Welcome back to This Week in Modern Software, or TWiMS, our weekly breakdown and analysis of the need-to-know news, stories, and events of interest surrounding the software and analytics industries. This week, the tech headlines were dominated by quarterly earnings reports from some of the world’s biggest companies, which highlighted some huge trends sweeping the tech and software industries.
TWiMS Top Story:
Apple Reports a Quarterly Profit of $18.4 Billion, the Largest in History—The Verge
What it’s about: Apple hauled in $18.4 billion in profit (on $75.9 billion in revenue) during the final three months of 2015, the largest quarterly profit in public company history. That beat its own record of $18 billion set in the same quarter in 2014. Yet in spite of Apple’s astonishing financials, just about every news report on the company’s earnings focused on the company’s problems, not its successes. The issue? Apple said it expects year-over-year revenues to decline during the first three months of 2016, the first time that has happened in 13 years! That’s a big “but,” and it has fueled concerns of “peak iPhone”—Cult of Mac notes that the problem is expected to get worse before it gets better, with Apple narrowly missing expectations for iPhone sales, by far its biggest moneymaker, during its record-breaking last quarter. More important, the company is expecting the first ever year-over-year decline in iPhone sales during the current quarter.
Why you should care: Has the iPhone passed its prime? Let’s not get carried away, but any decline in sales of such a bellwether device would certainly be major news. Especially if the shortfall were to clock in at a whopping 17%, as one analyst predicts. Apple’s not going anywhere, of course, but such a humbling drop could reshape the smartphone market for consumers and app makers alike. A fresh round of new iPhone rumors didn’t exactly calm the storm, though Cult of Mac and others note promising signs for the Apple TV and Apple Watch. Nor is Apple resting on its device laurels: Fast Company said Apple is working on wireless charging, while The Financial Times [gated] reported that the company has set up a secretive team charged with building a virtual reality headset, which would let it go head-to-head with Google and Facebook on that front, too.
Further reading:
- The 5 Biggest Takeaways From Apple’s Biggest Quarter Ever—Cult of Mac
- Apple’s First-Quarter Earnings in Charts—Quartz
- Analyst: Apple’s iPhone Sales Could Fall 17% Year-Over-Year in the March Quarter—Fast Company
- Apple Inc. (AAPL) Revenue Breakdown by Product—Graphiq
- Apple Said Developing Wireless-Charged Phone for as Soon as 2017—Bloomberg
- ‘iPhone 5se’ Likely to Have Faster A9/M9 Chips & Always-on Siri, Come in 16/64GB Capacities—9To5Mac
- Apple Is Working on an iPhone That Charges Wirelessly—Fast Company
- Apple Has Secret Team Working on Virtual Reality Headset—MacRumors
Inside Facebook’s Decision to Blow Up the Like Button—Bloomberg Businessweek
What it’s about: Speaking of massive earnings, Facebook rocketed past Wall Street’s loftiest estimates for earnings and revenue last quarter, announcing earnings of $5.84 billion. But Facebook’s 1.59 billion users might be more concerned with other news: The company plans to replace its iconic “Like” button with a set of six emojis (called “Reactions”) which are set to launch soon, according to reports. For developers, meanwhile, the biggest impact might come from the company’s recent decision to wind down Parse, its popular mobile backend-as-a-service platform.
Why you should care: To put it mildly, when you’re going to tweak the best-known feature of one of the world’s most-used apps, you’d better not make decisions lightly. Software pros know how much is at stake with even the smallest changes to their UI and apps, and the Like button is not just a minuscule thumbs-up icon—it’s one of the most-clicked UI features ever. Bloomberg Businessweek’s Sarah Frier equates changing the Like button to Coca-Cola tweaking its secret recipe, but perhaps a better precedent is Microsoft burying Windows’ omnipresent Start button in favor of Windows 8’s “modern UI.” Many observers feel that move helped open doors for a resurgent Mac platform. Similarly, now that Parse will be shuttered in February 2017, it could be an opportunity for Twitter’s Fabric tools to step up as a replacement.
