Every week the Opus team picks a news story or topic or idea that is relevant to the entrepreneurs and businesses we partner with.

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The Industrial Internet Consortium

Ajit Deshpande - - 0 Comments

The Internet of Things has been a hot discussion topic (as well as an emerging trend) over the past few years. As a term, it encompasses a broad range of sectors, including M2M, smart consumer end-points, wearable devices, sensor networks, machine learning, factory-automation, and so on. As devices and data continue to proliferate, interoperability across IoT devices, platforms and networks is becoming more and more a concern. Well, last week, a step was taken towards alleviating this concern, with the announcement of the Industrial Internet Consortium (IIC), formed by Cisco, IBM, GE, Intel and AT&T, with the objective of creating an interoperability standard around IoT.

There have been attempts made in the past around standardization, most notably the AllSeen alliance launched by Qualcomm and a number of startups to push Qualcomm’s AllJoyn as a standard, with somewhat of a consumer end-point focus. In comparison, IIC seems to be more focused on industrial use-cases. Together, these are two huge steps in providing structure to the infrastructure layer for IoT. At the same time, the one player conspicuous by its absence in these standardization efforts is Google with its Android OS. If, as expected, Android ends up becoming the OS around end-points and network controllers, then likely Google will hold all the aces around interoperability, potentially making IIC and AllSeen and others somewhat redundant.

So, we will see how things shape up. Indeed, the lack of interoperability within IoT has in the past been a bit of a deterrent for early stage venture investors (beyond the wearable device space, which has been able to raise good money on the back of successful crowd-funding campaigns), so hopefully IIC and AllJoyn and other initiatives help free up startups in this space to focus on what might eventually matter the most – data consolidation, data processing, and data analytics.

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Insights, from New Relic

Ajit Deshpande - - 0 Comments

Last week, application performance management (APM) startup New Relic announced the launch of New Relic Insights, a real-time analytics platform for web applications. Formerly code-named Rubicon, New Relic Insights consists of two parts: a set of analytics extensions/agents added to the enterprise application, and a cloud based service that ingests the data from the applications and allows detailed querying, analysis and reporting. New Relic’s agents extract data from the enterprise app and then store and present the information in real-time via its SQL-like query language. The entire service is a custom, closed source creation, and is not based on any existing open-source solutions such as Hadoop.

New Relic Insights helps users go beyond just crash-reporting and into more real-time data extraction and analytics, and is one piece of New Relic’s broader portfolio of planned products that includes APM (web, mobile and browser-based) and server performance monitoring amongst other things. In itself this looks like a pretty holistic approach geared towards monitoring performance across the hardware and software stack. At the same time, the interesting thing to note is that the use-cases (and correspondingly the buying decision makers) across these products are quite different from each other, spanning IT Operations, Web Development, Mobile Development and Business Analysis. In that sense, it will be interesting to see how successful New Relic will be in making its broad vision a reality. Indeed, New Relic Insights could be by itself already a challenging proposition, in terms of purposing a single platform for analytics and business intelligence across a variety of applications.

So, where might this go? Might this be just a posturing tactic by New Relic to scare off early-entrepreneurs in this domain, or is New Relic laying out the vision for what might eventually become a strategy driven by inorganic growth? Could this be a blueprint that mobile APM leaders such as Opus portfolio company Crittercism should also evaluate? We will see, but for now, it is at the least interesting that in a world that on the face of it seems to be going all-in into open-source, New Relic is joining Splunk and a few other analytics players in building a closed-source, custom analytics solution.

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Embedded images, from Getty

Ajit Deshpande - - 0 Comments

Last week, image licensing giant Getty Images announced that it was opening up more than 35 million of its images to be embedded into online content platforms such as WordPress, Twitter and Tumblr. The embedded images on their part would attribute to Getty Images as the owner of the content, as well as link to the Getty content repository for purchases.

