Value Unleashed

The Geek's Reading List is a weekly publication written by Valitas advisor, Brian Piccioni. Brian has been part of the technology industry for a third of a century now. He has been a sell-side research analyst for the past 20 years, where he was ranked the #1 tech analyst in Canada for six consecutive years, named one of the best tech analysts in the world, and won a number of awards for stock-picking and estimating. The Geek's Reading List looks at recent developments in the technology sector by discussing articles that Brian compiled over the week. In his own words, the discussions are usually provocative, new, and counter-consensus. The sorts of things not being written anywhere else.

 

The Geek's Reading List
 

1)  Latest IoT DDoS Attack Dwarfs Krebs Takedown At Nearly 1Tbps Driven By 150K Devices
2) HERE, automakers team up to share data on traffic conditions
3) Banks adopting blockchain ‘dramatically faster’ than expected: IBM
4) Print-on-demand bone could quickly mend major injuries
5) WSJ: Qualcomm could spend over $30 billion to acquire NXP Semiconductor
6) D-Wave’s 2,000-Qubit Quantum Annealing Computer Now 1,000x Faster Than Previous Generation
7) Fist-Sized Laser Scanner to Make Autonomous Cars Less Ugly
8) Colossal Self-Driving Mining Truck Has No Back or Front
9) The Best Chromebooks Money Can Buy 2016: Andromeda is COMING
10) Programmable chips turning Azure into a supercomputing powerhouse

1)  Latest IoT DDoS Attack Dwarfs Krebs Takedown At Nearly 1Tbps Driven By 150K Devices

We have written about the low level of security in Internet of Things (IoT) devices in the past. Mostly this was from the perspective of how IoT could compromise your home or business network but hackers have quickly turned these weaknesses to their advantage in launching cyber-attacks. Unfortunately, most IoT vendors have neither the aptitude nor the inclination to do anything about the security of their products so the problem is likely to get much worse.

“If you thought that the massive DDoS attack earlier this month on Brian Krebs’ security blog was record-breaking, take a look at what just happened to France-based hosting provider OVH. OVH was the victim of a wide-scale DDoS attack that was carried via network of over 152,000 IoT devices. According to OVH founder and CTO Octave Klaba, the DDoS attack reached nearly 1 Tbps at its peak. Of those IoT devices participating in the DDoS attack, they were primarily comprised of CCTV cameras and DVRs. Many of these types devices’ network settings are improperly configured, which leaves them ripe for the picking for hackers that would love to use them to carry our destructive attacks.”

http://hothardware.com/news/latest-iot-ddos-attack-dwarfs-krebs-takedown-at-nearly-1-terabyte-per-second

2) HERE, automakers team up to share data on traffic conditions

This is an example of what is to come: using “crowd sourced” information to determine road conditions and other automotive related data. These are all German firms and the test is in Germany so it is a bit hard to imagine how it would work in North America with its spotty and expensive mobile coverage. Ultimately the infrastructure itself will be a source of highly detailed information regarding local conditions. By the way, HERE makes a cool free Google Maps application which stores the maps on your phone so it works even if you don’t have mobile data.

“German digital map maker HERE will introduce a new set of traffic services this week that allows drivers to see for themselves what live road conditions are like miles ahead using data from competing automakers, an industry first. The Berlin-based company, owned by Germany’s three premium automakers, will provide four services in which drivers share detailed video views of traffic jams or accidents, potential road hazards like fog or slippery streets, traffic signs including temporary speed limits and on-street parking. BMW (BMWG.DE), Daimler (DAIGn.DE) and Volkswagen (VOWG_p.DE) will all contribute data to the service, making their first big collaboration since they bought HERE for 2.8 billion euros ($3.1 billion) late last year from mobile equipment maker Nokia NOK1V.HE of Finland.”

http://www.reuters.com/article/us-autos-connected-idUSKCN11V0VG

3) Banks adopting blockchain ‘dramatically faster’ than expected: IBM

IBM is pushing its blockchain capabilities so you have to take this with a grain of salt. Even so, there is no guarantee these projects will be successful no matter how they are measured. Nonetheless with modification blockchain technology has the potential to significantly reduce a lot of manual handling of transactions and reduce costs for banks and other financial institutions.

