DirectionIT Magazine Issue 6

WW W .D KL .COM

SE PT E M B E R 20 17

Cont nte 2

W W W .D K L .COM

ent ents Weapons of Mass Deception: Social Media and its role in the war on the global social landscape

P.6

The future of retail sucks … or does it?

P.12

Proactively defending against cyberattacks. Or, how to speak Russian in 10 easy steps

P.20

It’s starting to feel like we live in the future

P.26

Powerhouse & Prosperity: IBM’s New Mainframe System – The Datacenter Innovation Driver

P.32

3

4

W W W .D K L .COM

Letter from the Editor

Every quarter, we try to spotlight technology that affects our businesses and our jobs in ways that we never once thought possible. But on occasion, it’s necessary to take a step back, to regroup, refocus, and realize that our businesses and our work lives are blurring with our personal lives with one single common thread connecting us all—data.

Now, as we all know the terms Big Data, Data Analytics, and more, inundate the proverbial airwaves almost continuously. But for all the industry jargon and buzzwords, there’s an underlying reality that we must all embrace: data has come to quantify every aspect of our lives in almost every way. And with that data comes a new form of innovation—one that drives us to connect like never before. Innovation that makes our lives easier, that connects us to others and to other ideas, and that moves us through life with a speed and precision many never thought possible.

So, because of this we bring you the Innovation issue of DirectionIT Magazine. This issue covers a variety of topics far beyond what we have covered before. From insight into social media and the battle between truth and fake news, to the wonderment of highly personalized customer engagement, to the more frightening aspects of IT security and how we must learn to protect our valuable assets, and ourselves.

In all cases, innovation continues to drive us to new heights, and new possibilities—all of which create a vision of the future, rich with possibility. So, as always, enjoy the read as much as we did researching the next wave of innovation.

Allan Zander Editor-in-Chief

5

6

W W W .D K L .COM

SOCIAL MEDIA AND ITS ROLE IN THE WAR ON THE GLOBAL SOCIAL LANDSCAPE

By Jason Norman, Managing Director, Attego ESG Impact Solutions

7

It’s an odd world we live in—one where people view the world through a mobile device, a lens that has created a new landscape where official news, news stations, newspapers, and the like, have been replaced by instantaneous information free from vetting, researching, and journalistic standards that were once the foundation of our decision-making processes.

Now, our global society lives by the minute, with opinions based on character counts, images without references, and lives so connected that we seem to have discarded common sense and in-depth research when reading the latest Tweets of the minute. This era has brought us fake news, media manipulation, and trial by social media that has led to the demise of the largest corporations and other business organizations.

How do we combat this new era of opinion over fact? Like any war, we need to first look at the enemy—in this case, the digital landscape and how information is disseminated.

The most recent statistics show that we currently connect globally via a virtual cornucopia of social platforms—all of which bleed and feed into the ecosystem of opinion and manipulation—both foreign and domestic. For instance, here are a few numbers to put things into perspective as to how connected we all really are: currently Twitter has 328 million monthly users, LinkedIn has 500 million users, Instagram has 700 million monthly users, and Facebook has 2 billion monthly users.

So where do we set our sights when it seems that for every organization there is a dystopian world of social media to combat and control? As our environment is connected globally through social platforms, we have the greatest weapon to combat fake news and non-factual opinions—data.

With big data and its resulting business intelligence (BI), the ability to monitor, report, analyze, and manage social media is now a reality. For all types of companies, social intelligence can deliver a plethora of business intelligence, including the real-time monitoring of conversations regarding assets, operations, and the company.

By implementing a social intelligence practice, companies can understand who stakeholders are, understand the network of influencers and the role each plays regarding communication around the organization, obtain alerts to crises as early as possible, and more. These factors can then be used to provide defensive measures against falsehoods, miscommunications, and even activists—all of which lead to better company perception, alignment between shareholders and key stakeholders, and ongoing strategic objectives. After all, being the credible source of facts that are supported by data is a critical step in enabling a company to define the story, rather than being defined by it.

So, to answer the question, is Twitter (and all social media) a weapon of mass deception? If not monitored, measured, and managed, it absolutely is a weapon. But when managed properly, the devastating side of social media can be transformed into the greatest and most powerful ally—one used for good, and not evil.