Getty and Corbis are the two dominant image repositories today. Both of them have similar business models: buy stock photograph rights from photographers, license these images out to online content creators for a fee, and enforce their ownership rights via legal channels as much as possible. Last week’s announcement has been touted by many as similar to the transformation that online music went through, wherein pirated music sharing was replaced by low-cost purchases on iTunes. In terms of legality, this seems to be a step in the right direction for Getty, because it can now utilize image embedding for two purposes: brand recognition, and advertising. Earlier, the only input that Getty had in pricing its images was buyer demand in terms of number of image purchases, but the company had no visibility into the number of eye-balls an image received, which in turn was driven by the caliber of the web-content that the image was used within. Now, with advertising and brand visibility coming from image embedding, Getty’s revenue can likely scale with the number of image impressions, which makes this new model far more effective for Getty.

But then, what about the photographer? Could he/she also be somehow enabled to make money proportionately to the number of image impressions? Could a pricing engine be built that gives the photographer a choice between selling image rights upfront (for the right amount), or receiving image royalties based on impressions, or some hybrid of these two approaches? Could someone like Getty offer its photographers such a versatile and predictive pricing platform? Now *that* would be a true marketplace strengthening innovation!

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Atlassian builds its marketplace

Ajit Deshpande - - 0 Comments

For more than a decade now, Sydney, Australia based company Atlassian has been offering tools that are widely used by software developers and project managers. The company offers products such as issue tracking application Jira, hosted code collaboration solution Bitbucket, and Git repository management platform Stash among others, which have together helped the company get to more than $150 million in annual revenues. Over the years, third party developers have built add-ons to Atlassian’s on-premise offerings to help further meet developer needs; these have been offered via the company’s online marketplace over the past year or so. Now, as development moves more and more into the cloud, Atlassian has continued to make its own transition as well, and last week the company announced it was opening up its marketplace to third party add-ons for its cloud products as well.

Issue tracking and version control have seen a lot of advancements over the past decade, partly driven by Atlassian and competitor Github, each of which is currently valued at more than a billion dollars. As competition between the two players continues to heat up, the key aspect here will likely be which company gains greater mindshare and usage amongst developers. In this context, Atlassian’s recent launch of Git Essentials (a product suite that combines Jira, Stash and other tools into a single integrated offering for enterprises) as well as last week’s marketplace-related announcement will help the company further engage its developer community. Github on the other hand has taken a slightly different approach; instead of building an affiliate marketplace program, it offers other avenues such as job postings to bring developers to its site. With both Github and Atlassian continuing to take such steps towards developing their ecosystem within this humongous software development market, the great news is that likely there will be three winners here: Atlassian, Github and finally the software developer!

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Have small cells finally arrived?

Ajit Deshpande - - 0 Comments

Last week saw a couple announcements about carrier giants AT&T and Verizon rolling out small cells in a few locations in the United States. AT&T announced that it had completed rollouts of Distributed Antenna Systems (DAS), small cells and repeaters across multiple theme parks for Disney. As for Verizon, supplier Alcatel Lucent announced that its small cells are now being deployed in the Verizon Wireless network to boost coverage and capacity in busy areas such as shopping malls, sports stadia, and high high-traffic areas. These announcements indicate continued momentum within the small cell space, and the actual deployments follow well from last year’s multi-year plan announcements from the carriers on this front.

There are only a few ways to deal with the cellular spectrum crunch: DAS deployments, or small cell deployments or Wi-Fi offload infrastructure. DAS involves more complex deployment, and wi-fi offload depends on VoiP smartphone adoption, which leaves small cells as the default solution for consumer cellular coverage. In this context, the fact that the carriers are moving forward essentially means one or both of two things – that the time has come to deal with the spectrum crunch, or that the consumer geo-targeting-driven ROI from these small cells has finally become interesting enough for the carriers.

As for enterprise-grade small cell solutions, things keep moving forward. Self-organizing small cell networks within the enterprise (such as from Opus portfolio company Spidercloud) make even more business sense for carriers than do consumer small cells, because the enterprise has far more willingness to pay for business services offered through such small cells (e.g. cloud access, security), and because aside from the more complex DAS, small cells are about the only way for pure-play wireless carriers to even have a device node within the enterprise. So, likely, the time for small cells has finally arrived…

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Flickr Turns 10!

Ajit Deshpande - - 0 Comments

Photo-sharing site Flickr last week celebrated its 10th anniversary. Acquired by Yahoo in 2005 for 35 million, Flickr currently has 92 million users across 63 countries that between them share a million photos per day. More than 6 billion photos had been uploaded to Flickr by mid-2011, indicating that likely approximately 7 billion photos have been uploaded so far.

