’s parent, Alphabet, has said they will tweak the Wing delivery drone sound levels by reducing flight speeds and changing routes. Alphabet says that means their drones will not only run quieter but they will also not pass over the same addresses regularly, ensuring there is less likelihood of them being an ongoing annoyance.

Complaints out of Canberra are not the first, nor are they likely to be the last examples of communities taking issue with Silicon Valley corporates.

When discussing bumpy community relationships and Silicon Valley companies, Amazon is a name that repeatedly crops up. In the US, Amazon has sought out cities and counties to house their fulfilment centres where goods are packed and shipped to customers. Amazon says they created 40,000 full-time jobs, yet the Economic Policy Institute contradicts this in a report that says that counties with Amazon fulfilment centres are not seeing a sizeable boost to their local economies.

The Economic Policy Institute argues that local governments in communities are giving away large sums of money as tax credits, exemptions and infrastructure assistance to Amazon but are not seeing significant benefits as jobs created are offset by jobs lost in areas such as retailing which is contracting due to the growth in online shopping.

Adding insult to injury, working conditions also appear to nosedive in areas where Amazon sets up shop. A UK undercover investigation found that Amazon warehouse employees took to urinating in bottles so that they did not miss strict time targets. When the investigation went public, other Amazon employees came forward to tell similar stories, saying there was no time for bathroom breaks, or even speaking to co-workers. Reports in the New York Post surfaced of Amazon Drivers using vans as improvised toilets, in order to meet delivery targets. In many states were Amazon operate, wealth is not flowing back into communities. In some US states, up to one in three Amazon workers need food stamps as wages are not enough to keep them above the poverty line.

While the impact of Wing’s drone trials is nowhere near as dire or far-reaching as Amazon’s operations, complaints are still flying thick and fast out of Canberra.

Drone delivery services are a perennial tech media topic, and most have yet to eventuate. While big players like Uber Eats have said they are keen to launch a drone delivery service by 2021, many vendors are still grappling with a multitude of issues surrounding drone deliveries.

Perhaps the most significant issues centre around safety and security. Many drones are easy to hack and this, says cyber-security experts, could see drones taken over by malicious actors. Wings delivery drones are able to fly at 120kph at altitude, so the potential for injury (or spilt coffee) is real. Rather than hacking a drone to crash, experts also speculate that hackers would most likely seek to hack a drone and steal the payload the drone was delivering (the lengths people will go to for a good cup of coffee is amazing!).

In countries like Australia or New Zealand with unpredictable weather, strong winds or torrential rain is another risk that could see delivery failures being an issue as drones getting blown off course or crashing. Privacy is also a big issue. Few members of the public are crazy about camera-equipped drones flying over their properties. How companies such as Wing manage this remains to be seen, but a lack of regulatory oversight in different countries could see this issue being a contentious issue for some time.

If the demo videos are any indication, noise is the big challenge. One thing is abundantly clear, drone delivery operators such as Wing are going to struggle to gain public acceptance if they get seen as an annoyance or intrusion by every household they fly over.

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Now, it turns out that a similar bug is about to strike GPS systems, in just 20 or so days.

On April 6, equipment using older GPS technology (and the emphasis here is on ‘older’ – if devices have been getting regular updates, they should be OK) could get hit with what experts are calling a “Week Number Rollover” issue. They say that this could reset GPS receivers, possibly corrupting location data. Given how reliant humanity has become on the global positioning system, the potential for trouble, for those using the old devices, looks significant.

As outages become a part of our daily lives, it is becoming abundantly clear that more and more of our lives are becoming dependent on vast and unknowable server networks.

Older GPS receivers count weeks using a 10-bit field that maxes out at 1024 weeks, or 19.7 years. These 19.7-year periods are called epochs. The first epoch kicked off when GPS launched in early 1980. On August 21, 1999 GPS receivers reset back to zero. While there was no noticeable disruption, experts say that this was because GPS was not widely used. Next date? April 6, 2019.

Now cybersecurity experts are saying that sheer penetration of GPS in our society could result in the April 6 epoch reset leading to disruptions. In an interview last week, vice president of cybersecurity firm Trend Micro, Bill Malik, went as far as to say he wouldn’t risk flying on April 6, when the week count resets.

For many, a more imminent fear of flying stems from Boeing’s recent failures on its now grounded 737 MAX where it appears faulty sensors have contributed to two of the planes falling from the sky.

The question is have we reached a point where we are putting too much trust in technology?

Another potent illustration of this happened in mid-2017 when a particularly ugly tech wreck reared its head. After a power surge at its Heathrow data centre, British Airways’ IT system fell over, leaving tens of thousands of passengers and their baggage stranded. Part of the problem with this outage was the sheer level of inter-dependency. The power spike caused a chain reaction which took out BA’s entire computer systems. It took 48 hours to restore systems so the airline could recommence flights.

Critics argued that BA should have had (and tested) a backup system and a disaster recovery plan. IT staff and their unions blamed cost-cutting at the airline and outsourcing to India.

Perhaps a less severe but still frustrating example was the recent outage that rendered Gmail, Google Drive and other Google services inoperable around the world, which rippled to (clearly mission critical) Instagram, and coincided with an outage at similarly mission critical Facebook.

Thousands of irate users globally lodged outage reports and complaints ranging from not being able to use Google Docs through to email outages that affected business operations.

Our lives are becoming dependent on vast and unknowable server networks, much of which is often hosted in data centres outside of New Zealand, owned and operated by mega corporations such as Amazon and Microsoft.

The creep of computerisation has seen tech becoming an essential part of virtually all industries as digital technologies such as data analytics, automated logistics and databases help transform industry to become significantly more efficient. Tech has made much of our lives better in many ways. Tedious, complicated and time-consuming chores such as booking flights or banking have become ever more easier, to the greater good of society.

However, with this ease comes a dark side. Humanity is beginning to realise how helpless it is when technology fails.

In the UK, doctors found their computers frozen thanks to a ransomware attack that saw them turning patients away. In the recent Christchurch mosque attacks, ISPs and social media networks watched helplessly as horrific live video footage proliferated faster than networks could detect and remove it.

According to the recent Global Navigation Space Systems: Reliance and Vulnerabilities report from the royal academy of engineering, our over-reliance on GPS technologies could see us particularly exposed to GPS outages.

“Society may already be dangerously over-reliant on satellite radio navigation systems like GPS [given that the] range of applications using the technology is now so broad that, without adequate independent backup, signal failure or interference could potentially affect safety systems and other critical parts of the economy,” the report warns.

Nowadays GPS is a technology that is part and parcel of many industries ranging from air travel through to emergency services, utilities, financial systems and supply chains.

“The effects would be more widespread (this time) because so many more systems have integrated GPS into their operations…Ports load and unload containers automatically, using GPS to guide the cranes … Public-safety systems incorporate GPS systems, as do traffic-monitoring systems for bridges. Twenty years ago, these links were primitive. Now they are embedded. So, any impact now will be substantially greater,” says Malik.

So, just how seriously are governments taking the week rollover issue? The US Department of Homeland Security issued a memo which says GPS receivers running the latest IS-GPS-200 standard and connected to UTC shouldn’t be adversely affected. They were followed by the New Zealand Measurement Standards Laboratory and the Australian Signals Directorate who both released explainers, recommending that businesses contact GPS equipment manufacturers.

Consumer GPS navigation hardware maker, TomTom says they have already deployed a firmware fix, saying that “if you frequently update your device there’s no need to worry”.

Unless installed systems are connected to a network, as is the case for many automobile and marine systems, those updates will not have happened.

The post Are we too reliant on tech? appeared first on iStart leading the way to smarter technology investment..

The arguments for cloud database or database-as-a-service (DBaaS) are many, but most boil down to the usual cloud app arguments of flexibility and the fact that the on-demand nature of the cloud can free organisations to focus on their core business while a service provider manages the underlying infrastructure. In short, providing easy access to databases with minimal administration costs is pushing many organisations to move increasingly sizeable on-premise database workloads into the cloud.

