Tag Archives: technology

Microsoft SONiC Souring Arista’s ‘Secret Sauce,’ Sending Stock Down

Arista Networks’ stock plummeted Monday after Jefferies lowered its price target, questioning the outlook for future sales to its No. 1 customer, Microsoft. Analyst George Notter, writing in a research report, reiterated Jefferies’ underperform rating on Arista ( ANET ) and sharply lowered his price target to 40.25 from 52.50. He said Microsoft’s SONiC “announcements are troubling for Arista,” referring to that company’s software for open networking in the cloud. Arista stock was down more than 10%, near 56.50, in early afternoon trading in the stock market today , 35% off of a 16-month high hit in June. Arista shares — which went public in June 2014 at 43 — touched an all-time low of 52.59 on Feb. 9 of this year. Switching rival Juniper Networks ( JNPR ) was down 1.5% Monday afternoon, and and bigger competitor  Cisco Systems ( CSCO ) was off a fraction, as Notter said they have less exposure than Arista to an anticipated decline in switching revenue with Internet content provider customers, though they too are exposed. In his research note Monday, Notter said last Wednesday’s Linux-based Open Compute Project (OCP) Summit in San Jose, Calif., made Jefferies “much more concerned about Arista’s business at major customers such as Microsoft ( MSFT ), Facebook ( FB ) and Apple ( AAPL ).” That’s because Microsoft had just demonstrated SONiC, free software-defined networking (SDN) that makes high-speed switches unneeded. Cisco, Juniper and Arista all make such switches, but “in Arista’s case, the Web scale operators account for roughly 25% (or about $200 million) of the company’s revenue stream — all in switching,” said Notter. He cited Cisco as saying “several quarters ago” that about 5% of its overall switching business, or “roughly” $700 million annually, comes from Internet content providers. For Juniper, it’s about 20% (or $970 million) of total sales, Notter noted. “For us, the big ‘wow’ moment at the (OCP) show was our trip through Microsoft’s SONiC-themed booth,” Notter wrote. “We saw the operator demonstrating SONiC running on switch hardware from Arista, Juniper, Centec, Mellanox ( MLNX ) and Dell — with different ASICs  (application-specific integrated circuits )  including Broadcom ( AVGO ), Barefoot Networks and Mellanox. The development of SONiC/ACS (Azure Cloud Switch) and SAI (switch abstraction interface) software now allows buyers to mix and match these components. “More pointedly, Arista is allowing Microsoft to use a hardware-only solution (i.e. without EOS, Arista’s extensible operating system). Based on all the activity at Microsoft, it’s our view that — over time — all (or nearly all) of their switch deployments will migrate to white box hardware + SONiC.” He said Microsoft accounted for 12% of Arista’s 2015 sales of $838 million. Wait, it gets worse: “Microsoft noted that they are now running SONiC in their production environment (although we presume the extent of the deployment is still small). We understand that Microsoft plans to expand the software platform quite rapidly across all of their data centers,” Jefferies’ Notter said. What’s bad for Arista may be good for Mellanox, however. “Separately, a number of industry contacts are saying that Microsoft is very interested in using Mellanox’s Spectrum switching ASIC,” Notter said. Mellanox stock was up a fraction Monday afternoon. Jefferies maintains hold ratings on Juniper and Mellanox and an underperform on Microsoft, but it rates Facebook stock a buy. Image provided by Shutterstock .