The past decade has seen significant evolution in this space, from image repositories to private image sharing groups to mobile social sharing communities. Facebook, Instagram, Picasa, Flickr, Photobucket and Shutterfly, as well as many other upstarts, have all been jostling for consumer attention over this timeframe. A lot has been said about Yahoo’s role in Flickr’s evolution over this decade. On the whole, Flickr has done reasonably well, yet the product has been clearly negatively impacted by the social and mobile wave. It took just more than a year (between 2010 and 2011) for a billion images to be uploaded to Flickr, whereas their current upload runrate of 1 million a day is far slower. Further, Flickr is already dwarfed by two-year old Instagram’s 150 million users and 16 billion uploads.

So, here we are today: mobile device adoption resulting in exponential growth in image data, storage constraints creating silos of content across multiple devices for the user, and multiple social-sharing communities causing further fragmentation of consumer-owned content. Now that the key platforms have emerged, the need of the hour might be for an aggregator to bring all these together: one that might be able to sync images and track friend-lists across a user’s various image platforms, one that could potentially consolidate storage capacities across these platforms, one that could help a user seamlessly share albums and images across various public or private lists. Efforts are underway on this front, at Opus portfolio company Eye-Fi , at Lyve (Seagate funded startup set up by Apple alums) and at other firms. We have now moved on from physical prints to digital memories, so here’s hoping that we are able to manage these digital memories and revisit them over coming decades.

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Isis and the banks!

Ajit Deshpande - - 0 Comments

Contactless mobile payment technology has been around for almost a decade now, but has not yet become main-stream in the United States. Isis, the joint mobile wallet initiative undertaken by AT&T, Verizon and T-Mobile, has been touted as a key player in driving technology and consumer adoption in this space. Last week, the company announced that three large banks, Wells Fargo, Chase and American Express, as well as a number of key merchants including Jamba Juice, Coca Cola and Toys’R’Us had partnered with it to offer cash and in-kind incentives of up to $300 over the next three months for each consumer that used the Isis Mobile Wallet.

Contactless mobile payment makes logical sense for the long run, since it leverages the pervasiveness of mobile devices to enable online tracking and management of financial transactions. However, the technology has seen adoption challenges on two main fronts. First, deployment of Near Field Communication (NFC) compatible Point-of-Sale Systems needs merchants to commit to capital expenditures and PoS integration. Second, getting consumers to adopt and start using mobile wallets is a significant challenge around user experience, credentials management etc. With last week’s announcements, Isis is attempting to address both of the above challenges to some extent, thus providing some much needed momentum to contactless payments. Carriers have much to gain from this, since they control the mobile handset, and so would much rather have the mobile phone become the hub for all transactions. For merchants and banks too, the benefits are significant early on – high-end early-adopter consumers for the merchants, and ‘top of the wallet’ spots for participating bank credit cards.

Significant headwinds still remain in this space. Large corporate entities such as Google and Sprint, as well as startups including Opus portfolio company Sequent continue to chip in to spur market adoption, yet NFC continues to have its challenges. Apple continues to be the most visible holdout on the device front, and NFC compatible PoS system deployment continues to be slow. Can Isis and its banking and merchant partners create enough of a positive feedback loop with these near term offers to successfully lure and retain consumers? Consequently, could 2014 eventually become the ‘year of NFC’? All that remains to be seen…

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OpenStreetMap gets a fillip

Ajit Deshpande - - 0 Comments

Last week, mobile GPS-based mapping player Telenav announced that it had purchased OpenStreetMap (OSM) based mapping app developer Skobbler for approximately $24 million. Based in Germany, Skobbler is the top-rated OSM-based navigation app at this time. This move by Telenav unites Skobbler’s strong team with OSM founder Steve Coast who joined Telenav from Microsoft in 2013.  OSM itself is a 10 year old project that currently more than 1.5 million individuals contribute towards, to continually build and enhance an editable global map. Recently, it has been adopted by apps such as Foursquare.