According to Orbis Research, demand is growing strongly for DBaaS offerings. Orbis says the emerging cloud database and DBaaS industry had been relatively flat at around 14 percent growth up to 2017. 2018 saw rapid growth in the technology and Orbis is now forecasting that over the next five years, demand for cloud database services will see the DBaaS market surge, with a CAGR over 59 percent.

Two key factors are driving DBaaS growth: Ease of deployment and scalability.

Orbis and most other market analysts tend to agree that two key factors are driving DBaaS growth. These are ease of deployment and scalability. While the debate around DBaaS market inhibitors is robust, the prevailing consensus is that both disaster recovery and security are the key market inhibitor issues for DBaaS.

While medium and small enterprises have been quick to embrace DBaaS, the rapid recent growth is being driven by the large enterprise segment. The fastest growing region for DBaaS has been the Asia Pacific.

Businesses already awash with data are best placed to realise the benefits of DBaaS, but DBaaS isn’t just benefitting enterprises wanting to contain costs. Medium to small business can also realise significant benefits from lower entry barriers and access to technologies that were previously only within reach of their enterprise counterparts. For companies looking to get into the Internet of Things (IoT), data streaming and machine learning (ML), DBaaS offers compelling reasons to leap.

It isn’t all roses though and there are just as many cons as there are pros with DBaaS. Those negatives can include the general rigidity of databases, integration inflexibilities, networking issues and the complexity that comes with managing large data transfers which, let’s face it, are a white-knuckle moment for most CIOs. Because of these and related issues, multi-site data migration requires security precautions.

Further adding to existing complexities is choosing from the many service providers. These range from cloud database specialists, with solutions which have been built for cloud, through to those which are architecturally more akin to remote hosting of your standard on-premise database server. Finding which is the best fit requires navigating and weighing up a long list of variables ranging from price, geography, support/SLA’s and database specs.

US-based Snowflake is arguably the most advanced in ‘pure-play’ DBaaS. The company has built cloud database technology wrapped with data warehouse tooling as a service offering. It saw that conventional data warehouses were struggling to keep up with the exploding demand for data-driven insight within businesses, and were often complex, costly and lacking in flexibility. While there were other ‘big data’ platforms, most lacked flexibility, and many were often toolkits rather than a complete solution. At a practical level, this meant that they required a significant investment in resources to build and maintain. Taking all this into account, Snowflake built a new SQL data warehouse designed to be legacy free and to deliver greater flexibility in a full cloud setting.

Developed as a cloud-based service from the ground up, Snowflake has focused on a platform designed so people could concentrate on deriving insight from data instead of configuring, tuning, and tweaking a data warehouse.

Another fast-moving player in the DBaaS market is MongoDB. It was developed as a low-cost database platform designed with open source software developers in mind instead of database architects.

What makes MongoDB unique is that it provides more flexibility and agility in software development. Traditional databases require users to design a schema in advance. Any changes to that can be challenging to implement. MongoDB allows users to add different data fields relatively easily even after the fact, as it is an unstructured database. Most important of all, MongoDB’s unstructured design lessens the need for costly database administrators. MongoDB products include cloud offerings such as MongoDB Atlas and their serverless platform MongoDB Stitch, both of which has seen MongoDB develop a presence in the DBaaS market.

The post All about DBaaS appeared first on iStart leading the way to smarter technology investment..

As part of a global benchmarking study, consultancy firm Arthur D Little identified Australia as a global leader in terms of its implementation of 5G networks. New Zealand, meanwhile, rated as a follower.

The 5G Country Leadership Index benchmarked 40 countries and found South Korea (who have already installed over 10,000 5G cell sites) to be the world leader in 5G. The US, Australia, Qatar, Finland and Switzerland followed.

“Leaders in the study already have 5G spectrum allocated, backhaul in place and have either launched 5G or are trialling it.”

The Index consisted of analysis of technical infrastructure and 5G commercialisation. The leaders identified in the study already have 5G spectrum allocated, backhaul in place and have either launched 5G or are trialling it.

So how big is the 5G gap between Australia and New Zealand?

At the end of 2018, 5G spectrum auctions concluded in Australia. Four companies won 5G spectrum in the 3.6 GHz band. All 350 spectrum slots were sold, earning the Australian government an estimated AU$853 million.

Spectrum winners included Dense Air Australia who scored 29 spectrum lots for AU$18.5 million. Mobile JV, which is a joint venture between TPG Telecom and Vodafone Hutchison Australia took out 131 spectrum lots for AU$263.3 million. Optus garnered 47 spectrum lots valued at AU$185.1 million, while Telstra won the lion’s share, with 143 spectrum lots purchased for AU$386 million.

New Zealand, by comparison, has yet to get any spectrum onto the 5G starting blocks.

Kris Faafoi, the Minister of Broadcasting, Communications and Digital media only recently announced the availability of the 3.5 GHz band spectrum for 5G and its auction in 2020 – two years after Australia.

While Kiwi telcos gear up for 5G, Optus is already there. They have begun to invite customers in selected 5G coverage areas to take up 5G fixed wireless broadband plans. By talking up unlimited data and a minimum throughput of 50Mbps, it is likely that many will see Optus’s 5G plans as a viable NBN alternative. Optus says that their first 5G mobile services will go live in the first half of 2019.

Telstra has yet to confirm when or if they will offer 5G fixed wireless broadband, but the prevailing wisdom is that it is highly likely. Speculation got helped when Telstra unveiled their first 5G modem in December and their 5G network is already going live within selected areas of Australia. Optus promise 1,200 5G cell sites across five Australian states by 2020. Vodafone has indicated that they will follow Optus and Telstra, switching on their 5G network in 2020.

While the move to bar Huawei from Australian 5G builds seems to not have affected Australia’s 5G roll-out, some are questioning the security motives underpinning the ban.

Fears of Chinese state-sponsored spying saw Huawei banned, and that same sentiment could see equipment from other Chinese suppliers also barred from Australia’s 5G supply chain. The reality, however, is that removing all Chinese networking gear from Australian 5G installations is close to impossible.

The United States 2018 Report to Congress submitted by the US-China Economic and Security Review Commission echoes this point. “US firms and the US government rely on global supply chains that in many cases are dominated by China. While not all products designed, manufactured or assembled in China are inherently risky, the US government lacks essential tools to conduct rigorous supply chain risk assessments.”

If the US cannot be confident its 5G network is secure from perceived Chinese security risks – even if they use gear made in the USA – how can other countries including Australia and New Zealand be confident their 5G networks are secure?

Huawei controversy aside, all things 5G related seem to be progressing at a significantly slower pace in New Zealand. The incumbent telco, Spark, launched a 5G innovations lab in 2018 and has conducted several 5G demonstrations. According to a discussion document from the telco, it is currently in the preparation phase which involves ‘densifying’ cell sites for 5G coverage.

Assuming spectrum auctions go smoothly, all three Kiwi mobile operators expect to go live with a 5G offering in mid to late 2020 at the earliest. The pressure is on for Spark which has plans for a full 5G immersion experience for the Americas Cup sailing regatta, in March 2021.

So, what will 5G look like in New Zealand?

It is probable that 5G will be held back by variants of 4.5G. Sweating existing infrastructure to offer faster data speeds makes much economic sense given players such as Spark had already invested heavily in 4.5G which is also in theory capable of gigabit mobile data speeds.

Beyond 4.5G, the first real 5G offerings are expected to consist of 5G fixed wireless broadband. For all three mobile operators, the economics are likely to prove compelling. Presently, retail arrangements mean they must hand over a chunk of fibre sales margins to wholesale provider Chorus. Using 5G would allow them to bypass Chorus and retain all the margin, making a 5G fixed wireless broadband offering a much more profitable option.

