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Hu's Place

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Digital transformation is impacting business and society on a worldwide basis. In the past most enterprises focused on the new technologies which were supposed to make us more productive. In reality according to the office of Economic Cooperation and Development, productivity in most countries, even in the most technologically advanced countries like the U.S. and Japan, has declined. In the past few years we have come to realize that technology alone cannot make a positive change in business and society if we did not change the way in which we used technology. This is what digital transformation is about.

 

In order to drive greater efficiencies and transform business models we must progressively change in response to the wave of innovation created by digital technology. Today it is more about business outcomes rather than products. Companies like Uber and Airbnb have shown us that transformation is more about “usership” rather than ownership with everything as a service. Closed and proprietary has given way to open interfaces in order to exist in a sharing ecosystem. Enterprises are beginning to realize that individual optimization may not contribute to overall optimization. While IT departments have become very efficient with advances in data center technologies, that has not always resulted in increased revenue and growth for the enterprise. Now enterprises are integrating IT with the lines of business in Agile teams to drive overall efficiencies.

 

Digital transformation is also redefining the relationship between producers and consumers in the creation of value. We are witnessing a shift in value creation away from producer centric, solution value creation to a co-creation paradigm of value creation. Professors Prahalad and Ramaswamy, who wrote the book on co-creation, defined co-creation as “the joint creation of value by the company and the customer; allowing the customer to co-construct the service experience to suit their context.”

 

Traditional business thinking starts with the premise that the producer autonomously determines value through its choice of products and services. Consumers were consulted through market research but were passively involved in the process of creating solutions and value.  Producers and consumers can no longer survive in the digital world with this traditional approach to value creation. In the digital world the pace of change is relentless, problems span across multiple domains, with a blurring of industry domains and boundaries. Producers cannot take years to develop a solution and consumers cannot plan their business on multiyear roadmaps that may not deliver what they need. If consumers and producers are to innovate they must be active participants in the value creation process as co-creators.

 

Hitachi sees co-creation as the process of collaborating with customers and ecosystem players in order to innovate and create new value for business stakeholders, customers and society at large.  Several years ago, Hitachi restructured their research division. For years Hitachi research was ranked among the top ten research organizations in terms of the number of patents that were granted. So why reorganize? Hitachi realized that they needed to focus on business outcomes and not patents, and they needed to organize around co-creation with their customers in order to drive innovation. Hitachi research was reorganized into three parts: A vision driven Center for Exploratory Research (CER) to pioneer new frontiers through exploratory research, a technology driven Center for Technology Innovation (CTI) to generate innovative products by focusing on strong technology platforms and their deployment, and a customer driven Center for Social Innovation (CSI) designed to co-create services and solutions with customers. The center for Social Innovation has behind it the full research capabilities of the Center for Technical innovation and the Center for exploratory research while working with customers and ecosystem players.

 

Centers for Social innovation are located around the world. One is located in Sunnyvale California which is located only a few miles from Hitachi Vantara headquarters in Santa Clara. In this center, there is a Financial Innovation Laboratory that is working with FSI companies, Fintech companies with original ideas, other non-finance innovation labs that share the same site and other research institutions like Stanford University. CSI labs are also located in Brazil, Europe, China, Singapore, and Tokyo.

 

Hitachi Vantara with its Lumada platform will facilitate co-creation by providing a platform for agile and collaborative creation. Lumada is designed for ease of operations and management for faster deployment, configuration, and modification. Lumada uses open source software for its individual components to enable quick adoption to new fields of IT that may be developed by the community, more frequent interaction with other industries and business categories, and ease of connectivity and sharing with other companies.

 

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Hitachi Vantara services and support are ready to work with customers who are willing to invest in co-creation. Not all customers are ready for co-creation. Co-creation requires an investment of time and resources and a transparency and dialogue with your co-creator. The first step is to engage each other to define a use case. Then develop a model which we put through a proof of concept and finalize a solution through a proof of value. After that we operationalize the solution by deploying it at scale and integrate with the business. The customer can then operate and manage the solution or Hitachi can provide this as a service to deliver business value. While this process sounds simple, there will probably be many iterations. Along the way there may be POCs and POVs that fail, but even the failures will help us both gain more skills and insights into the outcomes that we are targeting.

 

Digital transformation will drive co-creation, and Hitachi would like to be your co-creation partner.

Hu Yoshida

Octopus, Fog, and Vantara

Posted by Hu Yoshida Oct 5, 2017

One of the breakout presentations at Hitachi’s Next 2017 event in Las Vegas last month was on Fog Computing.

 

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Sudhanshu Gaur, Director, Digital Solution Platform Lab Hitachi America started  the presentation by describing how an octopus has a distributed brain. Apparently an Octopus has separate brains in each tentacle besides the brain in his head. If the head brain wants to eat something, it has to send a message to the appropriate tentacle to seize the food and bring it to its mouth. If a tentacle is severed it continues to react to stimuli for some time after. In addition, the suckers on the tentacles have some ability to recognize its own skin so that it does not get stuck on itself. This was used as an example of fog computing where intelligence is distributed between the cloud and the edge device.

 

Techtarget.com defines Fog computing, also known as fog networking or fogging, as a decentralized computing infrastructure in which data, compute, storage and applications are distributed in the most logical, efficient place between the data source and the cloud. Fog computing essentially extends cloud computing and services to the edge of the network, bringing the advantages and power of the cloud closer to where data is created and acted upon.

 

A good example of fog computing is an autonomous car. Some compute and storage resides in the edge device, the car, where it needs to make instant decisions about steering, braking and accelerating. The car may be connected to a traffic controller that manages the traffic on a roadway system, and it may be connected to a system in the cloud that monitors usage, predicts remaining driving range, and prescribes maintenance.

 

Peter Levine, a general partner at the venture capital firm Andreessen Horowitz, would take exception to the fog definition that fog computing extends cloud computing and services to the edge of the network. He is being widely quoted in the business media as saying that edge computing will displace the cloud. He points to edge devices like self-driving cars and drones which are really data centers that need to make immediate decisions using AI and machine learning and cannot wait for cloud computing decisions. Peter believes that his job as an investor is to recognize where the industry is headed before it happens and he sees this as a major new trend. You can see his 25 minute video at this site

 

I have been in this business since the mainframe days, and I have seen the pendulum swing from centralized mainframes to distributed open systems and then back to a centralized cloud; so I am not surprised to see it swing once more to a distributed edge or fog. IoT will drive compute to the edge and points in between, where it is most logical and efficient to drive business outcomes. Whenever we see these swings it is accompanied by major disruption in the industry and many technology companies that were leaders in their day, are no longer in existence - Digital, Amdahl, and yes even EMC.

