The Geek’s Reading List – Week of April 29th 2016

The Geek’s Reading List – Week of April 29th 2016

Hello,

I have been part of the technology industry for a third of a century now. For 13 years I was an electronics designer and software developer: I designed early generation PCs, mobile phones (including cell phones) and a number of embedded systems which are still in use today. I then became a sell-side research analyst for the next 20 years, where I was ranked the #1 tech analyst in Canada for six consecutive years, named one of the best in the world, and won a number of awards for stock-picking and estimating.

I started writing the Geek’s Reading List about 12 years ago. In addition to the company specific research notes I was publishing almost every day, it was a weekly list of articles I found interesting – usually provocative, new, and counter-consensus. The sorts of things I wasn’t seeing being written anywhere else.

They were not intended, at the time, to be taken as investment advice, nor should they today. That being said, investors need to understand crucial trends and developments in the industries in which they invest. Therefore, I believe these comments may actually help investors with a longer time horizon. Not to mention they might come in handy for consumers, CEOs, IT managers … or just about anybody, come to think of it. Technology isn’t just a niche area of interest to geeks these days: it impacts almost every part of our economy. I guess, in a way, we are all geeks now. Or at least need to act like it some of the time!

Please feel free to pass this newsletter on. Of course, if you find any articles you think should be included please send them on to me. Or feel free to email me to discuss any of these topics in more depth: the sentence or two I write before each topic is usually only a fraction of my highly opinionated views on the subject!

This edition of the Geeks List, and all back issues, can be found at www.thegeeksreadinglist.com.

Brian Piccioni

 

 

1)          SWIFT warns customers of multiple cyber fraud cases

A few weeks ago we carried the story of a Bangladesh Bank which had been a victim of cyber theft to the tune of $81M, though the entire scam could have netted $1B. Attention focused on the bank as it is associated with a 3rd world country. It is increasingly looking like that theft is known only because it was spotted – it turns out criminal groups have been using SWIFT to pull off all kinds of mega thefts and these were either unnoticed or unreported.

“SWIFT, the global financial network that banks use to transfer billions of dollars every day, warned its customers on Monday that it was aware of “a number of recent cyber incidents” where attackers had sent fraudulent messages over its system. The disclosure came as law enforcement authorities in Bangladesh and elsewhere investigated the February cyber theft of $81 million from the Bangladesh central bank account at the New York Federal Reserve Bank. SWIFT has acknowledged that the scheme involved altering SWIFT software on Bangladesh Bank’s computers to hide evidence of fraudulent transfers. Monday’s statement from SWIFT marked the first acknowledgement that the Bangladesh Bank attack was not an isolated incident but one of several recent criminal schemes that aimed to take advantage of the global messaging platform used by some 11,000 financial institutions.”

http://www.reuters.com/article/us-cyber-banking-swift-exclusive-idUSKCN0XM2DI

2)          Windows 10 will no longer let you Google search from Cortana

The announcement that Microsoft would limit the use of its Cortana agent to its own search engine led to howls of outrage online. After all, isn’t this the old Microsoft monopoly exerting its market power over its customers? Well, yes and no: the company is simply employing the same tactics used by Apple in particular, but Google as well. I use Google voice a fair bit and I don’t know if I have an option as to what search software or navigation tool it uses. The interesting thing is the rise of smartphones, tablets, and Chromebooks means it is hard to make a case Microsoft has a monopoly on anything.

“Microsoft is closing off one of the easiest ways to Google search in Windows 10. The company has announced in a blog post that starting today, it will block the ability to perform third-party searches through the Cortana digital assistant, as part of an effort to maintain an “integrated search experience.” The move comes in response to a number of recent workarounds, which used browser extensions or even registry edits to establish Google as the default engine for Cortana searches instead of Bing.”

http://www.theverge.com/2016/4/28/11532474/windows-10-block-google-search-cortana-bing-edge

3)          Black Duck and North Bridge find that today, and tomorrow, belongs to open source

Even though I hear investors dismissing Free Open Source Software (FOSS) the fact is that most of the Internet and the majority of mobile devices run FOSS. I’m sure that there are still people using proprietary compilers or development platforms but why develop on those when similar products are available as FOSS? It’s possible we have passed a tipping point: one thing about FOSS in general is that there is a huge amount of online support out there so in many ways it is easier to use than proprietary equivalents.