Another big issue is devices. The handsets for 5G are still relatively rare, with only Samsung set to launch the 5G capable Galaxy S10 in New Zealand in the foreseeable future. Huawei, Oppo and several other vendors all announced 5G capable smartphones, but these are unlikely to reach New Zealand until mid-2019 at the earliest. With 5G having already delivered close to 9Gbps, existing mobile data plans are also unlikely to be practical. Building plans with enough data (or even unlimited data) will require a delicate balancing act for telcos seeking a return on investment.

The internet of things is another attractive market for telcos. The big appeal with IoT is that 5G is significantly more scalable than 4G in the machine-to-machine space, meaning it can scale to handle data beamed from thousands, or even millions, of devices. While speed is not expected to be a consideration, 5G’s promised low latency could be a point of difference in specific IOT applications. A key hurdle for telcos will be the existing four IoT networks already in place. Seeking a return on investment in the IoT space when there is already plenty of designed-for-IoT network capacity could prove challenging.

For telcos such as Spark with system integrator capabilities, the low latency and high bandwidth capabilities of 5G could also prove compelling. At the recent Mobile World Congress, Huawei demonstrated thin client video game consoles whose purpose was to stream games rendered in the cloud. Given the near real-time requirements of gaming, it is fair to assume that thin client computing and enterprise cloud applications over 5G could also be on the cards.

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China’s flagship telco company has been thrown into the epicentre of the trade dispute with the arrest of Meng Wanzhou, Huawei’s CFO in Canada, while Washington also accused Huawei of breaking sanctions and intellectual property theft, along with allegations that Huawei assists Chinese state espionage operations.

“Prism, prism on the wall. Who’s the most trustworthy of them all?”

At a media round table at the MWC (#MWC19) in Barcelona, Huawei chairman Guo Ping agreed and expanded on a recent Trump tweet, saying “I have noticed the president’s Twitter. He said that the US needs faster and smarter 5G or even 6G in the future, and he has realised that the US is lagging in this respect, and I think his message is clear and correct.”

In his keynote speech Ping also re-stated Huawei’s commitment to security saying “let me say this as clearly as possible: Huawei has not and will never plant backdoors. And we will never allow anyone to do so in our equipment. We take this responsibility very seriously.”

Taking aim directly at the US, Ping said “Huawei has had a strong track record in security for three decades, serving three billion people around the world. The US security accusation on our 5G has no evidence, nothing”.

Injecting a note of humour in his delivery, Ping also countered with “Prism, prism on the wall. Who’s the most trustworthy of them all? It’s an important question to ask. And if you don’t understand this question, go ask Edward Snowden.”

The debate was further fuelled by comments last week from US Secretary of State Mike Pompeo who said the Chinese telecom giant threatens the ability for Europe to work alongside the United States.

“If a country adopts this [Huawei technology] and puts it in some of their critical information systems, we won’t be able to share information with them,” Pompeo said to FOX Business’ (no less) in a live interview on Thursday. “In some cases there’s risk – we won’t even be able to co-locate American resources, an American embassy and American military outpost.”

Pompeo added that Huawei technology also presents security risks to Europeans.

“We can’t forget these systems were designed with the express work alongside the Chinese PLA, their military in China,” he said. “The risk to privacy from this technology is very, very real.”

He also extended the warnings to other countries, confirming the diplomatic pressure that is being placed on New Zealand and UK governments.

“Over the past months we’ve been out around the world just making sure everyone had the same information, that countries understand the risk of putting this Huawei technology into their IT systems.”

Has a more high profile business-political spat ever reached such lows?

Trump’s tweets however do appear to have softened on the US/China trade dispute, with his latest splutterings being seen as signalling a departure from the hardline US position that Huawei should be barred from Western networks.

Trump original tweet said: “I want 5G, and even 6G, technology in the United States as soon as possible. It is far more powerful, faster and smarter than the current standard. American companies must step up their efforts, or get left behind. There is no reason that we should be lagging on something that is so obviously the future.”

While 6G may count as a classic Trumpism (along with covfefe and so many others), his tweets – for a change – were not a direct attack on Huawei.

Yet Huawei remains locked out of lucrative US government and carrier contracts. Lobbying by the US has also seen Australia barring Huawei’s 5G technology from use by local telco providers, while New Zealand and the UK are on the verge of decisions that will ripple globally.

Meanwhile, Ping’s comments have been backed up by recent announcements from the UK and EU intelligence agencies, with a report from the UK’s National Cyber Security Centre (NCSC), concluding that any potential security threats posed by Huawei’s equipment can be mitigated. Similarly, a meeting of the German cabinet delving into a report by their security services that said they had failed to find any evidence of spying by Huawei. The findings of both the UK and Germany carry considerable weight and could see US lobbying around Huawei rejected by other EU countries.

During the round table, Ping also touched on how Huawei views telco security. He said technology suppliers have a responsibility to supply secure equipment, and carriers are responsible for their network security. He said while both need to work with regulators, cybersecurity needs to be based on fact rather than politics.

“To build safer networks, we need to standardise cybersecurity requirements. And these standards must be verifiable for all vendors and all carriers.” He went on to say that “We need to have a unified standard that should be verifiable. It should not be based on politics, but fact.”

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Theme #1: 5G
The most obvious is 5G. While there has been a steady stream of 5G hype driven by network equipment vendors and handset manufacturers, this year’s MWC19 Barcelona feels somewhat more grounded. Much of this is thanks to finalised 5G technology standards which has seen telcos around the world already testing and getting ready to deploy 5G.

“5G has shifted from last year’s hype to industrial and consumer use-cases and how to monetise costly builds as quickly as possible.”

Much of the 400,000 square metres and 15 pavilions that make up the Fira Gran Via venue are devoted to a seemingly endless array of 5G technologies and demonstrations. With telcos facing growing spectrum and infrastructure investment costs, much of the conversation this year around 5G has shifted from last year’s hype around the theoretical possibilities to industrial and consumer use-cases and how to monetise costly builds as quickly as possible.

Theme #2: Smartphones
No MWC is complete without handsets. MWC 2019 is no exception. With 5G standards now firmed up and telcos across Australia and New Zealand poised to build out 5G networks, the only remaining roadblock is the lack of 5G capable smartphones. The prevailing consensus at MWC the slew of announcements from phone makers around 5G smartphones. Indications are that with 5G deployments set to grow globally, headline-grabbing handsets from big-name phone-makers are all but guaranteed.

5G aside, the ongoing smartphone camera specifications race will continue (Nokia used MWC to launch a new offering complete with five – yes, five – rear cameras) while foldable phones that can convert from the now familiar rectangular smartphone slab into a small tablet look set to grab the lion’s share of media attention out of MWC.

Already, Huawei has used the event to launch its contender in the foldable market: The Mate X with an eight-inch (that’s tablet size) wraparound OLED display, which when folded is effectively a dual screen smartphone. Expect an eye-watering price for the luxury, however, with the Mate X expect to sell for over A$3,500.

Nokia also launched several offerings at the lower end of the market – an area ripe for competition as smartphone prices soar, leaving plenty of room for the vendors such as Huawei to fill the gap.

It is not just handsets either. Consumer gear such as a plethora of bluetooth speakers are featured while industrial and business equipment ranging from robots, biometrics and IoT gear has been hotly anticipated. Connected and autonomous vehicles are already generating a sizeable buzz.

Theme #3: Industry 4.0
Talk of the fourth industrial revolution has been bubbling away for some time but is looking set to gain greater acceptance thanks to connectivity technologies.

Smart manufacturing and IoT are two hot spots that are expected to drive ongoing debate as to whether Industry 4.0 is already underway, and where mobility and mobile networks fit into the picture. Technologies such as machine learning, robotics, mixed and simulated reality, plus where 5G/cellular IoT technologies fit into the picture are all expected to dominate a sizeable chunk of MWC19. These Industry 4.0 building blocks are being showcased in the Innovation City part of Fira Gran Via where an increasing number of innovative use cases are expected to drive enterprise applications and smart city innovations.