Through social media monitoring, organizations can now peer into the heart of the social media universe and see firsthand what is being discussed, by whom, and how it could impact either positively or negatively on the organization as a whole. With access to data that resides within the social media ecosphere, organizations now have the ability to enact their own controls through better communications and data points, virtually shutting down fake news by becoming the keeper of real records: the truth and the data to support that truth.

8

W W W .D K L .COM

*As a division of RTI International—a world-renowned scientific research institute—Attego has created altumINSIGHT, a platform that enables in-depth social and web monitoring intelligence for large corporations.

9

The future of retail sucks…

12

W W W .D K L .COM

By Andrew Armstrong

Chief Customer Officer, omNovos Omni-Channel Customer Engagement Solutions

13

In today’s retail landscape, multiple factors are placing increased pressure on retailers—meeting goals pertaining to the bottom line is becoming exceedingly difficult as technology paired with multi-channel shopping options continues to dominate the landscape.

With the proliferation of online shopping options, consumers are driven by instant gratification—that, along with price comparatives never before seen in the retail world, has created a new paradigm that is negatively impacting bricks-and-mortar retail stores. Combine that with new highly advanced customer engagement tools, and those who are behind the curve will be left to experience a slow and painful demise in the wake of a new omni-channel driven world.

To put things into perspective as to how online shopping is impacting retailers, a recent study has shown that online retail sales continue to grow—estimated to reach 8.8% of total retail spend in 2018, compared to 7.4% in 2016. Furthermore, online sales in the United States are expected to reach $523 billion in the next five years, up 56% from $335 billion in 2015.

According to Forrester Research, mobile devices are expected to be a key driver in online sales growth.

The report entitled U.S. Cross-Channel Retail Forecast 2015 to 2020, has predicted online sales to grow by an average annual rate of 9.32% over the next five years.

However, that is just one-third of the trifecta that continues to impact retailers. Aside from the staggering numbers surrounding online e-commerce, there is also the ever-vigilant fight for mobile phone app adoption.

Outside of the traditional online browser-based e-store scenarios, comes the next generation of instant gratification in the form of in-app personalization. By persuading consumers to download in-store apps directly on their smart device, retailers can capture information never seen before. Furthermore, it also gives retailers the opportunity to push customized campaigns and offers directly to individuals outside their normal online buying interactions—meaning that historically offers could only be made when a consumer logged into an online shopping site.

Now, with the always-on app, retailers can track locations, push notifications of offers, and more, 24/7/365, all based on exact preferences created by the consumer. And, to illustrate the importance of in-app customer engagement, one must look at the percentage of users versus the revenue generated.

For instance, by the end of 2017 in-app purchase revenue is set to be the number one source of mobile app revenue—accounting for 48.2% of earnings compared to 14% from ads-based revenue, and 37.8% from paid app downloads.

14

W W W .D K L .COM

Now, knowing that only a small number of consumers are embracing in-app purchasing today—the numbers sit at just over 5% of all app users currently spending money on in-app purchases. However, the amount of dollars spent is staggering in comparison: in-app customers spend twenty times the amount of other shopping trends. And by the end of 2017, the total amount realized on global sales from in-app purchases is projected to be $37 billion. In fact, by the end of this year alone, in-app purchase revenue is set to be the number one source of mobile app revenue, accounting for 48.2% of earnings.

It is this cross-pollination of online and in-app consumer habits that is driving retailers to consider a new approach to customer engagement. Nevertheless, this still does not take into consideration the want and need for traditional bricks-and-mortar sales. Though sales have continued to drop over the past decade, consumers still gravitate towards the traditional shopping experience—however, with the technological changes surrounding consumer habits, even the in-store customer engagement strategies must change to meet the new world order. A recent study showed that 65% of online shoppers still preferred buying from physical outlets if given the choice.

Now, in traditional terms, in the past in-store staff would address potential customers with the usual “Is there anything I can help you with” greeting. However, with modern marketing practices and the associated personalization functionality that accompanies it, consumers are not only okay with being marketed to, they expect it. Furthermore, they expect far greater detail and personalization in their marketing—meaning engagement must be all about them.