“I told you a while back that open-source development methods and open-source software ruled the IT world. It’s nice to know that what I saw as an individual was also clear to the corporate world. Black Duck, a leader in securing and managing open-source software, and North Bridge, an inception-to-growth venture capital firm, just released the results of their 10th Future of Open Source Survey. Guess what? They found open source is today’s preeminent architecture. It’s the foundation for nearly all applications, operating systems, cloud computing, databases and big data. To be exact, the survey revealed that 65 percent of companies are using open source for development, while 55 percent are using it in their production infrastructure. Based on what I’ve seen, that’s an underestimate. Even now many companies contain open-source skunkworks running production systems beyond the sight of CIOs and CFOs.”

http://www.zdnet.com/article/black-duck-and-north-bridge-find-that-today-and-tomorrow-belong-to-open-source/

4)          Elon Musk: Tesla’s Autopilot is twice as safe as humans

This little nugget caused a storm of excitement online, and, as is characteristic with any comment by Musk, was repeated slavishly with no criticism. If you think about it, the headline itself is absurd: assuming fault is split 50/50 and only a tiny percentage of cars are Teslas, then it would have to be almost perfect to avoid half of collisions. Regardless, the content of the article shows the claim is unfounded blather: you cannot conclude anything from the claim “the probability of having an accident is 50 per cent lower if you have Autopilot on” because what matters is the accident rate under similar conditions on and off. I typically use cruise control when driving under ideal conditions on highways which is the safest route to travel cruise control or not. The safety does not arise from the use of cruise control but the fact it is a divided highway with no intersections. Thanks to Paul Lee for this item.

“Autonomous cars and self-driving features in the main still need to win over public trust. But Tesla’s Autopilot feature – which gives cars partial autonomy – is 50 per cent safer than a human driver, according to chief executive Elon Musk. “The probability of having an accident is 50 per cent lower if you have Autopilot on,” said Musk, speaking at an energy conference in Oslo, Norway. “Even with our first version, it’s almost twice as good as a person.” Drawing on early data from Tesla’s cars, Musk said that the average number of kilometres driven by a car before an accident was almost double when Autopilot was switched on.”

http://www.telegraph.co.uk/technology/2016/04/25/elon-musk-teslas-autopilot-makes-accidents-50pc-less-likely/

5)          Volvo autonomous car engineer calls Tesla’s Autopilot a ‘wannabe’

I rather object to Tesla’s advanced safety package being called an “autopilot” because it isn’t – it’s an advanced safety package with limited function that should not be confused with a self-driving car. As this engineer explains, a driver whose attention is not needed is not going to pay attention and therefore the system essentially lulls drivers into a false sense of security. The problem, of course is that the final 10% of the problem to produce full autonomy is the hard part.

“”It gives you the impression that it’s doing more than it is,” says Trent Victor, senior technical leader of crash avoidance at Volvo, in an interview with The Verge. “[Tesla’s Autopilot] is more of an unsupervised wannabe.” In other words, Tesla is trying to create an semi-autonomous car that appears to be autonomous. Victor says that Volvo believes that Level 3 autonomy, where the driver needs to be ready to take over at a moment’s notice, is an unsafe solution. Because the driver is theoretically freed up to work on email or watch a video while the car drives itself, the company believes it is unrealistic to expect the driver to be ready to take over at a moment’s notice and still have the car operate itself safely. “It’s important for us as a company, our position on autonomous driving, is to keep it quite different so you know when you’re in semi-autonomous and know when you’re in unsupervised autonomous,” he says.”

http://www.theverge.com/2016/4/27/11518826/volvo-tesla-autopilot-autonomous-self-driving-car

6)          Mercedes home batteries are a potential rival for Tesla’s Powerwall

It turns out that putting a battery in a box with an inverter and a battery charger is not in fact that complicated. After all, that is what an Uninterruptible Power Supply (UPS) is: I have had 3 in my house for years and hundreds of thousands of really big one have been in use in data centers for years as well. Mind you, whether Tesla or Mercedes Benz I would no sooner put a large lithium ion battery in my house than a propane cylinder. You should see those things light up in a fire – plus you can’t extinguish them with water http://batteryuniversity.com/learn/article/safety_concerns_with_li_ion.