 

Cloud, like mainframes and distributed open systems will still have a place in the computing ecosystem, but the role of the cloud will change. IoT, devices on the edge will act and react with other devices in real time aided by AI and machine learning. Cloud will do the heavy analytics work, facilitate communication between systems, provide common repositories and data governance, work that would be too heavy for the edge at this time.

 

IoT is about edge computing and Hitachi is pivoting to address this with the formation of a new company, Hitachi Vantara, which integrates Hitachi Data Systems Infrastructure and cloud, Hitachi Insight Lumada IoT platform, and Pentaho analytics. Hitachi Vantara is a new company, purpose built, to address the IoT market and all points in between.

Last week we announced that Hitachi Data Systems, was integrated with two other companies, Hitachi Insight Group and Pentaho to form a new legal entity that is called Hitachi Vantara. Nothing was lost in this integration, in fact the benefits of this integration was greater than the sum of the parts. All the resources, the intellectual property, the experience and solutions capabilities of Hitachi Data Systems are now augmented by the IOT capabilities of Hitachi Insights and the analytics of Pentaho.

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The response has been very positive as the industry is focusing on digital transformation and business outcomes. However, one of our competitors in the storage space published a blog speculating that this announcement indicated a move away from enterprise storage. This is nonsense, and would have been clear to them if they had read our announcement letter or any of the social media like the Register, which followed the announcement. In our announcement letter we stated:

“Hitachi Vantara will continue to develop the trusted data management and analytics technologies Hitachi is known for, including Hitachi’s popular data infrastructure, storage and compute solutions, and Pentaho software. It will also be driving the development of strategic software and services solutions, including Hitachi Smart Data Center software and services, Lumada, Hitachi’s IoT platform, now available as a standalone, commercial software offering, and Hitachi co-creation services”.

 

This storage competitor made the misleading claim that we didn’t release any new flash storage offerings and that we do not have NVMe support. This is obviously false based on our concurrent release of New Converged Infrastructure Systems which includes the UCP CI (built on Hitachi VSP flash systems), and the UCP HC, which includes next generation NVMe flash. Perhaps they missed this since they are only able to talk about storage and not about hyper converged solutions with NVMe acceleration, and end-to-end software which provides automated provisioning, simplified data management, orchestration, and improved operational efficiencies for a converged infrastructure including Storage, compute, and networking. While we have delivered NVMe support, this competitor’s NVMe is still months away.

 

Today a storage vendor that is tied to the hardware, will have a hard-time pivoting to software-defined offerings, moving up the stack to provide automation, analytics & higher-value solutions, and delivering value in cloud environments. Customers prefer dealing with vendors that can be outcome and business focused.

 

Hitachi Vantara is about solutions and business outcomes and not about boxes.

Industrial robots are estimated to be a $14 billion market in 2017 led by the automotive industry. Smaller and cheaper robots, that are designed to work alongside humans, called cobots, are expected to open the doors for more use of robotics in assembly lines where traditional industrial robots are too big, dangerous or expensive to install to be worth the investment. IDC is predicting that the robot market will be worth $135bn by 2019.  IDC notes that Asia is retooling its manufacturing sector and already accounts for 69% of robot spending.

 

The history of Hitachi Group’s robotics dates back to the 1960s with a remote controlled device for nuclear power plant operations. Since then Hitachi has introduced a wide variety of robots from mechatronic products such as semiconductor testing equipment to robots for extreme environments like nuclear power plants. Now as we move the focus to IoT, Robotics will play a key role in bridging the gap between the real and virtual worlds. Data processing must go beyond cyberspace. IoT will require new and innovative services in the real world which will depend on our ability to combine data with physical operations. Hitachi is implementing social innovation by integrating robotics with IoT platforms and using that technology in social infrastructures.

 

In 2005 Hitachi’s R&D developed one of the first human symbiotic robots, and named it "Excellent Mobility and Interactive Existence as Workmate" or EMIEW for short. Last year they introduced the third version EMIEW 3 which we displayed at you NEXT 2017 event in Las Vegas September 18-19. Here is a photo of EMIEW 3 and me in Vegas. EMIEW 3 is on the right.

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The purpose of EMIEW is to assist our daily lives and to live with humans. It is designed with a round shape and its voice is programmed to be child-like. Its size was designed to be at eye level with someone who is seated, and it weighs only 15 kg so that it will not do any harm in the event that it bumps into a person. It rolls along on wheels at normal walking speed of 6 km/hr, can step over a 5.9 inch height, avoid obstacles, and can right itself if it happens to fall over. It has a remote brain in the cloud that can provide information from video cameras and other sensors around the area, and communicate with other EMIEWs. It can isolate human voices amid noise, communicate in English, Japanese, and Chinese, make appropriate responses to questions regardless of phrasing, and initiate conversations based on visual analysis of what it sees through its own cameras or remote cameras in the cloud.  EMIEW incorporates, AI, natural language processing, visual analytics, autonomous mobility, edge and cloud computing all in one package.

 

EMIEW 3 is a human symbiotic robot that is designed to provide user assistance and information services. It is intended for practical service use at customer sites and was developed for safer and more stable operations.  It was recently tested at Haneda International airport to assist travelers with directions and questions.

 

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EMIEW has some very Japanese characteristics. When I lived in Japan, I was always impressed by how helpful and polite people were. When I was lost in Tokyo, I often had to ask directions, especially in the large subway stations. People would stop and try to understand my poor Japanese, then walk with me to the right subway platform. This would never happen in the U.S. If I were able to stop someone, they would at best point me in the direction then hurry off on their own business. That is why it is important for EMIEW to be able to move as well as converse. EMIEW will also bow to you and kneel. EMIEW 3 in the picture above is kneeling. I chose not to kneel, since I wasn't too sure that I could stand up again.

 

EMIEW is still in a development phase with co-creation with several customers around the world. In Japan it may be able to provide care giving services for their aging population. Each project will provide valuable experience with customers in the field, and we will be able to harvest a lot of the learnings for other IoT projects.