Theme #4: Immersive content
One of the most visually impressive parts of MWC19 is expected to consist of mind-boggling displays coined ‘realities’. These are expected to include augmented, virtual, mixed and simulated reality applications for both consumer and industrial use. Headsets, goggles and other cutting-edge display tech make up the lion’s share of the ‘realities’ exhibits which range from immersive marketing demonstrations through to holograms.

Theme #5: Digital wellness
Event organiser and global mobile association GSMA has long been committed to the UN’s Sustainable Development Goals, and MWC event will see digital wellness high on the agenda. Much of the discussion and tech showcased is looking at use cases for mobile technology, IoT and AI to augment and enhance healthcare sector capabilities. Much of this will happen through applications such as real-time health monitoring as well as low latency 5G enabled remote surgery using advanced robotics. There is also a growing emphasis on analytics for driving greater preventative health outcomes increasingly accurate health assessments.

Bonus Theme: The Unexpected
Okay, so I lied – there are actually six themes. Every year MWC manages to deliver the unexpected. This year isn’t expected to be any different. Given the sheer number of press conferences and innovation announcements still under wraps, it is a good bet that both media and industry pundits will be shocked by something completely left-of-field. Watch this space!

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Now, it appears that the trans-Tasman broadband gap could become a chasm.

Chorus has announced it is ready for consumer trials in mid-March to test 10Gbps UFB services in Auckland and Wellington, while Vodafone/Vocus say they’ll soon be offering their own 10Gbps fibre if their unbundling strategy goes to plan.

“We can offer more innovative plans by removing the bottleneck.”

Vocus and Vodafone demonstrated a 10Gbps unbundled fibre connection at an Auckland home last week. Unsurprisingly, given the gathered media contingent, it was incredibly quick, being 10 times faster than the already super fast UFB plans on offer.

Vocus and Vodafone are the only ISPs – so far – who are actively seeking to access ‘unbundled’ UFB, taking advantage of a change to the Telecommunications Act which kicks in on January 1 next year. The change will enable the two ISPs – and any other providers – to hook their own equipment onto the ‘dark’ fibre network. Doing so should, in theory, give them the flexibility to offer customised fibre plans.

To those of us of who care to remember 2400 baud dial-up, 10Gbps fibre seems truly miraculous. It is millions of times faster and makes bandwidth-intensive applications such as streamed VR apps and 4K Dolby encoded a doable proposition.

Sheer speed aside, the move will see New Zealand joining a tiny and exclusive club. Only a handful of countries have offered – or even trialled – 10Gbps broadband.

Performance and international kudos aside, the burning question on the minds of many is what will it cost?

But firstly, why would a move to 10Gbps make sense?

From an end-user perspective, there are plenty of reasons, ranging from bragging rights through to the huge uptake in streaming content. Kiwis demand for fibre is only expected to increase as the Rugby World Cup draws near. Demand for fibre is already well ahead of initial predictions, and growing exponentially, and speed is a key factor in determining the value of various retail offers.

For ISPs, the move to 10Gbps fibre will be a competitive necessity. UFB got built out with upgradability in mind, but moving to 10Gbps is a matter of upgrading the equipment attached to both ends of each fibre connection, and right now it is simply not possible.

Fast mobile data connections are also looming as a threat. While finite spectrum and technology limits mean that a 10Gbps 5G fixed wireless service is still some way off, ISPs offering 10Gbps fibre broadband will effectively head the threat off at the pass (putting Huawei issues aside for a moment).

So is a blazing fast 10Gbps connection something that we’ll see in Kiwi homes anytime soon?

In short, no. Firstly, there is a technical constraint. Few, if any consumer grade routers can offer Ethernet speeds beyond 1Gbps. So that’s the first cost hurdle.

The story is somewhat different for businesses, most of whom use Ethernet coupled with industrial grade routers from the likes of Cisco and Juniper which are often 10Gbps capable.

But 10Gbps fibre capability is undoubtedly on its way. Better still, a healthy head of competitive steam is building as Vodafone and Vocus seek to get a jump on the opposition by touting the unbundled offering. According to Mark Callander, CEO of Vocus, NZ’s third largest ISP, and owner of Orcon and Slingshot, unbundling will mean “better, faster, stronger and better control over customer outcomes.”

The potential commercial benefits for both ISPs are significant. Because Vocus and Vodafone can attach their hardware to fibre connections they will (in theory) be better placed than many competitors to quickly offer plans tailored for specific verticals, for example low latency, fast connections for HD video in the education sector so students who are sick in hospital or at home can attend classes remotely. Vodafone CEO, Jason Paris says this will be “because we can offer more innovative plans by removing the bottleneck.”

There is however a catch, with regulatory hurdles and what are likely to be protracted negotiations with Chorus, needing to be navigated.

Unbundled UFB is the result of revisions to the Telecommunications Act, which go live on January 1, 2020. These revisions allow for UFB unbundling. A potential sticking point is that while the revised law mandates that Chorus must provide access to its exchanges, pricing to do so gets negotiated commercially.

Chorus’s Ian Bonnar says a consultation process has been underway for some time.

“We’ve been undertaking extensive all-of-industry consultation on this since mid-last year, so it’s a bit of a mischaracterisation to describe it as bipartite negotiation.”

Either way, a lot is riding on these discussions for both sides.

Chorus is walking a tightrope as they will need to carefully balance prices to minimise possible impacts on smaller ISPs, who cannot afford to unbundle, and ensure that the long term sustainability of the market, and the network, is not affected. According to Bonnar, this is a tricky undertaking that will see Chorus “trying to find a pricing sweet spot that allows retail service providers to deliver a profitable service while ensuring Chorus makes a return on the billions of dollars of investment it has made in fibre too.

“Note the ‘wiggle room’ to find that sweet spot is tiny – since 2011 layer two costs (layer two refers to the devices Chorus needs to have in place to connect ISPs to the UFB) have made up only around three percent of the combined layer one (the passive or ‘dark’ fibre network infrastructure) and layer two costs. Assuming we are able to make a return on layer one, that doesn’t leave much to play with.”

Which is the second catch in the question of what it will cost.

Vocus and Vodafone, who have already invested a significant amount to be enable to unbundling, will be looking for a suitably low input price so that their investment and future profits get realised.

The show and tell event in Auckland was less about demonstrating the benefits of unbundled fibre, it was also intended to place pressure on Chorus to offer wholesale prices that would make unbundled fibre economically feasible.

While there has been some speculation around the pricing models the companies have used, Paris says while they intend to bring 10Gbps fibre plans to market in January 2020, that date is, at best, theoretical as “Local fibre companies will have to come to the party. That will affect how quickly we can scale.”

Vodafone and Vocus expect the largest of the LFCs (Chorus) to make an offer later this year. While Paris and Callander are keeping their cards close to their chests, some disagreement over pricing is likely, along with calls for regulation.

While Chorus also remains tight-lipped, they are saying that they are not opposed to unbundling as it drives greater utilisation of their network asset. In parallel, Chorus will continue to trial establishment of its own wholesale 10 Gbps service offering.

Sources within Chorus have expressed disappointment at what they say is a lack of engagement by both Vodafone and Vocus around the unbundled UFB price consultation.

Pricing bunfights aside, history has shown that competition is ultimately a good thing. And if it means roundly beating the Aussies in something other than rugby, we say bring it on.

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iStart: The Malwarebytes report says malware authors changed tactics in the latter half of 2018, choosing to target organisations over consumers because of the bigger payoff. What sort of attacks are these, and what sort of payoffs can malware authors expect?

Brett Callaughan: Payoffs vary in each case, however the main goal of malware authors seems to be to exfiltrate data that can be sold to damage an organisation’s brand and reputation. They are also seeking the spotlight and want to gain notoriety but most often they are simply trying to extort businesses out of money by holding data for ransom.

“Malware that is modified by, created by and communicating with an AI is a very dangerous reality.”

iStart: The report says global business malware detections rose 78 percent. What is driving that increase?

BC: Malware authors pivoted in the second half of 2018 to target organisations over consumers because they recognised that a bigger payoff was possible from making victims out of businesses instead of individuals.