“The batteries developed for the high demands of all-electric Mercedes-Benz cars are finding a new application as in-home energy storage units. Sound familiar? Yeah, it’s a lot like the Tesla Powerwall. Mercedes-Benz parent company Daimler AG announced that the storage units are being manufactured by its subsidiary Deutsche ACCUMOTIVE (Daimler has a real love of all caps). The batteries are being sold, installed and supported by partners like utility and solar tech companies. That makes sense, because the storage units are usually installed along with solar panels. The units are already available in Germany, and Mercedes says it will be expanding the program internationally.”

http://www.goreadus.com/technology/mercedes-home-batteries-are-a-potential-rival-for-teslas-powerwall/

7)          After Netflix crackdown on border-hopping, Canadians ready to return to piracy

Reasonably priced access to content is the ideal countermeasure to online piracy. In Canada it is not currently illegal to access pirated streaming content even though downloading that content is (streaming does not entail downloading). The bad guy here isn’t Netflix: content is usually licensed by geography and the company is probably complying with demands from the licensors who are, in turn, responding to complaints from other licensees. Two things will happen: piracy will increase and the government will introduce legislation making streaming pirated content illegal.

“Since mid-January, the streaming service giant is cracking down on border hoppers by blocking access to foreign content. Netflix made the sudden move reportedly at the behest of Hollywood studios who demand country-exclusive licensing agreements. But this big and bold clampdown may backfire — at least in Canada. Turns out, Canadians are big pirates at heart. Apparently, we feel somewhat entitled to download illegal content when we don’t have cheap and easy access. Instead of shelling out $10 for a Netflix subscription, some people now may opt to pay nothing at all to get what they want.”

http://www.cbc.ca/news/business/netflix-piracy-content-vpn-1.3548476

8)          The future of TV is arriving faster than anyone predicted

Cord cutting is simply a modification of the distribution channel for video content from a broadcast model to a “watch what you want when you want to watch it” model. This will provide much opportunity for content creators who were frozen out of the traditional channel because if you didn’t get picked up by a cable channel you couldn’t sell your content. Needless to say, it poses a threat for the producers of lowest common denominator type content.

“Late last week, Comcast announced a new program that allows makers of smart TVs and other Internet-based video services to have full access to your cable programming without the need for a set-top box.  Instead, the content will flow directly to the third-party device as an app, including all the channels and program guide. The Xfinity TV Partner Program will initially be offered on new smart TVs from Samsung, as well as Roku streaming boxes.  But the program, built on open Internet-based standards including HTML5, is now open to other device manufacturers to adopt.”

https://www.washingtonpost.com/news/innovations/wp/2016/04/25/the-future-of-tv-is-arriving-faster-than-anyone-predicted/?tid=sm_fb

9)          Disney, CBS, Viacom worry FCC cable box proposal would do to TV what iTunes did to music

Back in the olden days it was illegal to attach your own telephone to the phone company’s network. This meant phone rentals were an enormous cash cow for the telephone companies and it also meant there was virtually no innovation in the technology. As the market opened up, consumers save a lot buy buying and now we quickly had all manner of land line phones. The same threat faces cable companies in the even they are required to allow consumer to pick and choose their cable boxes. The real “danger” to the cable company is the loss of a high margin revenue stream they have done nothing to earn.

“In a joint filing last night, a coalition of huge media companies including Disney, CBS, and Viacom told the FCC that they oppose its plan to open up cable boxes, according to the Los Angeles Times. The comment, which does not appear to be available publicly yet, reportedly argues that the plan would destroy a major source of revenue for cable companies, TV networks, and the studios producing their shows.”

http://www.theverge.com/2016/4/23/11494026/comcast-disney-cbs-viacom-oppose-fcc-set-top-box-proposal

10)      Businesses pay $100,000 to DDoS extortionists who never DDoS anyone

A DDoS is when a business’s servers are overwhelmed with bogus traffic, blocking access to legitimate traffic. DDoS tools are readily available for download but you need to co-opt a lot of computers to run those tools in order to have an impact. One scam is to threaten DDoS unless a ransom is paid. These hackers skip the middleman and don’t bother with DDoSing anybody, which is pretty devious. I mean who can you trust if you can’t trust a blackmailer? One note is that major cloud providers are never DDoSed because you can’t put together enough resources to make a dent, plus they have all kinds of sophisticated counter measures. That makes public cloud services even more attractive.