 

At 9:15 am PDT, on September 19, 2017, with a click of button, Higashihara-san, President and CEO of Hitachi Ltd unveiled the name of a new Hitachi Company; Hitachi Vantara at the Hitachi Next 2017 event in Las Vegas. We all know by now that this is a new company, combining the human resources and broad portfolio of innovation, development and experience from across Hitachi Data Systems, Hitachi Insight and Pentaho. This new company was formed to target the IoT market and deliver data-driven solutions for commercial and industrial enterprises.

 

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By 10 am when we went for a break that morning I was given my new Vantara business card, and was able to log into my new email domain as hu.yoshida@hitachiVantara.com. I took a picture of my business card and posted it on my first Hitachi Vantara blog:  I'm Working for a New Company! The experience was seamless. Operations in this new company has gone on without any disruption which is remarkable given all the challenges required in branding a new legal entity in a matter of hours. This affects all our online devices and outside facing websites. Our sales were especially grateful for this non-disruptive changeover since September is the close of our FY 3Q. Everyone has been excited and celebrating our new company.

 

In the midst of this euphoria, I happened to wonder how this was all accomplished from an IT perspective. The old saw is that you never think about IT until there is a problem and there wasn’t any so I suspect that few of us even thought about IT.

 

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I called up “T” (Theodore) Lamour, director of Infrastructure Support who led the migration effort for IT,  and Ben Fanning, who is the manager responsible for the global Service Desk of Vantara (Denver-Hyderabad-and soon Krakow), first to thank them for the smooth transition of my email and desk top and then to ask them how this was done from their perspective.

 

While everyone in the three companies were prepped to expect a short outage of their emails, no one expected to see this done so smoothly. From the moment that Higashihara-san pressed the button, IT was able to switch over 10,751 users in a total of 30 hours where no single user was down for more than a few hours! Where users needed to use email, they were referred to their web client, so in fact no one was really out of email contact.

 

The switch-over was done on a follow the sun basis. First were the attendees at the Las Vegas event, and then Asia Pacific, followed by EMEA, then the Americas. Each region was done in two batches, to ensure that if the migration process took longer than intended, the region’s location would still be able to operate before the next batch kicked in. The Americas actually was done in three batches due to the size of the region. The target was for this to be done in 36 hours, and the goal was to do most of it overnight in each region.  Since we are on Office 365, being in the cloud was helpful but it also meant that the transfer was dependent on cloud performance. This wasn’t just about emails. This meant changing our network certificates, rebranding external websites, working with Akamai on our content changes, installing new desktop branding on all clients, and changing the email signitures. Even with all this, IT was able to beat their internal target by 6 hours!

 

While from my experience the transition was seamless, the team told me that there was an increase in service calls which the service desk had prepared for. No matter how much you communicate, there is always someone who didn’t read the prep email and was surprised when their email wasn’t working. Those calls would be answered by explaining what was being done and the work around which was to use webmail. With all the mobile devices out in the field and many BYOD users there was bound to be some problems so the transition team set up a virtual war room. Instead of a physical war room they used a Skype for Business chat room and connected support personnel around the world with instant messaging and collaboration tools. They also credited the teamwork of our users who helped each other without the need to call support.

 

Integrating three companies in flight into one legal entity is a once in a lifetime experience, and is a task that would normally take a year or more to accomplish. Mary Ann Gallo, the Chief Communications Officer for Vantara formed an Agile team across all functions in the three companies and our parent company Hitachi, which began 6 months ago.  Mary Ann had this to say about the experience:

 

“Our migration was a true testament to the incredible teamwork we demonstrated at Hitachi Vantara.  It goes without saying that our IT department played a huge role here.  It takes most companies over a year to go through the process that we did in 180 days!  A nimble approach, a clear direction with strategic milestones and small sprints led by a small-but-mighty team made this all come together so quickly and smoothly. The migration was a great example of a cross-functional company-wide effort where everyone worked extremely hard to ensure alignment across the board, communicated thoroughly and effectively, and focused on problem solving and achieving our common goals. The display of participation and teamwork is truly inspiring and emphasizes Hitachi’s commitment to innovation and to our customers.”

 

IT was represented by “T” in this cross functional team so that they were aware of all the other activities involved in marketing, sales, supply chain, HR, legal, DevOp, etc. The plans for the integration and the new name of the company was highly confidential so IT had only 20 days to plan and test the changover. I would say that this was the riskiest part of the migration since our operations and revenue depended on a smooth IT transition. “T” and Ben, said that they worked as an Agile team involving all the levels of IT from service desk to architecture and design. Each day was an agile sprint. This is where the digital transformation that has been going on in IT really showed its worth. I could tell from their excitement in our conversation that this was a challenge that they thoroughly enjoyed. 

 

I asked what they took away from this experience. First and foremost was the digital transformation in IT that laid the foundation for this successful effort. Over a year ago IT began to adopt the Agile methodology, which broke down the operational silos across IT and the rest of the business. Everyone is now working as a team focused on a common goal. IT has also been modernizing their core in their digital transformation effort. During the past year alone, they integrated a new CRM system into the business, migrated the data center from Indianapolis to a hosted facility in Colorado where we are hosting services for other Hitachi Companies, redesigned our website for mobile devices, and moved our email to Office 365 in the cloud. Having made Mobileiron mandatory for email on mobile devices also hleped make the change seamless on mobile devices. They felt that every new accomplishment in their transformation journey helped them execute better on the next challenge and they could see the contributions that they were making to business outcomes.

 

For those of you in the new Hitachi Vantara company, please take some time to thank our colleagues in IT for the smooth transition they made possible in this transformation. I know that there were many of you around the world who worked with IT to make this possible,  so I thank you as well.

 

For those of you outside of our company, think of your IT staff and appreciate what they are doing, even when nothing goes wrong.

This week at Hitachi’s Next 2017 event in Las Vegas, Hitachi Ltd. and Hitachi Vantara announced Hitachi’s first commercial Lumada Internet of Things (IoT) platform offering.