We’ve seen significant detection increases across a number of malware categories on the business side over the last 12 months, both globally and in A/NZ. Malware such as backdoors (173 percent), spyware (142 percent), trojans (132 percent) and riskware tools (126 percent) have all significantly increased, leading to an overall rise in A/NZ business detections of 78 percent.

iStart: Is this a tip of the iceberg situation with large numbers of malware exploits going undetected? What is your feel for this?

BC: It is just the tip of the iceberg. As long as there is money to be made, attackers will continue to pose a larger threat to businesses and consumers alike. Into 2019 and beyond, we will continue to see increases in malware detections and attackers will continue to focus on businesses in 2019 due to the greater financial opportunity.

Measures like the Notifiable Data Scheme have highlighted the number of attacks occurring, with the recorded detections increasing steadily with each quarter. It is worth noting, however, that while we are reporting more breaches and security incidents than ever before, the majority of them have always been happening in the background – it’s just that we’ve only started to make them public as of February 2018.

iStart: Are cryptomining attacks on the decline? 

BC: While the rest of the world noticed the decline of cryptomining attacks earlier in 2018, detections in A/NZ did drop off in the second half of the year, falling by 71 percent from August to September. While incidents of cryptomining have fallen, this doesn’t mean the threat of malware is over, with EmoTech and TrickBot detections increasing since mid-2018. Not only does this showcase the shift towards information-stealing malware, but underlines cybercriminals’ constant focus on creating new ways of making a profit from unsuspecting Australasian businesses.

iStart: Why the move to information stealers (such as EmoTet or TrickBot) over cryptominingware?

BC: There are a couple of reasons for the move to information stealing malware such as Emotet and Trickbot, the first being that information is more valuable. There are many ways that this information can be packaged and sold on to other cybercriminals and, depending on the type of details included (financial, medical, etc.), these packets of data can have a long shelf life.

The other reason is notoriety. An attacker gets substantial attention after a breach to a major organisation. Think of the media attention the Madgecart Group received following its series of data skimming attacks in late 2018. The group’s name was reported everywhere and Magecart attacks were heralded as the ‘next big thing’ in cybercrime.

iStart: Cryptocurrency miners saw a 1,164 percent increase in detections across the Asia Pacific region overall – I thought they were on the decline – is this a decline globally or a regional spike?

BC: This high percentage accounts for the earlier part of 2018, when cryptocurrency value was still higher. The decline of cryptocurrency miners in Australasia directly correlates with the declining value of cryptocurrency. Simply put, when the value of cryptocurrencies declined, the cybercriminals were no longer interested and found new ways to secure a big payoff.

iStart: The report lists the threats for Australian and New Zealand businesses – what factors make both markets different?

BC: As a region, Australia and New Zealand run a bit behind the US market from a malware perspective, and cryptomining is the perfect example of this. The boom and ultimate downturn of cryptomining in the US started half way through 2018, whereas A/NZ only started to see the downturn much later in the year.

Because we have a high proportion of small and growing businesses in the A/NZ region, organisations have limited resources and budgets to combat malware threats generally. Australia and New Zealand do differ in the types of malware that they are most susceptible to, however at this time this seems to be due to the preferred attack of the cybercriminal rather than due to any other external factor.

Previous reports like the Q3 CTNT report in 2018 found that backdoor, adware and anomalous (machine learning) malware detections were key differentiators. New Zealand saw significant increases in both the number of backdoor (116 percent) and machine learning detections (209 percent), whereas Australia saw a decrease of 94 percent and 29 percent respectively. The reverse is true for adware, with New Zealand recording a 24 percent decrease in the number of detections, while Australia recorded a 90 percent increase in this kind of malware.

iStart: The report mentions machine learning malware – what is it and how is it a threat to businesses?

BC: While the idea of having malicious artificial intelligence running on a victim’s system is currently pure science fiction, the 2019 State of Malware report predicts that malware that is modified by, created by and communicating with an AI is a very dangerous reality. The threat to business here is yet to be seen, but we can surmise that an AI that communicates with compromised computers and monitors is how certain malware is detected and can quickly deploy countermeasures. The downside is that AI controllers will enable malware built to modify its own code to avoid being detected on the system, regardless of the security tool deployed.

iStart: What are the key threats to businesses in 2019 and what should businesses look to do to give themselves a measure of security?

BC: 2017 focused on ransomware and attacking the consumer, 2018 was the year of the ‘mega breach’, but 2019 will be the year that businesses are in the crossfire.

New, high-profile breaches will push the security industry to finally solve the problem of unsecure usernames and passwords. Ineffective username/passwords have plagued consumers and businesses for years and while there are many solutions available, the cybersecurity industry has not been able to settle on a standard to fix the problem. In 2019, we will see a more concerted effort to replace passwords altogether.

As well as being extra vigilant with software and firmware upgrades, businesses will need to closely monitor their IoT hardware as the new year will see more and more hardware devices being compromised to serve up everything from cryptominers to Trojans.

As we’ve already discussed, cybercriminals will focus attacks on the business sector. To ensure a big payoff, attacks distributing cryptominers will focus on platforms that can generate more revenue such as servers and IoT devices, while others such as browser-based mining will drop significantly.

Both in the business and consumer spaces, the game of cat and mouse will continue, with old tricks applied to new threats and new tactics used for old favorites. Our advice remains to stay informed, stay vigilant and never take the security of your data or devices for granted.

iStart: What changes to the business cyber security landscape does Malwarebytes see for 2019?

BC: We can expect more of the same for 2019. Attackers will continue to focus on businesses because of the increased perceived payoff. Businesses will need to remain vigilant and continue to improve their security posture this year, always remembering that as attackers evolve and become more sophisticated, so too must their security measures.

From monitoring a business’ multiple endpoints, such as executive mobile phones and desktop terminals to securing cloud-based operating systems, a robust, holistic end-to-end security solution is required to protect every facet of the business environment.

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SAP’s CEO, Bill McDermott, says it will “further simplify structures and processes”, while commentary from key SAP officials also indicates that the move is primarily about aligning SAPs’ organisational structure, competencies and resources with strategic growth areas.

“We’re optimising our workforce to actually increase the growth of the company.”

Early indications are that the restructuring could impact an estimated 4,400 employees. The restructuring news came to light after SAP announced mixed Q4 and full year results.

While SAP has managed to maintain revenue growth, profit margins have taken a hit. Overall 2018 revenues were up five percent to US$28.23 billion, from the US$26.81 billion reported in 2017. Revenues aside, year-on-year after-tax profit grew by only one percent to US$4.67 billion. The story was different for cloud subscriptions and support related revenues which were up 41 percent for Q4 at US$1.61 billion, compared to the US$1.14 billion reported in the previous year. Revenues from traditional software licenses and related support grew by a paltry two percent year-on-year to US$5.62 billion from the US$5.50 billion reported in 2017.

The move for greater focus on the cloud by SAP is not unprecedented. In 2017, Microsoft’s Satya Nadella cut 10 percent of their workforce in a bid to reposition Microsoft’s cloud portfolio. The move paid off handsomely for Microsoft, whose annual infrastructure-as-a-service (IaaS) market share growth (98.2 percent) outpaced that of the market leader, Amazon (25 percent) in 2018, according to Gartner. The rise of Microsoft as a cloud player translated into rapid growth in Microsoft’s Azure service, with revenues almost doubling to reach US$3.1 billion in 2017.

According to Gartner, the global IaaS market grew 29.5 percent in 2017 to US$23.5 billion, up from the US$18.2 billion recorded in 2016. The rise of cloud technologies has seen enterprises handing over their data and applications to cloud services providers, with Gartner predicting up to 80 percent of businesses will have shut down in-house data centres by 2025 (Gartner also estimates that this is currently at 10 percent).

SAP executives have disclosed few details about the restructuring, but McDermott has said he expects 4,400 employees could be affected. SAP currently employs 96,500 employees but expects this number to rise to around 100,000 by the end of 2019.