“In less than two months, online businesses have paid more than $100,000 to scammers who set up a fake distributed denial-of-service gang that has yet to launch a single attack. The charlatans sent businesses around the globe extortion e-mails threatening debilitating DDoS attacks unless the recipients paid as much as $23,000 by Bitcoin in protection money, according to a blog post published Monday by CloudFlare, a service that helps protect businesses from such attacks. Stealing the name of an established gang that was well known for waging such extortion rackets, the scammers called themselves the Armada Collective.”

http://arstechnica.com/security/2016/04/businesses-pay-100000-to-ddos-extortionists-who-never-ddos-anyone/

11)      German nuclear plant infected with computer viruses, operator says

Well this is pretty reassuring but not at all surprising. After all, Iran’s nuclear program was slowed down for a while by malware which infected its control systems. The difference is that while the nuclear plant computers were infected it was run of the mill, PC related malware not something targeting their control systems. Unfortunately, that doesn’t mean that malware couldn’t be used to target their control systems. In a situation such as this you need to “air gap” everything and rigorously verify everything is clear.

“A nuclear power plant in Germany has been found to be infected with computer viruses, but they appear not to have posed a threat to the facility’s operations because it is isolated from the Internet, the station’s operator said on Tuesday. The Gundremmingen plant, located about 120 km (75 miles) northwest of Munich, is run by the German utility RWE. The viruses, which include “W32.Ramnit” and “Conficker”, were discovered at Gundremmingen’s B unit in a computer system retrofitted in 2008 with data visualization software associated with equipment for moving nuclear fuel rods, RWE said. Malware was also found on 18 removable data drives, mainly USB sticks, in office computers maintained separately from the plant’s operating systems. RWE said it had increased cyber-security measures as a result.”

http://www.reuters.com/article/us-nuclearpower-cyber-germany-idUSKCN0XN2OS

12)      OnHub Keeps Getting Better – Now Supports IFTTT

This is the first I’ve heard of IFTTT, but I am sure it will become a standard feature of all routers soon enough. As for the OnHub router, well it might look nifty but the price is not: US$200 is a lot of money for a router and, while IFTTT is an interesting feature, online reviews note that, for an expensive router, there are a lot of mainstream functions missing from the device.

“OnHub isn’t like other routers. Not only does it support super fast Wi-Fi and is easy to set up, but it also has software that updates itself regularly. This way, you can can get automatic security updates as well as new features that make OnHub even smarter and better. Over the last few months, we’ve updated OnHub to support Guest Wi-Fi, the innovative On.Here interface, and automatic band steering. Today, we’re excited to announce that OnHub is the first router to support IFTTT. IFTTT (pronounced like “gift” without the “g”) is a service that allows you to create simple commands, called “Recipes,” to control and automate basic tasks and devices in your home.”

https://on.google.com/hub/blog/2016-04-28/onhubifttt/

13)      Social media struggling to earn consumers’ trust, according to survey

When your business model involves taking people’s personal information and selling it to other businesses, you are probably not deserving of trust. I confess I don’t see the point to social media but I do see the need for some degree of privacy. Obviously I am in the minority, but you have to ask yourself if you don’t trust Facebook, why on Earth would you be a member fo Facebook?