 

In May of last year, Hitachi Insight Group, the global organization responsible for driving Hitachi’s global unified Internet of Things (IoT) business and strategy, introduced Lumada, a data-centric IoT platform. Lumada, which stands for “Illuminate the Data”, is a comprehensive, enterprise-grade IoT core platform with an open and adaptable architecture that simplifies IoT solution creation and customization. Lumada was designed to address the challenges associated with IoT solution creation by leveraging Hitachi’s unique OT and IT expertise and technologies. Lumada is an IoT platform that is designed for co-creation with customers and partners. It’s open and adaptable architecture can apply to a wide range of industries and use cases, where core solutions can be extended or repurposed across multiple verticals or easily tailored to specific situations.

 

On July 12th, Lumada was recognized by the MMIR 2017 excellence award for ICT products and services to support our smart society. MM Research Institute, which is a Marketing Research, Consulting, Promotion, Support and Publishing company with a focus on the Information and Communication Technology (ICT) sector, recognized Lumada for its global business leadership in the IoT area of smart solutions. This award was based on a survey of industry experts through internet questionnaires and direct interviews with companies.

 

Since then, Hitachi has hardened and optimized the Lumada IoT Platform based on numerous

Proof of concept (POC) and co-creation projects with its customers and partners, as well as in

its own factories. Now in its 2.0 release, Hitachi’s Lumada intelligent software platform includes

major upgrades, including new edge, core, analytics and studio components, edge and asset

SDKs, asset avatars, expanded advanced analytics and AI capabilities, feature-rich dashboards

and more. At the same time the Hitachi Insight Group was combined with Hitachi Data Systems and Pentaho to form a single integrated business as Hitachi NewCo to capitalize on Hitachi’s experience in both operational technologies and information technologies.

 

Here is a high level view of the basic components of the Lumada Platform architecture.

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Edge connects to sensor data and transports it securely to the cloud and performs real-time analytics.

Core collects sensor data, manages assets in the field and runs asset avatars. (an avatar is a concept that uses digital information about a product to build a digital twin in virtual space. This concept has been proposed by NASA for its next generation aircraft development).

Analytics analyzes sensor data and refines it for insights using statistical tools and machine learning.

Studio acts on insights. It visualizes data, trends, and insights, issues commands, and automates operations.

Foundry runs industrial –grade software to deploy, repair, upgrade and scale services, security, support and licensing services. It can run in the cloud or on premise.

 

A recent report from IOT Analytics, lists 450 companies in the IoT platform space. Hitachi Lumada is differentiated by three key attributes.

 

Flexible: Most of our competitors have taken a cloud-only approach while a majority of

traditional enterprise and industrial customers we talk to are looking for on-premises deployment to address network latency, telematics costs and security concerns. The Lumada IoT Platform can be configured from a single server node to a cluster of nodes distributed across multiple servers to increase performance and scalability. Its unique modular architecture increases its adaptability to support customers’ existing business and IT environments, helping them to more rapidly achieve highly optimized outcomes

 

Composable: Unlike most IoT platforms on the market today, Lumada is composable and highly adaptable to support customers’ existing environments and business requirements as needed. Its modular, heterogeneous architecture ensures it can work with third-party solutions, giving customers the freedom to build the solution that works the best for their unique needs.

 

Co-creation. The Lumada IoT platform provides an open, flexible and intelligent foundation which allows Hitachi to leverage our extensive OT and IT experience with our customers and partners to co-create and tailor solutions to meet their specific needs. We also offer comprehensive services and support to help in all aspects of co-creation, deployment and even operations as needed

 

The value of an IoT platform is underscored by a recent quote from Christian Renaud, research director, IoT, at 451 Research.

 

“IoT platforms unquestionably have an important role to play in the development and

deployment of IoT solutions. However, they can introduce new layers of complexities, which can hinder the implementation and benefits of the solutions themselves. While it is still very early days in the IoT platform market, the landscape is crowded, making it difficult for new vendors to differentiate themselves. Hitachi’s extensive expertise in OT and IT gives them a unique understanding of the fundamental requirements to build and deploy IoT solutions at scale. This allows Hitachi to help customers get actionable business insight that translates into real business value, faster.”

 

The IoT appliance powered by Lumada reduces the need for specialized IoT and IT skill sets and gives your organization back time that would otherwise be spent loading software and preparing infrastructure for IoT projects. The IoT appliance powered by Lumada answers the question, how do I get started with IoT? Customers looking to further increase the time-to-value of their IoT initiatives can use the Lumada IoT platform in concert with Hitachi co-creation services and leverage Hitachi’s expansive expertise in both OT and IT to create solutions tailored to their unique requirements.

I joined Hitachi Data Systems in 1997 as an open systems storage product manager. Hitachi Data Systems (HDS) was founded in 1989 when Hitachi and Electronic Data Systems (EDS) acquired National Advanced Systems (NAS) from National Semiconductor and renamed it Hitachi Data Systems to market Hitachi’s IBM compatible mainframes. Hitachi’s mainframe used a hybrid CMOS architecture which proved to be much more powerful than IBM’s mainframes, and enabled this new company to gain market share. When I joined HDS at that time, I was the loneliest person in HDS, because everyone was selling multi-million dollar mainframes and no one was interested in selling low cost open systems storage.

 

At that time the company was still a very American company and the Hitachi culture had not yet taken root in HDS. In fact, we preferred to refer to ourselves as HDS, another three letter computer company and our CEO was on rotation from EDS. I joined HDS because I became familiar with Hitachi while I was on assignment in Japan with another computer company and I admired the Hitachi employees and the products that I encountered. I was really impressed with the Hitachi culture and with their storage architecture which separated control from data for increased efficiency and scalability; and I realized that this enabled the elasticity to adapt to future storage technologies.

 

As the mainframe market declined, and the cost of selling IBM compatible systems with the overhead of IBM systems software, made this market unprofitable, Hitachi decided to exit the mainframe business in 1999 and focus on their storage market. I was now in the right place at the right time. At the same time, Hitachi bought out EDS, and we began the journey of becoming a part of the Hitachi family and incorporate the fundamental core values of Wa (Harmony), Makoto (Sincerity), and Kaitaku-Seishin (Pioneering Spirit). In addition to our storage architecture which was ideal for the future of storage area networks and virtualization, we focused on the Data. we were also successful at developing solutions for data management, data governance, data mobility, and data analysis. While originally the name of our company was a combination of Hitachi and EDS, we didn’t have to change the name of the company, since data was now our focus. We were no longer HDS, a three letter computer company, we were a new company, Hitachi Data Systems with the emphasis on Hitachi and Data.