SAP is emphasising the restructure as a positive, saying it is a shift in direction instead of cost-cutting.

“What we’re doing is optimising our workforce to actually increase the growth of the company, just to be very clear,” McDermott says.

He says the move is about freeing up resources to increase spending on strategic growth. The restructuring is expected to incur expenses of US$914 million to $1.09 billion, with the bulk of those projected in the first quarter of 2019.

That said, SAP anticipates that the restructuring will ultimately result in savings of US$857 million $971 million. SAP expects that by 2023, their cloud subscription and support revenues will triple.

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Facebook kicked off the fact checking programme after the 2016 US presidential election. During the election, Facebook came under pressure as reports of fake posts and political propaganda hitting hundreds of millions of Facebook users surfaced.

Snopes was not a sole partner in the programme. Facebook utilises 33 other fact-checking partners around the world to check content in 16 different languages.

“We estimate that anywhere between 30,000 and 40,000 links to false content, possibly many more, have been flagged.”

Other partners, including Associated Press, Factcheck.org and Politifact, have all denied that they too are exiting the fact checking programme. AP told TechCrunch that “AP is in talks with Facebook and we fully expect to be doing fact check work for Facebook in 2019”. Both Politifact and Factcheck.org also confirmed they are not exiting.

Snopes’ decision to exit the programme came amidst growing tensions between Facebook and Snopes.  Many Snopes employees have been quoted saying that their partnership lacked transparency and was often one-sided.

While Snopes and Facebook only recently publicly admitted that their partnership had come to an end, the writing had been on Facebook’s wall for some time. Snopes had stopped fact-checking Facebook posts at the end of 2018 when their $100,000 a year contract with Facebook ended. The split only become public news once both sides conceded that efforts to renegotiate a new contract had failed.

While other fact checkers are still working with Facebook, the departure of Snopes needs to be viewed against the sheer scale of the issues Facebook fact-checkers face.

• CNN says there are 83 million fake Facebook profiles
• Facebook estimate that in the fourth quarter of 2018, a whopping 1.523 billion people used Facebook, daily
• Facebook says users generate four petabytes of data per day

Clearly, Facebook and their fact-checking partners are facing a task of herculean proportions.

Given the sheer size of the problem, the overall effectiveness of manual fact checking is questionable. According to the Poynter journalism institute, only a tiny fraction of Facebook’s mountainous piles of data is getting fact-checked.

“We estimate that anywhere between 30,000 and 40,000 links to false content — possibly many more — have been flagged as part of the partnership,” Poynter says.

Making matters worse, ongoing tensions between fact-checking partners and Facebook are growing. According to the Columbia Journalism Review, “there is an ongoing struggle within the partnership to define ‘fake news’ in a way that doesn’t leave most of the classification power with Facebook, and a general unease among partners about how opaque and unaccountable much of the arrangement is”.

The extent to which these tensions existed bubbled to the surface last year when the Guardian published a report highlighting fact checker partner frustrations arising out of what they saw as a lack of transparency by Facebook.

Former Snopes managing editor and critic of the Snopes/Facebook partnership, Brooke Binkowski was scathing, saying: “They’ve essentially used us for crisis PR. They’re not taking anything seriously. They are more interested in making themselves look good and passing the buck… They clearly don’t care.”

Opinions remain divided as to the effectiveness of Facebook’s war on false news. While some say that the Facebook partnership with fact checkers is a positive, fact checker resentment grew following recent revelations that Facebook had paid a consulting firm to go after opponents by highlighting their association with billionaire philanthropist George Soros. The attacks fed into conspiracy theories of Soros being behind numerous liberal causes and other events. It later emerged that Sheryl Sandberg, Facebook COO, had directed staff to research Soros’s interests following his negative Facebook comments.

For many fact checkers, this was the final straw. One fact checker, who spoke on condition of anonymity, was quoted by the Guardian saying “Why should we trust Facebook when it’s pushing the same rumours that its own fact-checkers are calling fake news?” These sentiments were echoed by Binkowski, who said: “You cannot speak truth to power if you’re being paid directly by power”.

Facebook needs to get his sorted as quickly as possible as there’s a lot at stake. Having already racked up some of the biggest losses in US sharemarket history last year, Facebook investors are still jittery. The company’s reputation is likely to continue to come under considerable public scrutiny and Mark Zuckerberg needs to be able to reassure investors around data privacy, and fake news or these two issues may undermine Facebook’s business model.

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The Digital DNA tool provides companies wanting to humanise digital customer service with a means of crafting digital humans, right down to the colour of the avatar’s eyes, the shape of their face, wrinkles and even blemishes (chatbots with zits? whatever next?).

Soul Machines have already had a significant amount of success, with their digital humans in use at companies including ANZ Bank, Autodesk and the Royal Bank of Scotland. Automaker Daimler has also invested in the company.

“The gene pool is used to synthesise new digital humans by blending Digital DNA together.”

Where the process of creating and rendering a photo-realistic human face has traditionally been a labour-intensive process typically requiring both specialised hardware and software as well as a significant investment in time, Soul Machines says their Digital DNA tool can create photo-realistic humans in mere minutes.

This is because Soul Machines has created numerous digital humans, including their intelligence and physical characteristics, with the captured data now being used to create a “virtual gene pool” for the Digital DNA offering.

“This gene pool is used to synthesise new digital humans by blending Digital DNA together. This allows Soul Machines to create a completely new digital human in minutes versus the months it previously took,” Soul Machines says.

The 3D rendered human faces are about as close to the real thing as it is possible to get. Don’t take my word for it, test it out for yourself at the ANZ website with their Soul Machine Chatbot, Jamie.  She coped with my standard banking questions and even managed to field several curveball questions with something approximating a sense of humour.

Gartner is bullish about the outlook for AI in customer relationship management. Their report Forecast: The Business Value of Artificial Intelligence, Worldwide, 2017-2025, forecasts the global business value derived from AI to grow from US$1.2 trillion in 2018 to US$3.9 trillion by 2022.

That said, while Jamie managed to be both expressive and articulate, the uncanny valley was still very much a thing. The phrase ‘uncanny valley’ may sound like a UK soap opera, but it also refers to the typical emotional response that occurs when people encounter a robot that is almost, but not quite, human in appearance. The term was first coined in 1970 by Japanese roboticist Masahiro Mori. He found that as robots became more human-like, people tended to see them as a more acceptable option than their mechanical looking counterparts – but only up to a point. When robots got close to, but not quite, human-like, people tended to become uncomfortable.

In short, Jamie may look and sound human, but only up to a point. And here at iStart, we’ve had some reservations.

Despite that it’s easy to see why there is optimism around digital humans. From a business perspective using AI and super-realistic chatbots for support and the personalisation of customer communications allows businesses reduce support costs and will also free up staff to focus on business priorities.

However, a sizeable risk also underlies their optimism. What about how your customers might feel about engaging with a chatbot? Those with pressing problems they want to get resolved will almost always choose to deal with a human rather than the inflexible and canned responses of a machine. Besides, venting at a chatbot isn’t ever likely to be a satisfying experience.

Many customers stuck with the choice of a call centre in the third world or dealing with a chatbot are likely to feel it’s a case of being caught between the devil or the deep blue sea. Even if the human chatbot at the other end is ultra-realistic, there needs to be caution when leaving the most sensitive part of your business (the customer experience) to AI. Even if AI continues to evolve to develop machine consciousness as realistic as Soul Machines virtual agents, they are unlikely to be able to capture and understand the subtle nuances of interpersonal communications anytime soon.

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That this group, as yet unnamed, has formed ahead of Australia’s general election also fits well with earlier calls from unions and policymakers for regulatory intervention around AI. As reported earlier, the digital economy is already shaping up as a key political issue in the looming election. Given its potential impacts on jobs and the wider economy, AI is likely to be at the forefront of the debate.

“AI has become something of a political football.”