It is this influence of online and in-app personalization that is now beginning to affect consumers’ attitudes when in physical stores. Customers are no longer truly satisfied with traditional approaches to a sales engagement—they want to be treated as individuals and have their specific needs addressed.

So, what is the solution? If customer engagement is to be successful, retailers must break down the divisive barriers of multi-channel sales and marketing efforts and amalgamate the trifecta of online, in-app, and in-store to create a more seamless environment that caters to all aspects of a consumer’s wants and needs. To do this, retailers must fully embrace omni-channel customer engagement solutions. But, like any modern business problem, the question becomes “how”?

15

CONVERTING MULTI-CHANNEL TO OMNI-CHANNEL TO INCREASE CUSTOMER ENGAGEMENT Welcome to the three-stage process to address the three main buying vehicles:

STAGE 1 DATA OPTIMIZATION In today’s modern age, data has become the single most important factor when addressing customer engagement. After all, it is the data captured online, in-app, in-store that will ultimately enable retailers to custom tailor their offerings in all instances while continually learning about the customer to create progressive and predictive profile modeling.

To accomplish this, a retailer’s data must be managed in such a way that it embraces the concept of Single-User-Profile. This means the profile that a person uses online, in-app, or in-store for any purchase activity is the same across all platforms. This enables the retailer to know more about the customer, their buying habits, and so on. Simply put, if customers have a different profile associated with their rewards card than their online account, the retailer has systematically failed to create a single-user-profile for each customer.

16

W W W .D K L .COM

STAGE 2 DATA AUTOMATION Data automation is the engine that is fueled by the single-user-profile, giving the retailer the ability to fully customize offers and marketing materials directly to an individual customer—ensuring far higher ROI and engagement.

And though marketing automation can be a cumbersome task to some, finding a partner who specializes in the inner workings of business process management and automation will make the transition far less painless than anticipated.

STAGE 3 OMNI-CHANNEL CUSTOMER ENGAGEMENT DELIVERY Like any modern marketing practice, nothing works until you engage with the customer. It is this stage of omni-channel that becomes a highly important medium—the interactive delivery of customized offers through whatever medium that the customer wishes. And, as discussed, this becomes again the trifecta of engagement, ensuring that whether the customer is online, in-app, or in-store that all interaction is constant and highly customized based on their single-user-profile information. This can be done through multiple applications and all connected to the data and automation layers for seamless delivery—making the online, in-app, and in-store experiences blend perfectly, every time.

In all, welcome to the new world of omni-channel customer engagement.

17

OR

By Paul Hogg CEO, Inteleca IT Business Solutions

20

W W W .D K L .COM

2 1

Living in Atlanta, there has always been peace of mind that comes from the pleasantries of suburbia: kids play in the parks, the flowers bloom, and neighbors wave to one another in a utopia-like manner reminiscent of an episode of Leave it to Beaver.

However, with the barrage of news regarding cyberattacks that suburban utopia-like feeling has changed. It’s now an ever-looming fear consistent with something more akin to a Rutger Hauer paired with dreams of a post-apocalyptic wasteland. Seriously, should I be welding caged windows and spikes to my minivan?

Jokes aside, the point is that cyberattacks are no laughing matter. We must fight our natural urge to live in our own bubbles and to realize that this threat is all too real, and all too present to ignore.

As I’m sure everyone now knows, the recent attacks in the Ukraine had a devastating effect across the country. For just a quick list of those hit, the cyberattack crippled banks, government offices, the postal service, airports, media organizations, and even the power grid. And, it hit so hard and so fast that the people of Ukraine were left in shock as to the cause and the outcome.

To be clear, though the tone of this article may be read by some as alarmist, my retort is simple: Good! This is meant to be alarmist because this is serious stuff that can adversely affect us all.

But there is a simple way to combat all this: as an IT community let’s stop being reactionary. Now, I know what many will say to that statement. The argument will be made that security is already in place: malware detection, firewalls, etc. But, in all honesty, I will happily argue that viewpoint.

For many IT organizations, the security practices in place are those that addressed a world long gone—practices that were formed in a different era, with a different approach, and a different mindset—and solutions were implemented for the threats of the time, not the threats of today.

