Sunday, September 15, 2013

#NSAPickupLines—I'd Wiretap That

Did he know a little too much about you on the first date? You might have to start vetting future admirers for, er, NSA employment. The Wall Street Journal recently reported that employees of the National Security Agency, which was accused of collecting private user information from social networks and Internet providers, kept their love interests under surveillance. After that romance-charged breaking news hit the Internet, #NSAPickupLines and the slightly more romantic #NSALovePoems hashtags began trending on Twitter and Tumblr. Even intelligence officers do crazy things in the name of love.

Say Hello To Beam, The Robot That's Almost As Good As A Hologram

My body is sitting in my office in Arlington, Virginia. But at the same time, I am also standing in a conference room in Palo Alto, California. I’m test-driving Beam, a remote-control robot avatar that gives me a physical presence in two places at once. Thanks to a 17-inch screen and a six-microphone array, I can be seen and heard face-to-face. I can even use my keypad to “walk” around the room to interact with other people—without undergoing a cross-country plane ride. Beam was originally developed by San Francisco Bay Area robotics studio Willow Garage. Impressed by its growing potential, founder Scott Hassan spun off an entire new company, Suitable Technologies, exclusively to focus on Beam. A year later, as Willow Garage's other projects seem to be foundering, Hassan has retained a significant number of Willow Garage employees to work on Beam. My view while using Beam.
“Reasoning With A Moron” Scott Hassan describes himself as a very optimistic person who is constantly viewing problems as far easier to solve than they are. It’s this attitude that brought him success as a programmer who helped Google in its earliest stages as a research project at Stanford University. But as the founder of Willow Garage, it only brought him disappointment as he quickly learned the limitations of modern robotics. Everything that was easy for a human to accomplish, it seemed, was near-impossible for its personal robotics model, the PR2. “The amount of effort it takes for the PR2 to just pick up a cup requires an unbelievable amount of complication," says Hassan. "It’s hard to comprehend how something so easy a two-year-old can do it can require the whole team’s effort and then barely make it work. It’s not like reasoning with a two-year-old, it’s like reasoning with a moron.” It’s no wonder that Hassan began to focus on Beam, a Willow Garage project that he spun off into its own company, Suitable Technologies, two years ago. Beam faces very few of the same problems thanks to human intelligence. Where PR2 sees windows as entryways and mirrors as terrifying enigmas—“If you ever face a robot invasion, all you need to do is get some mirrors,” Hassan jokes—the human-controlled Beam knows better. Hassan still believes in personal robotics, and said he expects robots to be in our homes within the next five to ten years. But for now, Beam holds the most promise, and Hassan wants to give it every opportunity to succeed. “I think Beam is a very viable product that needs more resources and team members to make it into something widespread,” he said. Bye, Robot But when he moved the majority of Willow Garage employees over to Suitable Technologies this month, something had to give. And that turned out to be the PR2. Read more: Why We’ll Have Robots In The Workplace Before Robots At Home While most Willow Garage employees transition over (Hassan could not yet give me an exact number), a team will stay behind to support the 50 PR2s that exist in research labs around the world, continue to build the rest that are in progress, and sell the rest of Willow's stock. If you’ve got $450,000 lying around, perhaps you can snag one. “The PR2 was never designed to be mass marketed,” said Hassan. “We knew we were going to stop making them at a certain point. But the ideas we came up with along the way were the follow-up market product would be. My vision is that Beam is that.” Hassan hopes that Willow Garage employees’ experience working on the PR2 will lead to dramatic technical advances to Beam. His next goal is to have Beam users be able to interact with their remote environments through remote-control hands and arms. The sun may be setting on Willow Garage and its most impressive personal robot, but Hassan’s vision of personal robotics is alive and well. “Beam is the gateway to personal robotics,” he said. “It’s a very simple application allowing you to be somewhere else. Now Willow Garage is bringing us all the expertise and manpower we need to make that happen.” The Future Of Beam At $16,000, Beam is the most expensive remote-presence system that currently exists. But it’s also arguably the most sophisticated, with an extensive speaker and video array. Hassan said that this iteration of Beam is not designed to be affordable for users because it’s not intended for the consumer market. “For the consumer market it seems expensive,” Hassan said. “But it’s not an expensive enterprise product. Our enterprise customers aren’t worried about the price. Instead, they’re impressed by what it can do.” However, Hassan said interacting with his kids while away on business has opened up new use cases for Beam: Eating dinner with them via Beam. Getting them ready in the morning through nothing but Beam’s voice commands. Giving them rides around the house on Beam’s sturdy, 100-pound base. “My seven-year-old daughter always gives Beam a hug when she sees my face appear on the screen,” he said. “I don’t know if she realizes this isn’t the norm.” While most parents couldn’t afford the current Beam, Hassan said he’s now planning on making more affordable Beams for the home. The long term strategy is to have low-end, mid-range, and high-end Beams for sale to different markets. Substituting For The "Meat Body" Wheeling my way through Suitable Technologies’ production floor, I can certainly see the appeal that convinced companies like IBM, Hewlett-Packard, Intel, and Google to purchase their own Beams. As I walk and talk with Greg Hamilton, Suitable's enterprise accounts manager, there are very few cues that remind me I’m not there in person. At 5’3” and 100 lbs., Beam is just a bit taller and lighter than my actual body. And thanks to arrow key navigation, it only takes a bit more concentration than normal to walk around. “I bet if you later came here with your meat body, as we call it, you’d remember how to get around,” he said. Hassan predicts Beam will change the way we work, live, and travel in less than a decade. Hundreds of customers have taken Hassan’s optimistic pitch at face value. And after trying Beam out myself, this optimism is infectious.