Team members include the former CEO of Telstra, the current CSIRO and JobsNSW chairman, David Thodey; KPMG Law national leader, Stuart Fuller; professor at Australian National University and director of 3A instituted, Genevieve Bell; and the University of NSW chair in innovative disruption and the law, Ross Buckley. In an open letter sent to Australian business and government leaders, the team highlights both the potential of AI as well as its risks, calling for national debate as the first step in avoiding social, economic and ethical pitfalls associated with AI.

While the group has shied away from traditional industry groups like the Australian Information Industry Association or any specific political alignment, the high-powered membership of the group means they are likely to inform future federal governments when it comes to crafting and implementing AI related policy.

Calls for AI regulation are nothing new. Last year, Australia’s chief scientist, Alan Finkel called for government regulation saying “What we need is an agreed standard and a clear signal, so we individual consumers don’t need expert knowledge to make ethical choices, and so that companies know from the outset how their AI is expected to behave.”

Finkel had proposed that companies could voluntarily apply for a government mark of endorsement for their AI, calling it the ‘Turing Certificate’. As part of his proposal, Independent auditors would test the AI developers’ code, business processes, and adherence to government compliance codes. His voluntary scheme was subsequently condemned by the Transport Workers Union (TWU) who have been actively pushing for direct regulatory intervention on AI. TWU secretary, Tony Sheldon labelled Finkel’s proposal as being inadequate for protecting Australians from the downsides of AI.

Australia’s Ethics Centre has also been developing an ethical framework that they say is applicable to any technology. In March this year, The University of Sydney is also to host an ethics of data science conference.

In New Zealand, similar calls to action around AI are also happening. The Artificial Intelligence: Shaping A future New Zealand report, released by the AI Forum in early 2018, concluded that New Zealand needs to proactively engage with AI ‘to shape a prosperous, inclusive and thriving future’.

The report says “…we either choose to proactively help shape its impact on our economy and society, or we passively let AI shape our future lives. To shape, or be shaped?”. As with Australian calls for debate and regulation, the report highlights the benefits of AI, saying that by 2035, AI could increase New Zealand’s GDP by up to NZ$54 billion.

In both countries AI has become something of a political football as articles debating the depth and breadth of the technology’s economic, social and political footprint become a common part of the media landscape.

Examples of this include a recent piece where analysts at Macquarie forecast that AI has potential to see Australia’s four major banks cutting up to 10,000 jobs each over the next decade, noting “We expect to see a significant reduction in administration, processing and low value-add activities and growth in IT functions… If banks are successful in digitalising and automating, we see scope to reduce FTEs by ~10k for each of the majors”.

A recent PWC study found New Zealand has the sixth-lowest share of jobs at high risk of automation thanks to the predominance of roles in difficult-to-automate industries within New Zealand, although 24 percent of Kiwi jobs will be at risk of automation by the mid-2030s.

While Australian unions such as the TWU have actively pushed for greater intervention with AI, citing the potential human costs and risks, the newly formed Australian group has adopted a pragmatic view and are advocating debate and regulation, saying that “Whilst there has been much debate, there has been little progress in how AI should be regulated.”

The letter posed several questions that the group says need urgent debate across topics including the impact of AI on Australia, the ethical and human rights challenges presented by AI, and ultimately whether Australia needs a governing body to set standards and guidelines for the ethical use of the technology.

The benefits and risk of AI are best summed up by Stephen Hawking, who was wary of the possible perils of AI right up until his death last year, stating that while “Success in creating AI would be the biggest event in human history. Unfortunately, it might also be the last, unless we learn how to avoid the risks.”

The group has so far not outlined any additional specifics but has said that they plan to hold an event tentatively called the Artificial Intelligence Forum, in February to “kick-start the creation of a charter and objectives for AI for Australia”.

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The BSA was tipped off by an unnamed informant who in turn received an AU$10,000 payout. The BSA says that the AU$160,000 settlement agreement is the largest paid out in 2018. Several other high value piracy settlements also got reported in Australia, with a Melbourne based architecture firm paying AU$33,936 and an interior design company paying AU$40,000.

In Australia, the BSA offers rewards of up to $20,000 for information involving unlawful copying or use of its members’ software.

“Rewarding informers has proved very successful.”

The prosecutions buck the global trend of declining software piracy. According to a recent report by the BSA, software piracy levels are declining globally. The BSA attributes this to both education and enforcement as well as an ‘increased understanding of the benefits of properly managing software assets’. According to the report, the worldwide unlicensed software rate declined two percentage points from 39 percent in 2015 to 37 percent in 2017.  While the BSA attribute some of the declines to a reduction in PC shipments, IDC (who co-authored the report) estimates 60 percent of the decrease was driven by increased software licencing compliance.

Similar high-profile software piracy cases are rare in New Zealand. The last major case was reported in 2012 when six Auckland companies supplied unlicensed Microsoft software to undercover investigators. Microsoft was understood to have received compensation to the tune of NZ$34,000.

Even though New Zealand is part of the Asia Pacific region (which along with eastern Europe has the highest rates of software piracy in the world), it continues to have one of the lowest rates of piracy, with only 16 percent of installed software in New Zealand estimated to be unlicensed. Australia follows closely at 18 percent.

The BSA says within Asia Pacific, unlicensed software has a commercial value of $16.4 billion. The region accounts for over a third of the commercial value of unlicensed software. China is one of the region’s biggest offenders, with $6.8 billion worth of unlicensed software. At present, the BSA has no operations in NZ.

Using informers to uncover piracy is not a new tactic for the BSA. They have been using Facebook advertising for several years. The adverts are designed to encourage people to report businesses using unlicensed software. If an informers information results in a successful prosecution, cash rewards are paid out.

While the prevailing response to the BSA’s Facebook campaign has been negative, the prosecution of several Australian companies does indicate that the approach is working. Jan Hlaváč, a spokesperson from the Czech branch of the BSA was recently quoted on Radio Prague saying that rewarding informers has proved ‘very successful’.

“We did it because we wanted to catch big fish. In the past, many informants did not want to disclose who they were, and it was difficult to set up serious communication with them. The only way out of this was to offer them something that would motivate them to fully cooperate.”

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Spark had proposed that Huawei 5G equipment gets used in their 5G Radio Access Network (RAN). The Director-General of the GCSB, who was notified as a requirement of the Telecommunications Interception Capability and Security Act (TICSA), said no, adding that the use of Huawei 5G equipment in the 5G RAN could pose significant ‘national security risks’.

The news represents a sizeable blow for Spark, who according to their 5G briefing paper, have been planning for 5G for a considerable amount of time.

Spark says 5G is expected to play a considerable role in New Zealand’s burgeoning digital economy.

“A less competitive environment could mean higher costs and a slower 5G roll out.”

“We expect the 5G network (covering multiple bands) will support multiple different services with widely divergent connectivity requirements. This will fundamentally change the economics of the digital business models that many industries have already identified as their future – but have yet been unable to economically realise. We expect it will allow them to push the bounds of those digital business models even further.”

Spark isn’t commenting further on the GCSB’s decision, but the telco and Huawei are said to be working with the government to understand the GCSB’s concerns and to find a way to navigate around the issues identified by the GCSB.

While media coverage was wall-to-wall, little has been said on what the GCSB’s decision could mean for consumers, businesses and the wider telco sector.

The biggest issue that could impact consumers and businesses says IDC telco analyst, Monica Collier, is likely to arise out of reduced competition.

“If one hardware vendor was no longer in the running at all, then the mobile network operators’ choices are reduced, and in a less competitive environment this could mean higher costs, which could equate to more of a slower, incremental roll out, or MNOs being more selective about which areas get 5G first,” Collier says.

There’s also a question mark over existing Huawei equipment already in use. Spark’s 4G infrastructure, Vodafone’s fixed cable networks in Christchurch, Wellington and the Kapiti Coast, plus 2Degrees 4G network, all use Huawei hardware, with the installations approved as part of TISCA requirements.

According to IDC’s Collier, it would ‘be a big decision to ask network providers to pull out existing Huawei gear. The cost to the network providers would be huge, and that cost would likely need to be passed on.’