“When it comes to social media, the low level of trust has a lot to do with the business on which it is based: advertising and specifically the collection of personal information crucial to advertisers that want to target messages to the right people. It may be entertaining to share pictures on Instagram, send goofy doodles to friends on Snapchat and announce an exciting life event on Facebook – but people are wary of how the information they share is being collected, whether it is safe and how advertisers are exploiting it to sell them things. … That matters because a dearth of trust can affect people’s attitudes towards the messages they receive through social media. More than 50 per cent of people surveyed last year by Gandalf Group on behalf of Advertising Standards Canada, said ads they see online are not trustworthy. Roughly 60 per cent said they were very or somewhat uncomfortable with truth and accuracy in social media ads, specifically.”

http://www.theglobeandmail.com/report-on-business/industry-news/marketing/social-media-struggling-to-earn-consumers-trust-according-to-survey/article29755732/

 

14)      iTunes is 13 years old—and it’s still awful

My one and only experience with Apple software was with iTunes. You needed it to put music on your iPod and I figured “how bad can it be”, especially since I had heard so much about how wonderful Apple software was compared to typical Windows software. Well, it was pretty awful. In fact I’d argue that iTunes is almost as bad as Adobe software in general, requiring almost weekly updates, forever shifting its user interface, features and so on. My experimentation with iPods lasted exactly as long as it took to find a mobile phone with the same function, thereafter the iPod went into a drawer and iTunes was erased from all my computers.

“For 13 years—15 if you count the two years the program was just a file-storing service—users have grumbled loudly about iTunes’ unwieldy interface, its bloated features, its inability to simply get better. Companies, however great, sometimes fail to improve their products; and iTunes has been Apple’s great big software mess-up. (Well, that and Maps.) … That’s largely because, instead of trying to streamline the service over the years, Apple has opted to stuff an overwhelming number of new features—movies, television shows, podcasts, mobile apps, and most recently, Apple Music—into it. The company gave its designers “an impossible task: cramming way too much functionality into a single app,” says Marco Arment, the software developer behind Tumblr and Instapaper.”

http://qz.com/666078/itunes-is-13-years-old-today-and-its-still-awful/

15)      Intel Proposes to Use USB Type-C Digital Audio Technology

It sort of looks like an unstoppable force: the perfectly suitable and very cheap headphone jack will be replaced by an expensive and intrinsically more fragile USB-C connector because that will allow a number of features I assure you few people will have the slightest interest in. In terms of audio quality, for the most part that is governed by the quality of the codec more than the interface, and digital headphones are bound to be more costly than analog ones. Just think: if you have only one USB-C connector you won’t be able to charge and listen at the same time. Hopefully manufacturers will see the silliness and keep an audio jack, even if they support this new standard.

“In fact, USB-C can be used to transfer analog audio in accordance with the specification of the connector. It all comes down as to how that audio is transmitted. The USB-C has sideband use pins (SBU1 and SBU2) which can be used for analog audio in audio adapter accessory mode. Use of the sideband pins should not impact data transfers and other vital functionality of USB-C cables, which should make them relatively simple from the engineering point of view. In this case, the USB-C connector will just replace the 3.5 mm mini jack and may even gain some additional features, such as a thermal sensor in an earpiece could measure temperature for fitness tracking.”

http://www.anandtech.com/show/10273/intel-proposes-to-use-usb-typec-cables-to-connect-headsets-to-mobile-devices

16)      This is why Apple iPhone sales are tanking in China

People were shocked when Apple reported its quarterly results the other day. Apple problem is simply that the market is mature and neither it nor any other vendor can come up with a new feature to trigger an upgrade cycle. This is as much a natural part of tech company evolution as a series of capital destroying overpriced acquisitions. There are those who believe a key feature of iPhones is their exclusivity though I would counter that I can buy an iPhone in Walmart but they don’t sell Rolex watches. As for China, well, funny story, it turns out there a limited number of people who can afford an iPhone and that isn’t likely to change.

“Only super rich, really high-paid professionals buy iPhones in China — you’re not talking about lots and lots of people,” said John Zhang, faculty director of the Penn Wharton China Center, and a professor of marketing. “That means at some point, you’re not going to be able to grow unless you put out new innovative products to keep your people engaged, which is not the case with Apple.”

http://www.marketwatch.com/story/apple-is-performing-terribly-in-china-but-its-not-because-of-the-economy-2016-04-27

17)      Beagle 2: most detailed images yet of lost Mars lander revealed

What is most interesting about this article is the image processing they were able to do as shown near the end of the article. Computationally intensive techniques were able to process the data such that the end images were 5x the resolution of the instrument itself. That is seriously cool stuff.