“Banks and other financial institutions are adopting blockchain technology “dramatically faster” than initially expected, with 15 percent of top global banks intending to roll out full-scale, commercial blockchain products in 2017, IBM said on Wednesday. The technology company said 65 percent of banks expected to have blockchain projects in production in three years’ time, with larger banks – those with more than 100,000 employees – leading the charge. IBM, whose findings were based on a survey of 200 banks, said the areas most commonly identified by lenders as ripe for blockchain-based innovation were clearing and settlement, wholesale payments, equity and debt issuance and reference data.”

http://www.reuters.com/article/us-tech-blockchain-ibm-idUSKCN11Y28D

4) Print-on-demand bone could quickly mend major injuries

Compared to organs bones are pretty simple things and there are plenty of materials which can safely be used as a bone substitute. The idea here is that rather than grafting bone from one part of your body to another (double the pain and risk) or looking around for a prepared cadaver bone (ick) they print up what is needed. The article makes a big deal about how this material is “hyperelastic” but it is not clear to me what the advantage is: after all if the scaffolding can move around how do you know what the end product looks like once the real bone forms.

“If you shatter a bone in the future, a 3D printer and some special ink could be your best medicine. Researchers have created what they call “hyperelastic bone” that can be manufactured on demand and works almost as well as the real thing, at least in monkeys and rats. Though not ready to be implanted in humans, bioengineers are optimistic that the material could be a much-needed leap forward in quickly mending injuries ranging from bones wracked by cancer to broken skulls. “This is a neat way to overcome the challenges we face in generating bone replacements,” says Jos Malda, a biomaterials engineer from Utrecht University in the Netherlands who was not involved in the work. “The scaffold is simpler to make than others and it offers more benefits.”

http://www.sciencemag.org/news/2016/09/print-demand-bone-could-quickly-mend-major-injuries

5) WSJ: Qualcomm could spend over $30 billion to acquire NXP Semiconductor

Semiconductors industry consolidation has been a major theme for the past couple years. Although industry M&A is not as destructive of value as most tech acquisitions purported “synergies” rarely emerge. Nevertheless the ever imaginative application of “non-GAAP” adjustments can make things look a lot better than they really are for a while after the deal closes. In this case, Qualcomm is faced with the inevitable decline in demand for mobile related components so it likely believe it can improve things by devolving into a miscellaneous assortment of largely unrelated businesses. The funny thing is the enterprise value of NXP today is closer to $40B than $30B today which suggests the deal would likely cost closer to $50B than $30B.

“Smartphone chipmaker Qualcomm is in talks to acquire NXP Semiconductors “in the next two to three months,” according to a report from the Wall Street Journal. The deal, which may cost Qualcomm over $30 billion, could be nearly as big as SoftBank’s $32 billion buyout of ARM Holdings that was announced a couple of months ago. NXP is one of the inventors of near-field communication (NFC), a technology primarily known for enabling wireless payment services like Apple Pay and Android Pay. NXP controllers are nearly ubiquitous in modern smartphones in both the iOS and Android ecosystems—the iPhone 6, 6S, and 7 all use NXP controllers, as do Android phones like the Galaxy S7 and Nexus 6P. The company is also a major player in the “Internet of Things” industry, and the acquisition of Freescale Semiconductor for $12 billion late last year made NXP “the world’s top maker of automotive electronics.””

http://arstechnica.com/gadgets/2016/09/wsj-qualcomm-could-spend-over-30-billion-to-acquire-nxp-semiconductor/

6) D-Wave’s 2,000-Qubit Quantum Annealing Computer Now 1,000x Faster Than Previous Generation

D-Wave gets so much press for its “Quantum Computers” it’s almost a pity the machines don’t seem to be able to do anything useful. As for the claims it can simulate “quantum annealing” hundreds of millions of times faster than a single core computer, well bully for them: a capacitor runs hundreds of millions of times faster than a simulation of a capacitor. If, as, and when, a D-Wave machine can solve a commercially relevant problem orders of magnitude faster than off the shelf electronics we can discuss whether it is significant technologically.

“D-Wave has been criticized by many quantum computing experts, who, for one, say it’s not a true universal quantum computer (which Google itself and IBM are now building), and second, they don’t believe D-Wave’s “quantum annealing computer” is all that useful compared to standard computers. A quantum annealing computer is a special-purpose quantum computer, so the difference between it and a universal quantum computer is kind of like the difference between an ASIC and a CPU. In theory, D-Wave’s computer should at least be useful for some optimization problems, where you have many variables and are trying to optimize for the best solution. Last year, Google announced that its tests show that for quantum annealing tasks, D-Wave’s 1,000-qubit computer proved to be 100 million times faster than a classical computer with a single core:”

http://www.tomshardware.com/news/d-wave-2000-qubit-1000x-faster,32768.html

7) Fist-Sized Laser Scanner to Make Autonomous Cars Less Ugly

One of the most important technologies behind driverless cars is combined image and range information (i.e. where something is in 3 dimensions). This sort of information you need to avoid slamming into a tractor trailer or stationary vehicle at high speed as does Tesla’s “Autopilot”. Most LIDAR systems have been developed for the military and as a result are staggeringly expensive. I figure these will eventually cost $10 or so and cars will have a minimum of 4 of them to provide a 360 degree view and full redundancy.