 

Move forward twenty years and the business is entering a new phase, with digital transformation where it is less about products and more about business outcomes. Add to this the convergence of IT and OT and the internet of things, where smart machines become data centers on the edge. Data is still at the core but new systems of engagement, automation, design, and provenance, are changing the requirements for curating, storing, managing, moving, and governing data. Hitachi Data Systems is a recognized leader in the field of information technology (IT), bringing applications, analytics, content, cloud, and infrastructure solutions to market that have transformed the way enterprises do business. However, now is the time to expand our business and seize the opportunities that this new phase presents.

 

These are very exciting times, especially for a company like Hitachi with over 107 year of OT experience and 58 years of IT experience. This gives us the opportunity launch a new company, Hitachi Vantara, to leverage the broad portfolio of innovation, development and experience from across Hitachi Group companies to deliver data-driven solutions for commercial and industrial enterprises. This new company will unify the operations of Hitachi Data Systems, Hitachi Insight Group, and Pentaho into a single integrated business as Hitachi Vantara to capitalize on Hitachi’s experience in both operational technologies and information technologies. While, Hitachi Vantara will continue to provide superior infrastructure, object storage and analytics technologies that enterprises rely on for their mission-critical data in the data center, in the cloud and at the edge, the new opportunity for Hitachi Vantara will be to target the IoT market with a unified approach that will enable our customers to achieve the business out comes that this makes possible.

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Hitachi Vantara President and COO Brian Householder announcing Vantara at Next 2017 in Las Vegas

 

   I am excited and proud to be a part of this new company. Checkout my new business card.

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Researchers at the Queensland Brain Institute (QBI) work to discover the cellular and molecular mechanisms that underlie the ability of the adult brain to generate new nerve cells and form functional connections.  A research team from the Queensland Brain Institute in Australia is working on a breakthrough treatment for Alzheimer’s disease, a form of dementia that takes the lives of more than 40 million people worldwide each year, with an estimated treatment cost of $600 billion. QBI’s treatment is unique in that it makes use of non-invasive high-frequency ultrasound—not drugs—to clear a path for blood proteins to enter the brain and clear out clusters of lesions that cause memory loss and a decline in cognitive functions in Alzheimer’s patients. This may not only cure Alzheimer’s but may reverse its effects. Successful trials were run on mice, but more research had to be done before a human trial can begin due to the thickness of the human skull.

 

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This involves the capture, indexing, storing, sharing and archiving a tremendous amount of data that includes DICOM for human model data, NGS Genome sequencing data, electrophysiology which is the study of the movement of electrical charges in biological tissues, and high end super res + confocal microscopy. Imaging is the biggest driver of data growth and research techniques such as confocal microscopy can quickly eat up gigabytes and gigabytes of data space. Resolutions of images in whole brain imaging workloads can create 140,000 pixels by 70,000 pixels per image.

 

QBI is storing about 7 petabytes of structured and unstructured data. Oracle HSM, Hitachi Accelerated Flash, Hitachi’s VSP G series arrays, and Brocade Gen 6 fibre channel switches help deliver the storage infrastructure needs of the researchers.


Jake Carroll is the senior IT manager (research) at the Queensland Brain Institute (QBI) and he is constantly pushing the boundaries of technology to keep up with this deluge of data and the users of this data. In this research environment, faster and more precise scientific instrumentation is constantly being developed which could double or triple the data load in a matter of months.

 

We were hoping to have Jake Carroll present "Delivering High-Throughput Science with Brocade Gen 6 Fibre Channel and Hitachi Flash Storage " at the Hitachi NEXT 2017 event at 4:50pm on Wednesday September 20 in Las Vegas. Unfortunately, he will not be able to attend, so Corin O'Connell of Brocade and I will present the QBI story.

 

If you were fortunate enough to get a ticket to this event, please attend this session. We are very pleased to be supporting QBI in their research to cure Alzheimers.

In my last few blogs I have been writing about some of the topics that will be covered at Hitachi’s NEXT 2017 event in Las Vegas on September 19 and 20. With this event we hope to show the business world that we are more than just an IT infrastructure company. We are in a digital revolution and we want to show how businesses can innovate and win with the latest solutions and services that are made possible through the integration of information technology and operational technology from Hitachi. Hitachi with over 107 years of operational technology experience and 58 years of information technology experience is unique in its ability to innovate in both these areas and work with you to deliver integrated solutions and services that can help businesses succeed and societies be safer, healthier and smarter.

 

The demand for this event has been so overwhelming that the event is sold out. However, you can still catch the keynote speakers in your office if you go to HitachiNEXT.com on Tuesday, Sept. 19 at 8:30 a.m. Pacific, and again on Wednesday, Sept. 20 at 10 a.m. Of course, it’s not the same as attending the live event, but we don’t want you to miss the valuable insights from our stellar speakers.

 

On Tuesday Sept. 19 from 8:30 to 10:00 (PDT) we will be live streaming the following speakers

 

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Hitachi Ltd President, CEO and Director, Toshiaki Higashihara who will kick off the event with a talk entitled Transformation Today

 

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He will be followed by HDS President and COO, Brian Householder speaking on Unleashing the True Value of Data

 

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HCC President and CEO Hicham Abdessamad will be joined by Bud Denker, Penske Executive Vice President of Penske Performance and Penske Automotive Group and also Senior Vice President of Penske Corporation and will talk about Transformation in Action

 

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The quest key note speaker will by Geoffrey Moore an American organizational theorist, management consultant and author, best known for his work “Crossing the Chasm:” Mr. Moore will talk about Competing to Win in the Age of Disruption

 

This general session will close with the announcement of our Transformation Award finalists.

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On Wednesday Sept 20 from 10:00 (PDT) to 11:15 we will be live streaming the following speakers;

 

A number of Hitachi Technologists will set the stage with The World is the Domain of IT.