As of today, mapping data comes from four key sources: Google, TomTom, Navteq (part of Nokia), and OSM. Navigation apps use this data across three broad categories – web and mobile mapping which sees players such as Google Maps, Waze, Telenav (Scout mobile app which uses Navteq) and Apple Maps (based on TomTom); automotive mapping which is dominated by Navteq, Garmin (based on Navteq) and TomTom; and the consumer GPS device segment where Garmin dominates. Of the mapping data providers, clearly, the only one with any chance at competing with Google is OSM and its crowd-sourced, open-source approach. Now, with Steve Coast and the Skobbler team on board, Telenav becomes the first major GPS mapping player to formally ‘get behind the crowd’. This should likely cause some introspection at Google, and even more so at Apple and Nokia.

While Skobbler clearly wasn’t a big exit, it does further prove the validity of a crowd-sourcing focused business model, following in the footsteps of Waze. As for Telenav, in theory it now has the resources to build an OSM-based competitor to Waze. Could the Telenav leverage these resources to obtain a billion dollar outcome for itself? Now that depends on execution (and potential acquirer Apple as well).

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Another billion dollar acquisition for VMware

Ajit Deshpande - - 0 Comments

Mobile device management (MDM) had its first billion dollar exit last week, when one of the leading startups in the space, Airwatch, was acquired by VMware for more than $1.5 billion. An eleven year old Atlanta-based company, Airwatch has more than 10,000 customers and between $125 and $150 million in revenues.

From a technology trends standpoint, there might be some headwinds around the MDM space. The first question is whether mobile can become a decent end-user compute platform, and the second question is whether mobile data or application management, wherein the focus is more around managing and securing data and apps rather than managing the end-point device, is the better approach. Both of the above will impact the long term need and growth prospects for MDM. However, all things considered, Airwatch still looks like an excellent fit for VMware.  VMware has recently been focused on mobile virtualization, which is likely complementary to Airwatch’s MDM suite. Airwatch also likely brings key new customer relationships to VMware, while at the same time helping VMware ward off competitor Citrix (which purchased smaller MDM player Zenprise in late 2012). As VMware goes up against Amazon and Microsoft and Google on the server virtualization front, this mobility play opens up another flank for the company. Most importantly, this acquisition strengthens the EMC family significantly. Pivotal already has strong capabilities around mobile data architectures (via the Pivotal Labs acquisition) and mobile app development (via the Extreme Labs acquisition). It will be interesting to see if components of Airwatch’s technology make it to Pivotal to help Pivotal become a full stack mobility services provider to the industrial internet.

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The Nest Acquisition

Ajit Deshpande - - 0 Comments

Last week saw one of the largest venture-backed private company acquisitions in recent memory, when Google purchased smart thermostat and smoke detector maker Nest Labs for $3.2 billion. As has been widely reported, Nest boasts a rockstar team of more than 300 employees, led by former iPod guru Tony Fadell. The company is estimated to be shipping approximately 100,000 of its thermostats every month, which at $249 per thermostat translates to an annual revenue run-rate of approximately $300 million.

A number of interesting viewpoints have emerged post the acquisition. First, does this represent the second coming of energy technology? Probably not… In many ways, Nest represents the same business approach that has made Apple and Tesla successful – develop a high-end device that offers amazing user experience, and over time build and nurture a loyal, high-margin user base. So, while a case could be made that Nest’s smart learning algorithms offer say a one to two year payback over traditional programmable thermostats, likely that is not the key selling proposition. The key selling proposition is one around design, just like for the iPod. Second, did Google overpay in this case? Again, likely not… Google the company is built around web and mobile driven marketplaces and two sided networks, yet the company has astutely identified the internet of everything (connected cars, home endpoints and the like) as the next secular megatrend, and the way to participate in this megatrend beyond pushing Android OS is to focus on product design, something that Nest Labs uniquely offers today. And along the way, even if Nest can sell its thermostats and smoke detectors into 3% of the United States’ 135 million households, that itself represents between two and four billion dollars in revenues to Google.

The first step towards the Internet of Everything gaining broad-based prevalence is to achieve scale within its infrastructure layer (end-points and their cloud-connectivity), which in turn is a segment that consists of a host of large corporates as well as startups such as Opus portfolio companies GainSpan and Arrayent. Can Nest become the rising tide that lifts all boats within this infrastructure layer? That seems like the bet that Google is making, and if the bet works out then Google’s billions will have been well worth it.

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