““You’ll never know that they’re even in the vehicle,” says Louay Eldada, CEO of startup Quanergy, which invented the new design and turned to sensor company Sensata to manufacture it. Sensors can be hidden in places such as behind a car’s grill, or inside the rearview or side mirrors, says Eldada. Quanergy plans to price its compact lidar at $250. You’ll need three to match the 360-degree view of the bulky sensors atop Alphabet and Uber vehicles, but sensors of that type cost thousands or tens of thousands of dollars.”

https://www.technologyreview.com/s/602503/fist-sized-laser-scanner-to-make-autonomous-cars-less-ugly/

8) Colossal Self-Driving Mining Truck Has No Back or Front

Remotely operated mining vehicles have been in use for some time now. I suspect that is what this is but the news coverage focused on the “self-driving” aspect so it is impossible to say for sure given the information. The idea is a good one as the animation (https://www.youtube.com/watch?v=SNelRmmPpls&feature=youtu.be/) shows. Mining is a closed loop operation and therefore even if the truck is in fact an AV the challenges would be reduced considerably. Not only that but putting human drivers in a cab is very expensive and these machine should operate 24 hours a day so there should be a rapid pay back.

“Semi-autonomous vehicles are becoming more common at large-scale mining operations. The huge dump trucks that ferry material around giant dig sites have featured unmanned driving capabilities for a few years, though they’ve always had provisions for human drivers to take over. Now, Komatsu has unveiled an all-new heavy duty dump truck with no cab, no steering wheel, no windshield—no accommodations for human drivers whatsoever. And with no human driver, who’s to say which end is the front and which is the back? Think of what a benefit this would be to mining companies. Traditionally, the human operator sits at the front of the hauling truck, with the dump bed unloading from the rear. This forces the trucks to turn around frequently, adding complexity to the movement of materials.”

http://www.popularmechanics.com/cars/trucks/a23070/self-driving-truck-mining/

9) The Best Chromebooks Money Can Buy 2016: Andromeda is COMING

Chromebooks are a rapidly growing component of the PC market. Because they are based on a browser and cloud technologies manufacturers have a lot more latitude with respect to their CPU and innards so they can be built quite cheaply. Andromeda combines Chrome with Android, meaning pretty much any app which runs on Android will now run on a Chromebook. I don’t really see the point of paying $1,000 for a high end Chromebook since you can buy a standalone (i.e. Windows) PC for a fraction of that cost. Nevertheless the low end machines are ideal for kids and travel.

“Google’s Chromebooks have been something of a quiet revolution in the computing space. A lot of people still don’t know about Chromebooks, preferring to use Apple and Microsoft for their laptop and desktop needs. However, more and more people are waking up to a third way — the ChromeOS way. The reasons for this are myriad; but the two most prominent reasons why people LOVE Chromebooks are price and choice. Like Android phones, Chromebooks come in all shapes and sizes from a variety of manufacturers. You have high end machines like the Pixel and entry-level models that can be picked up for $200.”

http://www.knowyourmobile.com/devices/chromebooks/23738/best-chromebooks-2016-andromeda-update

10) Programmable chips turning Azure into a supercomputing powerhouse

Intel closed the Altera acquisition some time ago and Microsoft’s use of Field Programmable Gate Arrays (a type of chip which can have its functionality completely changed after manufacture) provides some insight as to what these devices can do. The thing to remember is that having a bunch of these in a datacenter is completely different from having one inside a PC: unless somebody comes up with a suite of premade FPGA algorithms for home use – and frankly it is hard to imagine what those would be – this will remain a datacenter only type solution, albeit a powerful one.

“Networking is the first workload in Azure, but it’s not going to be the only one. In principle, Microsoft could offer a menu of FPGA-accelerated algorithms (pattern matching, machine learning, and certain kinds of large-scale number crunching would all be good candidates) that virtual machine users could opt into, and longer term custom programming of the FPGAs could be an option. Microsoft gave a demonstration at its Ignite conference this week of just what this power could be used for. Distinguished engineer Doug Burger, who had led the Project Catapult work, demonstrated a machine translation of all 3 billion words of English Wikipedia on thousands of FPGAs simultaneously, crunching through the entire set of data in just a tenth of a second. The total processing power of all those FPGAs together was estimated at about 1 exa-operations—one billion billion, 1018 operations—per second, working on an artificial intelligence-style workload.”

http://arstechnica.com/information-technology/2016/09/programmable-chips-turning-azure-into-a-supercomputing-powerhouse/