 

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Sean Starling, General Manager - Research, Development & Innovation at Meat & Livestock Australia will then talk about The power of Analytics and IoT to Drive Real-World Outcomes

 

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Dr. Michio Kaku a well-known futurist who is professor of theoretical physics, author of three New York Times best sellers on physics, and host of several TV special on BBC, the Discovery Channel, History Channel , and the Science Channel will address What Does the Future Hold? “The Next 20 Years”

 

Dr. Kaku will then be joined on a panel by Senior Hitachi R&D executives to discuss Future Technologies: AI and Robotics. These executive will include:

 

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Dr. Masahiro AOKI is General Manager of the Center for Technology Innovation (CTI) in the Research & Development                Group (RDG) of Hitachi, Ltd., leading a research organization of over 2000 researchers.

 

Dr. Kazuo Yano is a corporate officer of Hitachi, Ltd. and corporate chief scientist of the Research & Development Group. Dr Yano is a recipient of many prestige technical awards and currently is best known for his work in General Purpose Artificial Intelligence.

 

Dr. Umeshwar DAYAL is Senior Vice President, Big Data Lab, and Senior Fellow, Information Research at Hitachi America Ltd. In April 2017, he was also appointed to head the newly announced Insights Laboratory in Hitachi R&D

 

This is a list of speakers that you will not want to miss!

For more information on our Keynote speakers please go to this link and be sure to tune in on HitachiNEXT.com on Tuesday, Sept. 19 at 8:30 a.m. Pacific, and again on Wednesday, Sept. 20 at 10 a.m.

Last week I posted a blog on New Data Sources and Usage Requires New Data Governance where I referred to Forrester researcher, Henry Peyret’s work on researching the need for Data Governance 2.0. He points out the need for adopting to a new data governance framework based upon the new types of data and uses driven by new systems of engagement, automation, and design. I expanded the discussion to include systems of sharing to address the phenomena of blockchain.

 

The industry vertical which is most impacted by the disruptive impact of new systems is the financial services industry. The explosion of regulations which followed the global financial crisis of 2007-2008, the hack attacks that exposed the financial data of millions of people, the increasing concerns for privacy, and the disruptive competition from Fintech startups are driving the need for new data governance. Fortunately, there is a wave of technology that is emerging to help financial organizations understand and manage their risks.

 

This wave of technology is known as "RegTech", for regulation technology. This is a subclass of FinTech, using technology innovation to deliver more efficient and effective solutions for regulatory compliance and monitoring than existing capabilities. Regulatory changes are accelerating driven by new technologies, new business models, and new threats in the financial sector. New approaches will be required for AML and KYC (Anti-Money Laundering and Know Your Customer) using social media and biometrics for due diligence, anti-fraud, and detection of suspicious activity.

 

Here is just a few of the companies who can be classified as RegTechs. While the big focus is on the financial service industry, RegTechs are also addressing other regulated industries like life sciences, Pharma, and HR. A new area for RegTechs are the regulations and risks around the legalization of cannabis by some state governments versus the federal government as you can see in the lower right hand corner of this chart.

 

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Find out how to manage your data governance journey through the intelligent use of RegTech, and how Hitachi can help your organization navigate the complex regulatory landscape by attending RegTech Adoption in Financial Services: Turn Regulation Into Opportunity on Tuesday September 19 at Hitachi’s NEXT2017 event in Las Vegas.

 

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We are pleased to have Nirvana Farhadi Global Head, Financial Services RegTech, Risk and Regulatory Compliance Affairs Hitachi Data Systems, present this session. Nirvana is counted amongst the leading industry voices within regulatory reporting and RegTech. She brings her global experience of working across multiple Financial Services sectors, instruments, products, industry regulations and jurisdictions. Nirvana is also the founder and CEO of FFS-RegTech, which provides specialist advice in the RegTech space. As the former Head of Regulatory Reporting at KPMG, Nirvana has led the business, practice, and development for regulatory reporting at KPMG UK. She has published various industry articles, co-authored the upcoming RegTech book, presents at numerous industry and client roundtables and is a highly sought-after keynote speaker, in relation to her specialist area of expertise. Nirvana is also a Founding Member, of the Committee to Establish the RegTech Council and a lead expert on multiple industry working groups across Regulation, FS Cyber security and Blockchain.

When we talk about Digital Transformation we often talk about the integration of IT and OT as though it is a given. We want to integrate machine data with transaction data to gain better insights into the total business and provide better goods and services. We need to stop and think about what that means and what that entails. We need to start with some definitions and good place to start is with Gartner’s glossary of digital marketing terms.

 

Here are some definitions from this glossary:

 

Operational technology (OT) is hardware and software that detects or causes a change through the direct monitoring and/or control of physical devices, processes and events in the enterprise.

 

Information technology is the entire spectrum of technologies for information processing, including software, hardware, communications technologies and related services.

 

IT/OT integration is the end state sought by organizations (most commonly, asset-intensive organizations) where instead of a separation of IT and OT as technology areas with different areas of authority and responsibility, there is integrated process and information flow.

 

These definitions are pretty straight forward. However, we need go a little deeper. OT systems are used to control devices like motors and other machines and monitor sensors to regulate various processes, detect anomalies, or prevent hazardous conditions. The operating systems technologies and communications protocols that are used for OT have been very different from IT technologies and protocols, since they were focused on specific tasks and operated in real time or near real time. Advances in IT technologies like Intel processors, Linux and TCP/IP are now making it possible to run more OT systems on IT technologies.

 

However, because of its focus on internal, operational processes, OT systems often lack the maturity of IT systems management in terms of enterprise availability, security, governance, and transparency.  Many OT systems use simple passwords for ease of use and do not keep current with software upgrades. The Miriai Malware attack which occurred last year, exploited this by installing a remote bot into OT devices like IP cameras and routers. On October 21, 2016, the bots were activated and caused a Distributed Denial of Service attack against major DNS servers which made several high profile websites like Airbnb and Netflix inaccessible. When we bring OT devices into the enterprise world of IT and networking with the outside world we have to ensure that it does not enable new avenues of attack. This requires rethinking how we manage OT systems in an open enterprise environment.

 

Most OT systems do not use external storage so data simply wraps over itself. In a recent incident at San Francisco airport, an incoming flight almost landed on a taxi runway where three other planes were ready to take off. Luckily, the landing was aborted at the last minute and the lives of the passengers on all four planes were saved. When investigators got around to examining the flight recorder, the data had already been over written by a subsequent flight and valuable investigative information was lost.