‘Walled Gardens’ Of Facebook, Google Hold Keys To Targeted Ads

Is the person who viewed those leather boots on a laptop the same shopper who browsed the pricey footwear from a desktop but ended up buying the product using a tablet? That tricky question is behind the rise of cross-device tracking tools, and it’s the reason why popular “walled-garden” sites like Facebook ( FB ) are gaining in the digital ad game. In the past, cookies were the universal bread crumbs of the Internet, helping advertisers find out which websites a particular user favored. Cookies are tiny text files that let websites recognize users — usually by their IP (Internet protocol) address — when they return to a website, thus learning their preferences. With this data, companies can serve targeted ads — ads that they believe are most likely to lead to a sale. With the transition of Web users to mobile devices and apps, cookies aren’t as effective, and advertisers are looking for new ways to identify users and learn their preferences. “When you understand who a user or person is, you can provide them with more relevant advertising or more personalized information if you are a publisher. That identity is potentially helpful to improve the experience,” Greg Sterling, vice president of strategy and insights at the Local Search Association trade group, told IBD. Determining which exact ad prompted a shopper to buy, a process called attribution, “is the holy grail of advertising right now. It’s what everybody needs to understand,” Anna Bager, senior vice president and general manager of mobile and video at the Interactive Advertising Bureau trade group, told IBD. Learning more about cross-device attribution is high on the must-do list for many ad pros this year, marketing firm Rocket Fuel said in a research report last month. A Rocket Fuel survey found that ad professionals also intend to learn more about data management platforms in 2016. DMPs help businesses get a panoramic view of their customers by collecting marketing information from a variety of channels, such as websites, emails and mobile ads. But first, advertisers want to be certain of just who those shoppers are. “The technology and the different methods to identify people across devices in the aggregate have become more sophisticated,” said Sterling, who calls Facebook the leader in multichannel identification. “You have to sign in to use Facebook, so they will know if you’re on a desktop computer, a laptop or a mobile device,” Sterling said. “They can provide whatever experience they want to provide because they know who you are, and there’s persistent identity there.” But Sterling says that the shift from using just one device to seeking content from a hodgepodge of desktops, laptops, tablets and smartphones has created “blind spots (where) people are not revealed to a Website publisher or a marketer. Somebody may sign in on one site and then go on to use the site on a mobile device and not sign in.” This trend is putting cross-device technology into the spotlight, as digital advertising, including mobile advertising, continues to boom. One trend is programmatic ad buying, where software determines ad buying and placement. It works best with ads targeted to user preferences, no matter the device used. Ad Firm Criteo Predicts User Behavior Market research firm eMarketer estimates that programmatic digital display ad spending in the U.S., which reached $15.43 billion last year, will rise to $21.55 billion this year and $26.78 billion in 2017. Paris-based ad tech firm Criteo ( CRTO ) says its cross-device advertising tools work anywhere online, including on the mobile Web and inside apps. While cookies are a common standard used to identify and follow users in a browsing environment, that information can be “captured through other mechanisms when you are in applications,” Criteo CFO Benoit Fouilland told IBD. “Our technology focuses on predicting the behavior of the user based on shopping intent information. That’s an area where we are developing pretty unique capabilities. “There are not many players in the industry able to develop cross-device capabilities. We are one of those few companies and we are investing significantly in this area of what we call ‘universal matching.’ ”   Top social networks Facebook and Twitter ( TWTR ) are expected to emerge as big winners in 2016, as digital display-ad spending, which includes mobile ads, overtakes search-ad spending in the U.S. for the first time, according to separate reports this year from Cowen and eMarketer.  Google owner Alphabet ( GOOGL ) is seen as another winner, with its browser and slew of email, search and other services that have users logging in with their Google passwords. Facebook remains a dominant pick of the ad buyers surveyed, Cowen’s report said, followed by Twitter, LinkedIn ( LNKD ), Facebook-owned Instagram and privately held social sites Pinterest and Snapchat. EMarketer predicts that 2016 will be pivotal for Facebook; it’s the first year in which more than half of the U.S. population is expected to use the social network. Facebook will capture 73% of social network ad spending in the U.S., or $9.9 billion, this year, eMarketer said last month. Twitter will be a distant No. 2, getting 14% of social network ad dollars, or $1.9 billion. The research firm also says that nearly 53% of U.S. mobile phone users will log onto Facebook at least once a month this year. Google is expected to remain No. 1 in 2016, with a 33.3% share of mobile ad revenue globally, eMarketer said in a report in March. It says that No. 2 Facebook’s share will reach 17.7% this year. User Tracker Methods: Deterministic And Probabilistic To learn user identities across devices, measurement companies rely on two methods — “deterministic” and “probabilistic.” Deterministic matching is at the core of the formidable cross-device matching success of Facebook, Google, Amazon.com ( AMZN ), eBay ( EBAY ), Twitter and other so-called Walled Garden sites, eMarketer analyst Lauren Fisher said in an online seminar in January. Walled Gardens are websites and apps that require passwords for entry and have a treasure trove of information about users, making it easier to match consumers across multiple devices. So, in a nutshell, trackers can pretty much determine who a user is. In being able to identify users, Walled Gardens are “not 100% percent, but press close,” Fisher said in the seminar. “Think about it — even now retailers are making a practice of requesting email addresses when you check out in a store. “If I have Facebook on my tablet, on my phone, on my laptop at home and on my work computer, then Facebook knows all those devices belong to me because I’m logged in and they’re using that login to tie everything together.” Fisher says eMarketer believes “advertisers are going to continue to flock to the Walled Gardens throughout 2016.” While nearly foolproof, the shielded deterministic method used to match, measure and target customers can’t be used on Web properties outside of the Walled Gardens. That’s where probabilistic identity matching comes in. Companies using the probabilistic method analyze wider, non-proprietary digital tip-offs that people leave behind online when they have not used a sign-in. Such data could include which Web browser version a person uses, their physical location and their go-to content sites through use of cookies and such technology. With these methods, tracking is a more of a probable than a determined fact. “When companies start to collect that information and analyze it over time, they can begin to say with a certain amount of probability that a particular device belongs to a specific individual,” Fisher explained. Some Web publishers rely on both the deterministic and probabilistic methods to cross-check and boost their device matching accuracy, Fisher said. “The bottom line,” said Fisher, “is there’s no right or wrong approach.”