However, Collier notes: “The difference with 5G is its distributed nature, with both core and edge processing, which the government expressed concerns that it says this configuration means every part of the network can be accessed.”

In reality the differing architectures between 5G and 4G means that legacy Huawei gear is unlikely to be affected by the GCSB’s decision.

So how real is the security threat? While there is little debate that limiting the number of equipment suppliers could stifle innovation and increase costs, government spooks have remained tight-lipped on the specifics of the security issues.

Andrew Little, Minister in charge of the Government Communications Security Bureau and New Zealand Security Intelligence Service, has so far refused to reveal any specifics of what the ‘significant national security risks’ posed by Huawei are, saying the information was classified. His explanations to date have been at best vague: “…conventional (4G) technology has an infrastructure core, and then peripheral technology such as cell-phone towers and the like and they can – in effect -– be kept separate, you cannot do that with 5G technology,”

Because the security issues raised are classified, it is all but impossible to comment on the validity of their claims. Riley T Reid, the Australian-based director of telecommunications security consultancy, Aitchison Reid says that the Huawei issue is a distraction and that existing security flaws could remain unresolved.

“I think the focus on Huawei is a distraction away from core security threats and risks that are latent in our networks by design due to the existence of SS7/Diameter. Replace Huawei with Nokia, and it doesn’t change the latent SS7/Diameter threats for Aotearoa at all.”

Reid’s comment refers to what is known as Signaling System No 7, or SS7. It is used to interconnect mobile phone networks and allows calls/ text messages between network operators. It also underpins international roaming. While the Diameter protocol replaced SS7, its backwards compatibility also means it has similar vulnerabilities.

Hackers who manage to access the SS7 system could in theory record or listen into calls. They could also read SMS messages sent between phones, as well as tracking the location of cell phones. In Germany last year, hackers exploited SS7 vulnerabilities to gain access to dual factor authentication codes and emptied bank accounts.

Reid says even if Spark and the GCSB resolve Huawei related security concerns, telcos could still find themselves vulnerable.

“Even if 5G achieved security for the users and devices connected to it, 4G/3G is not disappearing overnight, and 2G persists across the world too. So, a 5G device which allows its user (person or infrastructure) to also operate on 4G/3G/2G will still provide the means for an attack against that device over non-5G channels.”

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So it is refreshing when we see real use cases emerging that deliver genuine value, and attracting attention from serious industrial players. The more so when they come from a small Kiwi company with an ingenious idea which is introducing innovation to A/NZ retailers with the scale and presence of The Warehouse and Chemist Warehouse.

Kiwi start-up, Insite AI, has developed a solution that uses machine learning’s ability to rapidly process and analyse data to give retailers recommendations for stock purchasing and merchandising. Doing so helps them tweak what is available for shoppers as well as improving how products get priced and promoted.

“Tests showed using AI to fine-tune supply chain management by one percent delivered an impressive seven to ten figure increase on revenue.”

For retailers, the technology has the potential to sharpen their competitive edge in the cut-throat online retail space. Because of this, Insite AI’s technology has earned votes of confidence on both sides of the Tasman. New Zealand’s largest retailer, the Warehouse Group is already deploying it to enhance stock procurement and to help make the shopping experience as smooth as possible for shoppers, while in Australia, the Chemist Warehouse is now also a user of the offering.

The move should, in theory, allow both retailers to better address a key industry pain point by being able to predict customer trends better and adjust stock quantities. By doing so, customers are less likely to find their favourite items are out of stock and, equally importantly, retailers are also far less likely to be stuck with inventory that is not selling.

According to Insite AI, research and historical tests showed that optimisation using AI to fine-tune supply chain management by one percent delivered an impressive seven to ten figure increase on revenue – this does, however, vary depending on the size and sophistication of the retailer.

With margins tightening and competition intensifying as large online retailers from the US and China continue to make in-roads into the New Zealand market, optimising merchandising and stock procurement is a competitive necessity for retailers.

Offering enterprise AI using a software-as-a-service model, the company has big ambitions and is seeking to equip the world’s biggest retailers with their technology. With the retail sector bringing in US$25 trillion a year globally, the potential is significant as the company looks to expand into Asian, European and the US markets.

In fact, the potential is compelling enough that the Red Shed is doubling down on AI and has agreed to host the retail AI Centre of Excellence that Insite AI wants to launch in New Zealand.

Interestingly, the company has emerged from a group of angel investors spending their own money on their own gig – something of a rarity. The development has been led by Goat Ventures (who declare they also employ the most significant number of AI-related PhDs in New Zealand). Goat Ventures are betting big on AI and have a legal AI joint venture already in place with the law firm MinterEllisonRuddWatts.

Insite AI launched after Goat Ventures went looking for an AI company that provided retail-centric solutions but were unable to find any suitable candidates. Since then, the company has raised $2 million in pre-seed capital from the New Zealand Venture Investment Fund and philanthropist Sir David Levene.

It currently employs 11 staff who service customers throughout Australasia. PwC Australia is the exclusive distributor of Insite AI in both Australia and New Zealand.

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It’s technology that TIBCO is claiming is a world first, although /others might argue that live time series data with fuzzy search logic is nothing new.

Spotfire X allows users to analyse data as it gets generated in what TIBCO is pitching as a best-of-breed solution that makes use of and merges TIBCO’s real-time infrastructure and Spotfire’s dynamic data analysis capabilities.

“While AI is not replacing BI, BI tools that infuse AI functionality will displace those that don’t.”

The offering represents a new direction for the vendor as it ventures beyond middleware to leverage its investment in data science platform acquisitions, including Statistica and Spotfire – the latter now over a decade ago.

The new platform incorporates AI and machine learning capabilities and also has what TIBCO calls ‘A(X) Experience’, allowing users to type in plain English requests to navigate and visualise data using natural language processing. It also will natively stream data in real time from dozens of sources.

Brad Hopper, TIBCO vice president of strategy, says those capabilities have the potential to transform how business insights get generated and discovered.

“This will allow us to take a complete novice off the street, put them in front of the tool, and no matter what they will get something back”.

Spotfire has long been well regarded by business intelligence users owing to the interactivity of its data visualisation capabilities. Dashboards use sliders to change parameters applying to on-screen graphics dynamically.

The move aligns well with the growth in the numbers of citizen data scientists. With self-service analytics growing, platforms such as Spotfire X are designed to be easier to use and more automatic through the use of AI and machine learning.

It’s also a timely move for TIBCO as competitors move to smarter analytics tools. Competitor Tableau acquired AI start-up Empirical Systems in a move aimed at giving it more intelligent and more advanced predictive analytics capabilities. Self-service analytics vendor, Qlik, meanwhile, acquired Podium Data in a bid to bolster automation capabilities and to make its offerings more straightforward to use.

Natural language capabilities in the new product provide a useful way for non-data scientists to initiate a question and have Spotfire generate statistically meaningful and useful insights. The objective is to enable business owners and those unfamiliar with analytics to gain faster access to market insights which could, in turn, speed up business decisions and provide businesses with a competitive edge.

Spotfire X will help enterprises operate smarter on a more agile basis Hopper says. “We have made a major leap forward by further simplifying the practice and increasing the power of exploring data. Business users just getting started can make important discoveries, and experienced analysts can get their results even faster.”

Hopper says it will help companies become more agile and get more return from their investments in people and data.

According to Hopper, AI figures strongly. “We’ve built in a fairly sophisticated machine learning model behind the scenes,” he says.

It makes use of AI to index data and suggest relationships between pieces of data. Part of the intuitive design of the offering is that users entering queries gain access to a list of visualisation recommendations, starting with ‘classical recommendations’ and a ranked list of variations on their questions.

The rise of AI in business analytics has led to some speculation that AI could eventually take over BI. Forrester analyst Boris Evelson disagrees but believes that AI enhanced BI tools will eventually supplant non-AI equipped BI apps.

“While AI is not replacing BI, BI tools that infuse AI functionality will displace the tools that don’t,” Evelson says.

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