 

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As we move to automation like self-driving cars, more data will be created and processed on the edge and decisions must be made as to how we curate the data; what data is thrown away and what data is sent back to the mother ship. A self-driving car may be processing terabytes of data on the fly as it navigates through traffic and it cannot wait for someone in the cloud to process the data remotely to tell it what to do next. There are some fundamental challenges in the growing number of OT connected assets that generate large-volume, high-speed data. We will have to consider new data storage and retention requirements when incorporating OT data into an enterprise governance environment.

 

The integration of IT and OT can be challenging and the degree of difficulty depends on the type of business. Financial services and retail already have a high degree of IT and OT integration while other verticals like healthcare, manufacturing, oil and gas have less integration. Often times the integration is less about the technology and business and more about people. If the operations people are used to running their own systems, it will be difficult to redefine roles and responsibilities.

 

Hitachi is a unique company with over 106 years of experience with OT systems, starting with electric motors and generators, and over 57 years of IT systems experience. We understand the challenges of integrating OT with IT. We will be presenting a number of  use case for IT and OT integration at our NEXT 2017 event in Las Vegas, September 18 to 20.

 

One session you should attend is Unlock a Greater Business Value With Fog Computing by Sudhanshu Gaur Director, Digital Solution Platform Lab Hitachi America Limited, in which he addresses the challenges of a growing number of connected assets with fog computing that distributes various functionalities and applications anywhere along the continuum from cloud to things. Discover how this fast-emerging trend gives you higher scalability, agility, programmability and trustworthiness in industrial IoT systems.

  • See how fog computing uses IT and OT technologies.
  • Improve scalability, agility and programmability.
  • Accelerate product and services rollout

Just over 10 years ago we were looking at two types of data, structured and unstructured data. Anticipating the explosion of unstructured data Hitachi began the development of object storage with rich meta data capabilities to handle the management, search, and governance of massive amounts of data that could no longer be handled by traditional technology architectures and hierarchical file systems. In 2007 we delivered the first version of our object storage platform HCP.

 

Today, there are many more forms of data and data usage that require extensions to how it must be managed and governed. Henry Peyret of Forrester research, has been researching the need for Data Governance 2.0, adapting to a new data governance framework based upon the new types of data and uses. In his research he identifies four different types of data governance by systems of insight. I have taken his four basic systems of insights and expanded on them here:

 

Systems of record. These are our traditional types of structured databases supporting OLTP and OLAP where governance is focused on quality, Master Data Management, and compliance.

 

Systems of Engagement. This is driven by new systems of customer, employee, and partner engagement, social media, chatbots, mobile apps, etc. Here governance deals with the need for data personalization versus the need for data privacy.

 

Systems of Automation. This is driven by IoT integration, OT data, event correlation, analytics and AI. Data governance not only has to be concerned about data context, as Mr. Peyret identifies, but also the source and quality of the data which may be created and processed on the edge of your business or outside of your normal realm of responsibility. What governance is required for an automated system like self-driving vehicles where data compromise may result in loss of life?

 

Systems of design. These are systems for creativity and innovation where the stake holders may be product designers or researchers. Applying standards of data governance to creativity may not be as well defined as in the previous systems. Data governance in this case may entail social, legal, ethical or moral questions.

 

Systems of Shared data. This is a category that I have added to address the phenomena of blockchain. Blockchain is a shared database for recording transactions in a way that does not allow a record to be altered at a later date. Bitcoin is a well-known example of blockchain. It is a system of value transfer that is outside the control of central banks and enables actors to exchange value independent of traditional government or regulatory oversight. While there is probably no way to govern public blockchains such as crypto currencies, there may be requirements for data governance of private blockchains in enterprises or consortium of enterprises. For instance, there are industry discussions about how banks could maintain their own privacy in a shared blockchain database. This begs the question: what is the appropriate regulatory input into a blockchain system that can automatically execute smart contracts?

 

Forrester recommends that vendors should develop a new data governance domain to address these new systems. In the picture below, previous data governance is illustrated by the blue icons, where governance was based on the processing of data and meta data. The new data governance domain shown in green, must now consider data context.

 

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Forrester Henry Peyret, Principal Analyst     

 

Hitachi agrees with this assessment and has expanded their Hitachi Content Platform suite to include Hitachi Content Intelligence to surface business insights and expand the governance domain for new and future systems.

 

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Hitachi Content Intelligence is purpose-built to help you along your governance and analytics journey, regardless of the degree to which these five systems may be integrated into your organizational architectures. With Content Intelligence, Hitachi is focused on helping you answer the following:

 

  1. What value exists in your data or can be extracted from it?
  2. Can you trust the contents of the data?
  3. Based on your data, what has happened, what might happen next, and what is the right
      answer for your business?
  4. Is insight being delivered to the right people at the right time?
  5. How do you embed data analytics more pervasively into your organization?

 

These are questions that are current, and will continue to, plague every modern organization relying on digital assets.  As the producers and consumers of data continue to grow at exponential rates, answering these questions accurately and rapidly will place greater reliance on digital advisory and recommendation solutions.  To that end, not only does Hitachi Content Intelligence help an organization answer those question, it can also be partnered with Hitachi’s Pentaho business intelligence solution. Together, you’ll have your “databases” covered with a navigable view of your data real estate.  Together these solutions deliver:

 

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The regulatory requirements for these new systems are still a work in process in many cases. Data governance will require co-creation as we are charting new territories. By partnering with Hitachi, we can help you discover, assure, describe, predict, optimize, empower, and embed data of the highest quality and relevancy throughout your organization. We will work with you to gain greater data insights and work through new data governance requirements.

Our Chief Technology Strategist Greg Knieriemen recently interviewed Christian Renaud, Research Director of 451 Research’s IoT practice, and Rob Tiffany, our Chief Technology Officer and Global Product Manager for Hitachi’s Lumada IoT platform, who joined us this year from Microsoft where he was the Global Technology Lead for IoT. The topic was the benefits of co-developing IoT solutions to drive better business outcomes. Please take 5 minutes to view this video.

 

 

If you want to hear more about Hitachi's approach to IoT with our Lumada IoT platform? Attend Hitachi's NEXT 2017, September 18 to 20 in Las Vegas.