Vinyl Records, Record Players Singing New Tune: Back In Groove

It seems like Bob Seger was being prophetic when he sang the opening lyric of “Old Time Rock and Roll”: “Just take those old records off the shelf.” Vinyl records are making a comeback. The old “8 records for a penny” Columbia House Record Club and its parent companies have gone through bankruptcy, but the newest owner has plans to relaunch a record service, as hinted at by the “coming soon” on the columbiahouserecordclub.com website.  (Competing record subscription services cost about $30 a record, so don’t expect “8 records for a penny.”) With two subscription-record services operating and plenty of vinyl records available in used-record shops and online, now might be a good time to re-evaluate you audio equipment. We put together a list of some reasonably-priced audio setups that would let you pull those old records off your shelf: 1) If you’re going to play records, you need a turntable. The one we chose is the Audio Technica AT-LP60 USB, which sells for about $95. This model has a built-in phono preamp so you can use it with an amplifier or receiver that doesn’t have an input for a turntable. It comes with several adapter cords, so it can also be used with just a set of powered speakers. It also has a USB output, so you can plug it into your PC or laptop and record your records with the included Audacity software. The turntable is belt driven and has controls for speed (33 1/3 or 45 RPM), record size (7 or 12 inches) and on/off. There’s also a lever to raise and lower the tonearm so it can positioned over the record. 2) If you’re using the turntable with a pair of unpowered speakers, you’ll need an amplifier or receiver (which contains a radio tuner). For our setup, we chose a $120 Griffin Technology Twenty Digital Audio Amplifier. This stereo amp has inputs for an optical connect used with devices like a game console or Apple ’s ( AAPL ) Apple TV, and a 3.5 mm adapter so you can use your turntable. It puts out 20 watts per channel, and has an output jack to add a subwoofer for even better low-end sound. It has Bluetooth, so you can pair the amplifier with your smartphone or tablet and play the music stored on those devices. 3) With the turntable and amplifier, you’re going to need a nice pair of speakers. Monoprice, owned by Blucora ( BCOR ), has a stylish pair of two-way bookshelf speakers for just under $100. “Two-way” is audio-speak for saying there are two speakers inside of each cabinet. Each brushed finished black speaker measures 9.9-by-6.1-by-10.5 inches and weighs a hefty 8.5 pounds. With a 5.25-inch woofer and a 1-inch tweeter, these easy-to-hook-up speakers sound even better than they look. No speaker wire, which is needed to connect the speakers with the amplifier/receiver, was included with our review speakers, so figure on ordering some. 4) If you want to do without the amplifier completely, consider the $249 Grace Digital Bluetooth speakers. One of the speakers has a built-in amplifier that powers both speakers with 18 watts each. These bookshelf speakers are a bit smaller than the ones from Monoprice, measuring 8.5-by-4.6-by-7.5 inches, but at 8.6 pounds they weigh a tad more. Inside each speaker cabinet are a large magnet 3.5-inch woofer and a 1-inch tweeter. The controls are positioned at the top of the left speaker and include volume and audio source. The input is 3.5 mm jack, and while the Grace Digital speakers include an adapter, it’s the wrong one for the Audio Technica turntable. The adapter included with the turntable, however, worked just fine. The speakers have another advantage — built-in Bluetooth, so you can sync up your smartphone or tablet and play music stored on those devices as well as play records. Connect one speaker to the other (speaker wire is included), plug in the turntable or sync your mobile device, and you’re good to go. 5) Last but not least, if all you want to do is listen to your old records without fussing with components, we tested an updated record player — the Archer Turntable Home Stereo System from Canada-based Electrohome. For about $100, this small-suitcase-sized phonograph has a good quality turntable, stereo speakers, a USB plug so you can connect it to your PC and make MP3s to listen to your “records” on the go, and an AUX input so you can plug in a smartphone or tablet to listen through the Archer’s stereo speakers. While the turntable and speakers aren’t quite the same quality as the components we tested, the whole system, ready to use out of the box, costs less than just the Audio Technica turntable. For a hundred bucks, you’re up and listening in minutes. Not a bad deal.