“While each HiRISE image has a resolution of around 25cm, the technique allowed the team to produce images of the Martian landscape with a resolution of just 5cm, allowing much finer detail to be observed than ever before. In the case of the Beagle-2 landing site, five images were compiled resulting in a four-fold improvement in resolution. But it’s a lengthy process. “It takes three days on our fastest computers to do a small scene of 2,000 by 1,000 pixels,” said Jan-Peter Muller, from University College, London who led the work. “We can’t yet do an entire scene.””

https://www.theguardian.com/science/2016/apr/26/beagle-2-most-detailed-images-yet-of-lost-mars-lander-revealed

18)      Revolutionary new pacemaker the size of a grain of rice is keeping British gran alive

We wrote about this device a number of months ago. It is a sort of pace maker which is implanted inside the heart through a catheter, so installation should be cheaper and less invasive. I don’t know what the battery life if, or how they would remove the device if it fails, but the technology is pretty impressive.

“She was fitted with a new type called a WiSE pacemaker, which is implanted directly into tissue that lines the left chamber of the heart. Like a conventional unit, it controls abnormal heart rhythms using low-energy electrical pulses – but without the need for wires. Simon James, consultant cardiologist, said: “For Joan, as soon as the device was switched on there was a huge change in the pumping of the heart. “Her blood pressure went up from the moment it was switched on so we felt confident she would begin to feel better quickly.”

http://www.mirror.co.uk/tech/revolutionary-new-pacemaker-size-grain-7811424

19)      Who’s downloading pirated papers? Everyone

Piracy isn’t always bad. Elsevier has rolled up the scientific publishing industry and now charges egregious amounts of money for access to papers. The great thing is, this is not like books or magazines: the content is free to Elsevier and the authors don’t even get royalties. Not only that but the majority of research is publicly funded. The natural response is simple: steal it and open it up, or, better yet, only fund research where the published results are going to be freely available.

“Many academic publishers offer programs to help researchers in poor countries access papers, but only one, called Share Link, seemed relevant to the papers that Rahimi sought. It would require him to contact authors individually to get links to their work, and such links go dead 50 days after a paper’s publication. The choice seemed clear: Either quit the Ph.D. or illegally obtain copies of the papers. So like millions of other researchers, he turned to Sci-Hub, the world’s largest pirate website for scholarly literature. Rahimi felt no guilt. As he sees it, high-priced journals “may be slowing down the growth of science severely.” The journal publishers take a very different view. “I’m all for universal access, but not theft!” tweeted Elsevier’s director of universal access, Alicia Wise, on 14 March during a heated public debate over Sci-Hub. “There are lots of legal ways to get access.” Wise’s tweet included a link to a list of 20 of the company’s access initiatives, including Share Link.”

http://www.sciencemag.org/news/2016/04/whos-downloading-pirated-papers-everyone

20)      U.S. Installs More Renewables Than Natural Gas in 1Q 2016, FERC Says

Lies, damned lies, and statistics: they thing with renewable energy is that the actual output of the system is a small fraction of the nameplate capacity, which is the only thing that matters. Of course, you’d expect a gold rush for installations of renewables since the sector is heavily subsidized. Despite those subsidies, the companies tend to lose money hand over fist so you have a completely irrational economic context. I predict a rash of “CO2 Emissions Fall Due to Renewables” type announcements. The thing is, coal plants are being taken off line and their capacity is being replaced by natural gas plants because natural gas is so darned cheap The reason it is cheap is mostly fracking, the headline should be “Thanks to fracking, CO2 emissions fall” but you won’t see that.

“According to an update from the Federal Energy Regulatory Commission (FERC), the U.S. installed more renewable energy capacity than natural gas in first quarter 2016. In the just-released monthly “Energy Infrastructure Update” from FERC’s Office of Energy Projects, nine new units of wind provided 707 MW, followed by 44 units of solar at 522 MW; nine units of biomass at 33 MW and one unit of hydropower at 29 MW. By comparison, two new units of natural gas came online, providing 18 MW of electricity generating capacity. In 1Q 2015, the U.S. installed 10 units of natural gas-fired capacity at 458 MW. There was no new capacity reported for the quarter from coal, nuclear, oil or geothermal steam.”

http://www.power-eng.com/articles/2016/04/u-s-installs-more-renewables-than-natural-gas-in-1q-2016-ferc-says.html

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