22

W W W .D K L .COM

And as an IT business solutions company that does this all day, everyday, trust me when I say that you’d cringe to see the things we see when peering under the hood of very large companies.

So, what’s to be done? Firstly, understand the new world of cyberattacks and the associated risks. For instance, this latest attack is now believed to be far beyond that of the usual “looking for money” cyber heist. In fact, leading IT security professionals from the international Computer Science Institute in Berkley, California, have a far scarier outlook on this incident. They have reported that it’s far more likely a sophisticated attack disguised as ransomware—something that was perpetrated by a much more sophisticated hacker. And though this may or may not be driven at a nation-state level, it’s not the usual kid in a hoody in mom’s basement from some 1990s hacker movie.

At the end of the day, my message is simple: contact a specialist to discuss your security right away. I say this because there is a new world that has landed squarely in all our laps that we need to address and internalize now … not later.

The DDoS attacks in late 2016, the WannaCry ransomware attacks, and now the attacks this week all predict that there is something bigger on the horizon. This is why you need to partner with the world’s leading authorities on cyber security, business continuity, and robust IT infrastructure to build an effective defense for your organization.

I don’t want to come across as panicked or alarmist. Or perhaps, to some, a conspiracy theorist wearing a tinfoil hat—this is not what this is about. This is about being smart, prepared, and vigilant. It’s about not experiencing what others are experiencing.

And remember folks, just because you’re a little paranoid doesn’t mean they aren’t still after you.

2 3

Freak Blue Cruiser Flying carrousel-tourbillon 7-day power reserve Silicium technology T. 561.988.8600 ulysse-nardin.com

TH E E TE RNAL MOVE ME NT Ulysse Nardin, from the movement of the sea to the perpetual innovation of Haute Horlogerie. For over 170 years, the powerful movement of the ocean has inspired Ulysse Nardin in its singular quest: to push back the limits of mechanical watchmaking, time and time again.

26

W W W .D K L .COM

By Paul Martin, President & CEO, APX Building + Onsite Data Solutions

2 7

We live in crazy times—the understatement of the year if I was referring to global politics—but politics aside, I’m referring to technology. It appears as though with every coming day new technology is being introduced: gadgets, apps, and connectivity that make our lives better, faster, more enjoyable, easier, and so on.

That said, the evolution of technology seems to be a real-time study and living example of the famed Moore’s Law: an observation made by Intel co-founder Gordon Moore in 1965. Simply put, the number of transistors per square inch on integrated circuits had doubled every year since their invention. It’s because of this observation that Moore's Law seems to be spot on as it perfectly predicted that this trend would continue into the foreseeable future. Well, here’s the future.

So, how does this real-time, exponential evolution affect us all? It comes down to human nature and how we all connect with, embrace, and internalize technology. For instance, in the past four decades our lives have changed faster than any other generation before us. I think back to my days as a child, I loved playing with cardboard boxes and a Slinky—the lowest of technology.

Jump forward just a few years and my children are playing with the desktop computer. Now, I see children seemingly taking their first steps with a tablet in their hands—meaning that technology and its inherent interfaces become part of their psyche—creating the ability to learn about technology throughout all stages of their lives. Just imagine, the next generation will never feel our pain of “teaching the internet” to our parents.

So, with the evolution of technology paired with the evolution of the human condition as it pertains to technology, the once prophesied vision of the future has today become a reality.

Today, we see the benefits of everything from data-driven applications, learning algorithms, and even artificial intelligence—making everything around us “smart.” And that intelligence has delivered a new environment, one that speaks to us through our devices and that interacts with us through a network constantly delivering new and better experiences. In fact, it’s spawned an entirely new term: Smart Cities.

28

W W W .D K L .COM

The concept of the smart city is not that hard to understand. It simply means that by using technology to our advantage, we create better, easier interactions that streamline our daily routines. For instance, most metropolitan centers now have apps for parking—long gone are the days of frantically running back to your car with quarters in hand only to find a ticket. Now, with a press of a button your parking is updated and a fine avoided. A small example, but an important step towards embracing the evolution of technology.