What Microsoft Didn’t Buy

Nokia will continue to be a company outside of Microsoft and will retain rights to its brand and management thereof. If Microsoft were to buy all of Nokia, the acquisition cost would have been more than double what Microsoft paid for the devices side of the business and included many aspects of which Microsoft would wants no part. Eventually, Microsoft would eventually have to sell off those unwanted Nokia parts piecemeal. In this—better—arrangement, Microsoft will be able to license the Nokia brand for existing devices. The HERE Maps team will stay with Nokia. HERE Maps is a subsidiary of Nokia that employs about 6,000 people. Nokia will make HERE Maps available to Windows Phones and feature phones as part of a four-year license that Microsoft will pay for separately. This preserves a revenue stream for Nokia and also allows Nokia to sell HERE Maps and services to other companies. Microsoft didn’t acquire Nokia’s entire patent portfolio, either. It bought the design patents outright but will license Nokia’s 30,000 utility patents patents for 10 years. By not acquiring the entirety of Nokia’s patents, Microsoft was able to keep the acquisition cost of the Devices and Services down while preserving future assets for Nokia.

What Microsoft Actually Bought

Officially, Microsoft is buying Nokia’s “Devices and Services” business unit. That simple designation is the whole hog: everything from manufacturing and distribution, design, operations, sales and marketing teams and related support. That business unit comprises of approximately 32,000 people that will become Microsoft employees when the deal officially closes. More specifically, Microsoft is buying Nokia’s Smart Devices unit. This includes the Lumia brand of smartphones running the Windows Phone operating system. Nokia shipped 7.4 million Lumia smartphones in the second quarter of 2013. The Smart Devices unit includes the manufacturing and design of the Lumia line along with the distribution, sales and marketing teams. Microsoft didn’t just buy the Lumia brand, it bought the people that actually put it together. This is extremely important for Microsoft because it could not possibly think to create its own manufacturing processes and supply chain on its own and hope to make a significant dent as a “devices” company any time soon. In this case, the processes that Microsoft is getting from Nokia are as important as the resources (the sales and revenue of Nokia phones). Nokia’s Mobile Phones business unit is also part of the deal. This is Nokia’s still robust (but shrinking) feature phone business and includes Nokia’s Asha line of cellphones. Nokia’s feature phone business sold 53.7 million units in the second quarter, second to Samsung worldwide.
Nokia Lumia 920 Microsoft could have done without the feature phones business unit of Nokia. Yet, to buy the manufacturing processes of Nokia, it had to take the feature phone and Asha units along with the smart devices unit. Microsoft sees the feature phone unit as a way to expand Microsoft services to millions of Nokia users worldwide as a way to “on-ramp” users to Windows Phones. Microsoft will be able to use Nokia’s brand on feature phones for 10 years. The acquisition is also a bit of a talent acquisition for Microsoft, as it is bringing in most of Nokia’s executive leadership team, including Nokia CEO Stephen Elop who will transfer to being Microsoft’s head of its Devices unit. Elop is still considered a candidate for the CEO role of Microsoft. In addition to Elop, Microsoft is will bring in Jo Harlow to continue leading Nokia’s Smart Devices team, Juha Putkiranta to lead the Nokia integration into Microsoft, Timo Toikkanenen to lead the feature phone Mobile Phone division and Stefan Pannebecker to lead the device Design team. Chris Weber, Nokia’s marketing head and former head of all of Nokia’s U.S. sales, will come to Microsoft and continue his role as Nokia sales chief. Microsoft also bought the rights to license Nokia’s robust patent portfolio for 10 years. Microsoft is specifically buying 8,500 of Nokia's design patents, and will also make its patents available to Nokia for its HERE Maps unit. Nokia will also transfer its patent licensing agreements, including its big one with chipmaker Qualcomm, to Microsoft. Other patent agreements transferred to Microsoft includes those with IBM, Motorola Mobility (owned by Google), Motorola Solutions. Nokia also passes on patent agreements with Apple, LG, Nortel and Kodak to Microsoft.