 

Join Lumada CTO Rob Tiffany for his session on "Choose the Right IoT Platform for Your Business,” at 3:00pm on Wednesday September 20th, as he walks you through the elements of both general-purpose and industry-specific IoT platforms. With literally hundreds of IoT platforms on the market, how do you choose the one that’s right for your business? You’ll discover important things to look for from end-to-end such as performance and scalability needs of global operations and security everywhere. He will cover how to connect old and new machines, analyze data at the edge, bring value to your business with the right analytics and deliver meaningful outcomes. You’ll leave this session equipped to make smart decisions in IoT and digital transformation that will make a positive impact on your business.

 

See you at Next 2017!

Suppose that you are a cool young man strolling on the beach and notice a hot young lady who wants a cold bottle of water. A cold bottle of water is available for a price, but the young lady obviously does not have any money on her person.

 

The chivalrous young man would like to help but he also does not have any money to pay for the water. You are in Luck, if you happen to be in Poland! Watch this video to see how this young man saves the day with the help of Hitachi technology!

 

 

In a distributed digital world, to have 100% identity assurance and authentication is vital to financial and transactional security. Discover the key identity assurance technology that is at the heart of a digital security portfolio: Hitachi’s unique and innovative finger vein biometric technology.

To learn more about this, plan to attend the breakout session by Ben Eddington and Tadeusz Woszcynski of Hitachi Europe on "Strong Authentication via Hitachi Biometric Technology" at  Hitachi's NEXT 2017, September 18-20 at the Mandalay Bay Hotel in LasVegas. Signup now!

Last year I was on a CNN Future Cities Panel in Singapore along with a member of the Singapore government and several startup companies. There the topic of blockchain came up and one of the participants made the assessment than blockchain was a solution looking for a problem, partly in response to all the hype about blockchain at that time and the lack of successful implementations aside from Bitcoin. In August of last year, Gartner published a report which claimed that blockchain had reached the peak of the Gartner Hype Cycle for Emerging Technologies.

 

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By now everyone should have a basic understanding of blockchain technology as a distributed ledger. Bitcoin is the best known application of a blockchain technology, and has been widely publicized as the currency for ransomware and the purchase of illicit goods on the internet. While Bitcoin is based on blockchain technology, there are other types of blockchain technologies, that are more scalable, more efficient, private and public, and more focused on doing good rather than rewarding bad behaviors.

 

A year ago, Bitcoin was starting to see some problems. As the volume of transactions in bitcoin increases, the blockchain becomes longer and longer increasing the time to process transactions. Here is link that shows the increasing transaction times and its erratic behavior over the past month. There are peaks in average confirmation times close to 5 hours and one as higher as nine plus hours. As the volume increases, transaction times will increase even further.

 

The other problem with bitcoin’s blockchain, is known as “counterparty risk”. When you pay for something using Bitcoin, there is no guarantee that the other party will deliver the promised asset. How many companies who paid the $300 in bitcoin ransom to “WannaCry” ever received the decryption key to unlock their data? While there seems to be some code of honor among ransomware thieves to deliver the decryption key, it only emboldens their future activities. There are other blockchain initiatives that address this problem like Hyperledger and Ethereum whose Crypto currency Ether, began to surpass the valuation of Bicoin in the beginning of this year.

 

Bitcoin blockchain also has other limitations like the number of transactions per block, and the total limitation in the number of Bitcoins. Every block introduces 50 new coins in the system. This quantity (50) halves every 210,000 blocks so this geometric progression comes to 21 million Bitcoins in total. Bitcoin has already had two halving events and the current payout is just 12 bitcoins per block. It is estimated to halve again in about 3 years. What happens when you run out of new Bitcoins? The miners who create and propagate the block chain in exchange for bitcoin, will need some other way to get compensation for their efforts or leave the mining business. What happens to the price of Bitcoins in fiat currency? Some believe that it will implode while others think it will continue to increase like a Ponzi scheme, where the initial investors will get richer and richer.

 

Increasing the number of transactions per block would make Bitcoin more scalable, but since transactions in a block chain cannot be modified, creating a new block size with more transaction would require a new blockchain. This is known as “forking”. On the first of August, Bitcoin got forked, meaning that a new cryptocurrency, called Bitcoin Cash was created and has begun to be mined as a separate blockchain from Bitcoin. Bitcoin cash is built on the same blockchain network as bitcoin, but the new software increases the number of transactions per block that make up the network to allow it to process more information and increase transaction speed. Prior to August 1st, many in the Bitcoin business community like Circle warned against the potential negative consequences of Bitcoin forking and were advising their users to convert to fiat currencies like dollars or euros before the fork. Now almost a month after the fork what did this do to Bitcoin?

 

After an initial dip in price, Bitcoin rallied and accelerated even higher to hit $4,305 by August 18!  (The price of Bitcoin on January 1, 2017 had hit, what was then an all-time high, of $1000”.)  Bitcoin Cash was initially slow in getting miners to participate in creating and propagating the new blockchain, but was up to $499 by the same date in August. Meanwhile, Ether, the cryptocurrency for Ethereum, which was poised to overtake Bitcoin in valuation earlier this year is still in second place with a price of $320.

 

Crypto currencies can be exchanged at various online exchanges. These exchanges are beginning to act like a central ledgers, which is contrary to the distributed ledger reason for having a blockchain. Also the cost of a Bitcoin transaction is rising. The median transaction value is about $500 and incurs about a $4 fee. This is based on value of transaction and amount of data in it. Just two years ago, the costs were almost negligible. So what started out as “free money transfers” to beat banks and credit cards, is looking a lot like the same old thing. https://bitinfocharts.com/comparison/bitcoin-transactionfees.html

 

The crypto currency hype trend continues and seems to be accelerating. While cryptocurrencies are leading the blockchain surge, the use of blockchain in other areas are still mostly in proofs of concept stages. However, once we see some first movers deliver new blockchain solutions, we may see another surge in blockchain hype. I think we are a few years away from the “Trough of Disillusionment” before we see the “Slope of Enlightenment” and the “Plateau of Productivity” per Gartner’s Hype cycle for emerging technologies. Is it possible that Blockchain will skip the intermediate stages and go directly to the Plateau of Productivity? There is a lot of confusion about the future of Blockchain, fueled by a lot of speculation.

 

See what Hitachi’s David Pinski, Chief Strategist Financial Services – Center for Social Innovation Hitachi, has to say about Blockchain for the Real World at Hitachi’s Next 2017 event, September 18 to 20 in Las Vegas. Register now.