Now, why do apps like that instantly work for people? It’s because of their own technological evolution.

We have grown up—at least for the last few years—with mobile apps. The interfaces, user experiences, the creation of iconography that represents functionality has all become commonplace. This means that as more apps are introduced, our ability to use them increases every day due to familiarity.

So, imagine the ingrained knowledge of mobile applications and how that impacts other industries within the smart city realm. Far beyond that of the average pedestrian using apps to pay for parking or to rent bicycles, the people who work to build, support, and protect us and our cities have a new realm of technology at their fingertips—all familiar in form and function as the apps they use daily in their personal lives.

Imagine firefighters and EMS personnel armed with smart phones that capture and deliver building and onsite data in real time. Gone are the days of not knowing where exactly a building is, what it’s made of, what it stores inside, and so on. Now, as they speed to save our lives, their lives are better protected, as are ours, through comprehensive data and the power of knowledge.

Furthermore, imagine that same technology in the hands of our police and military—real-time insight at their fingertips when dealing with calls of any nature whether domestic or foreign. Having data that shows where entrances, exits, electrical panels, gas mains, even what walls are made of, suddenly changes the dynamic between the good guys and the bad guys. And, as they say, pictures are worth a thousand words—all users of this type of technology can now leverage the visual benefits, seeing firsthand details never before possible through just the written word.

And, of course, there are all the applications that exist outside the emergency-driven world. Now everyone from building inspectors, to HVAC companies, engineers, builders, building owners, and more, can all capture data and share it with those who need to action it. It means faster and more accurate response times for building related issues, reduced costs, and far better end-customer experiences.

It’s this new inter-connected world that creates an environment whereby smart city data makes all our lives better: spanning the spectrum from reducing the daily frustrations of traffic and parking, to saving lives during extreme and dangerous operations.

Welcome to our new future.

2 9

PRODUCT SPOTLIGHT

POWERHOUSE & PROSPERITY

IBM’S NEW MAINFRAME SYSTEM IS A DATACENTER INNOVATION DRIVER

BY ALAN RADDING, RESEARCH DIRECTOR, THE INDEPENDENT ASSESSMENT GROUP

Concerns of cyber-attacks raising questions over blockchain security, and the perceived high cost of mainframe computing, have combined to slow innovation within the biggest banks, insurers, and financial institutions—particularly in the US and Europe. While not the only sources of friction in the development departments of large IT organizations with mainframe datacenters, they are significant and they need to be addressed.

There is some good news. IBM recently announced its newest mainframe: the z14 or the IBM Z. Not only is it the most powerful commercial computer available to businesses, it is also a marvel of innovation in and of itself—IBM Z enables IT organizations to innovate in ways that had never been possible. Among the most important aspects of the new machine are pervasive encryption and flexible pricing— these directly address some of the biggest roadblocks to innovation.

32

W W W .D K L .COM

3 3

PERVASIVE ENCRYPTION

For starters, the new machine is designed with a 4-fold increase in the silicon area allocated to cryptographic operations to allow pervasive data encryption, which means encrypting all your data automatically from the outset. That may be quite an advantage if your team currently spends inordinate amounts of time and resources deciding what to encrypt and when. Of course, they usually do it just before the auditors arrive and, with luck, the auditors will find safely encrypted selected data. And even that is not always the case with most companies. With the new IBM Z all your data is always protected. You will never have to sweat another data security compliance audit.

With so much processing power devoted to encryption on the new mainframe, your team can dispense completely with the headaches of encryption, data protection, and compliance. The machine simply encrypts everything: all data associated with an entire application, cloud service, and database, in transit and at rest, automatically, as IBM explains it. This amounts to bulk encryption at cloud scale made possible by a massive 7x increase in cryptographic performance. Suddenly, your IT team can eliminate the entire run-around over data protection compliance and put that time to productive use doing work that generates revenue or satisfies customers, not appeasing auditors.

“The vast majority of stolen or leaked data today is in the open and easy to use because encryption has been very difficult and expensive to do at scale,” said Ross Mauri, General Manager, IBM Z. “We created a data protection engine for the cloud era to have a significant and immediate impact on global data security.” It eliminates the costly, risky, and inconsistent security compliance fire drill most companies go through today.