What Microsoft Did And Didn't Buy With Its Nokia Acquisition

In one fell swoop today, Microsoft is becoming an extremely different type of company. Microsoft is pushing hard to recreate itself as a “devices and services” company and today it took a very big step in that direction by buying, you guessed it, Nokia’s mobile devices and services division. Microsoft is paying $7.17 billion to bring Nokia into the fold, including the design, manufacturing and distribution of both smart and feature phones and the right to license many of Nokia’s patents, as well as the Nokia name and a host of mobile services. See also Microsoft Does Inevitable, Buys Nokia Smartphone Unit, Patents for $7.2 Billion What didn’t Microsoft buy with its $7 billion in cash? Nokia itself, including most of Nokia’s non-smartphone related property (cellular infrastructure and HERE Maps, for example). Many people will say, “Microsoft bought Nokia.” This is true because Microsoft did buy a good portion of the Finland manufacturing company, but Nokia itself will still exist independent of Microsoft. So, what exactly is Microsoft getting? Let’s break it down.

Elop As Future King?

Putting Elop inside Microsoft as a direct report to Ballmer is an interesting move in itself. Since Microsoft is re-tooling itself as a "devices and services" company, it was widely believed that Larson-Green would be one of the lead internal candidates for Ballmer's job as CEO. This made sense from an operational standpoint as well as a professional one, since Larson-Green is regarded as a smart and savvy leader.
That possibility seems very much in doubt now. The wording of the memo from Ballmer seems to indicate that Larson-Green will be reporting to Elop, which would accordingly elevate Elop to the best heir-apparent position within Microsoft for the CEO job. According to an interview with Ballmer by The Verge, Elop has been up for the Microsoft CEO position as an external candidate. He will continue to be in the running as an internal candidate. See also Microsoft's Best Bet For Next CEO Currently Runs Another Giant Company Given Elop's tenure as former head of Microsoft's Business Division from 2008-2010, he certainly has the background to take on the lead role at Microsoft. But Elop's work to date at Nokia has been less than stellar, even after he chose to enter a strategic partnership with Microsoft in 2011 and sell Windows-based smartphones. Sure, it makes sense for a company that wants to remodel itself into a devices company to hire someone who's run a devices company already. But when Elop took over Nokia just shy of three years ago Nokia's global smartphone market share was around 35%. Now, it's around a mere 4%. In 2010, its market cap was over $40 billion. Three years later, Nokia's market cap is $14.6 billion. And since Elop took over, more than 40,000 employees were handed their pink slips in sweeping waves of layoffs. Is this the kind of management Microsoft really needs?

The Nuts And Bolts Of Merging

According to a memo from Steve Ballmer to Microsoft employees last night, what Microsoft wants to do with Elop is create an expanded Devices team that will envelop the existing Devices and Studios group and many of the incoming Nokia employees. Elop will report directly to CEO Ballmer.
Larson-Green, for now, will continue to helm the Devices and Studios team pushing out the expected Xbox One and Surface revamp this fall, Ballmer indicated. "Julie will be joining Stephen’s team once the acquisition closes, and will work with him to shape the new organization," Ballmer continued. Meanwhile, several key Nokia players will also be reporting to Elop in his new role as head of the Devices group: Jo Harlow will continue to lead the Smart Devices team and Timo Toikkanen, will continue to lead the Mobile Phones team. Stefan Pannenbecker will lead Design. There are other aspects of Nokia's business that will have to be merged, such as marketing, sales, finance, HR… all of the cogs that help large companies keep on running. According to the tentative plan outlined by Ballmer, Nokia's sales team will remain intact, but will report to Microsoft COO B. Kevin Turner. Nokia's marketing will be folded into Microsoft's newly integrated global marketing group. Where things get fuzzy for the integration are in areas of manufacturing and figuring out a unified customer support infrastructure. That will be the big job ahead for Microsoft Corp. VP Tom Gibbons and Nokia EVP, Operations Juha Putkiranta, who will be leading the integration efforts on behalf of their respective companies.