Meanwhile, all your data remains protected from hackers, thieves, corporate spies—anyone who might want to steal, destroy, compromise, or otherwise harm and hinder your business. By the way, the average cost of a data breach in 2016 was $4M. Pervasive encryption eliminates any chance of incurring a cost like that. Even if the bad guys get to your data, encryption renders it unintelligible to them.

Now sheltered by a dramatically expanded protective cryptographic umbrella of the world’s most advanced automatic encryption technology and key protection, you can do things in terms of digital business that were not previously possible. The system’s advanced cryptographic capability now extends across any data, networks, external devices, or entire applications—such as the IBM Cloud Blockchain service—with no application changes and no impact on business service level agreements.

That enables you to ensure accountability throughout your supply chain; redirect resources previously spent on traditional encryption to new projects, such as competitive new digital business initiatives; or redeploy your IT assets in new compelling ways, such as through the efficient deployment of flexible, secure virtual containers.

ENCRYPTED APIs

34

The big buzz in the C-suite these days is digital business.

It originated from cloud-native upstarts—companies that started as cloud-based operations only, like Uber—and are now disrupting long established businesses, possibly your own. The key to success as a digital business is agility: the ability to change systems fast in response to customers and changes in the marketplace.

W W W .D K L .COM

IBM’s new mainframe speeds the shift to digital business by making it easy for cloud developers to discover and call any mainframe application or data from a cloud service, or for mainframe developers to call any cloud service.

They can do this securely since the machine automatically encrypts these interfaces, which IBM describes as the digital glue that links these services, applications, and systems. And it does so nearly 3x faster than alternatives.

Success in digital business requires speed. Now that you have the secure speed just add innovative digital business ideas that will disrupt your competitors or open entirely new revenue streams.

FLEXIBLE PRICING

IBM also announced three groundbreaking pricing models for the new mainframe. These enable you to leverage greatly simplified software pricing that combines flexible deployment with competitive economics versus public clouds and on-premises rivals. Finally, you have a way to compete with these lean or cloud-native competitors and win if you are sufficiently innovative. Yes, you still have to be innovative—the machine won’t do that for you yet, although it is loaded with capabilities to support cognitive workloads.

New micro-services offer subsets of application functionality, and applications that enable companies to maximize the value from security-rich on-premises enterprise systems in real time. This is crucial to successful digital business. Companies can now colocate applications to optimize qualities of services that, via the mainframe’s new pricing options, can be priced competitively against both public cloud and on-premises rivals. You just need to figure out which functionality to extract from your current systems—that is where innovation comes in—and bundle them as competitively priced micro-services.

Finally, IBM will institute payment pricing based on the business metric of the payment volume actually processed, not the traditional capacity available. As IBM notes, this gives mainframe users much greater flexibility to innovate affordably in a competitive environment, particularly in the fast-growing Instant payment segment. In effect, you may be charged mere fractions of a cent per transaction. Given the fact that mainframes account for 68% of production workloads that could give an organization running the latest mainframe a significant cost advantage over typical distributed systems.

These pricing options are designed to give mainframebased organizations like yours the predictability and transparency required to compete for digital revenue.

The pricing models are scalable both within and across logical systems and deliver greatly enhanced metering, capping, and billing capabilities. In short, pricing will no longer handcuff mainframe shops from pursuing competitive innovations.

Combine the new mainframe’s pervasive encryption to secure all data automatically while eliminating the burden and overhead of data security compliance with the flexibility and competitive pricing of your digital business strategy.

The mainframe—especially the new IBM Z—can provide a very compelling innovation platform, and cam help to either capture or restore your competitive advantage.

Another pricing innovation of the new mainframe revolves around how the machine handles code running for application development and testing. Now your best innovators can pursue application development and testing with the freedom to triple capacity of all development environments on the new mainframe to support your DevOps tooling and processes without incurring surprise charges. In effect, organizations can triple capacity with no increase in monthly license charges, which otherwise could run hundreds of thousands of dollars.

3 5

WW W .D KL .COM

38

W W W .D K L .COM

SE PT E MB E R 20 17