Further reading:
- Facebook Smashes Street’s Highest Estimates on Revs and EPS—CNBC
- Why Did Facebook Kill the ‘Yay’ Button?—Gizmodo
- Facebook’s New Like Button Options Are Coming ‘in the Next Few Weeks’—The Verge
- These Are Facebook’s New Like Button Alternatives—TIME
- Facebook’s Reactions Effort Tweaks Like Button, May Yield Data Bonanza—ZDNet
- Facebook Is Shuttering Parse, Paving the Way for Twitter Fabric to Reign Supreme—The Next Web
Microsoft Announces the First Technical Preview of Azure Stack—TechCrunch
What it’s about: Microsoft delivered its own quarterly earnings beat this week, and in spite of lower sales, it outpaced Wall Street’s estimates with strong performance from its Azure cloud platform and Windows 10. The enterprise cloud strength is especially notable: Patrick Moorhead, president of Moor Insights and Strategy, tells USA TODAY: “Microsoft’s cloud success can no longer be looked at as a ‘one-off’ or luck, it’s becoming a giant business that could give Amazon a run for its money.” That’s saying something, given that Amazon Web Services just posted a 69% year-over-year jump in revenue, raking in $2.4 billion last quarter. In other Azure news, Microsoft released its first technical preview of Azure Stack on Friday, extending its Azure platform to the corporate data center in hopes of capturing companies that aren’t fully comfortable moving all their workloads to the public cloud.
Why you should care: Whether in the public cloud, in your own data center, or some combination of both, every quarter brings more confirmation that cloud computing is the new default. Azure Stack is also another sign of just how serious Microsoft is about its enterprise cloud business: Corporate VP of Enterprise Cloud Mike Neil wrote in a blog post that while Redmond is signing up 100,000 new customers every month to its public Azure cloud, “We know many enterprises still have business concerns around moving fully to the public cloud, such as data sovereignty or regulatory considerations. This leaves them in a complicated position, with one foot in the public cloud and one on-premises. To manage this complexity, Microsoft believes enterprises have to approach cloud as a model—not a place.” Enter Azure Stack, which boasts many of the same or similar features (but not all) as Azure itself. Among other upsides, Azure Stack lets developers in hybrid cloud environments write code once for both the public Azure cloud and their own data center.
Further reading:
- First Look: Microsoft Azure Stack Hits the Ground Running—InfoWorld
- Microsoft Beats the Street on Cloud, Windows 10 Growth—USA TODAY
- Amazon Web Services Brings in $2.4B in Revenue in Q4 2015, up 69% Over Last Year—VentureBeat
The State of Containers: 5 Things You Need to Know Now—TechBeacon
What it’s about: How’s this for a growth story? A year ago, container leader Docker had next to no adoption. Now, it’s running on 6% of all hosts, according to Datadog. And that doesn’t even account for coreOS and other container alternatives. With that as a backdrop, Cloud Technology Partners SVP David Linthicum checks in with a “state of containers” report in the early part of 2016. Linthicum credits three related megatrends for the meteoric rise of containers: cloud computing, DevOps, and the proliferation of data-driven organizations (and the data-related applications and platforms they rely on). Linthicum also shares five key considerations for containers in the enterprise, including for companies that are just beginning to kick the tires on containerization.
Why you should care: Linthicum’s recommendations cut through the deafening buzz surrounding Docker and containers in general, and all five are worth a read. A few highlights: All applications are not created equal, and as Linthicum writes, “Scaling is a matter of the application,” not the container or an orchestration tool like Docker Swarm or Google Kubernetes. You’ll need to do your own analysis to determine whether a particular application is worth moving into a container, Linthicum advises, just as you would do when deciding whether or not to move an application to the cloud. Similarly, don’t bother jumping on the container bandwagon if you’re not willing and able to test, measure, and test again: “Enterprises moving to containers need to create test platforms to understand the real limitations of the technology,” he writes. No matter your organization’s container strategy (or lack thereof), however, Linthicum’s conclusion is hard to argue with: containers are here to stay.
Further reading:
CarPlay vs. Android Auto: Different Approaches, Same Goal—Ars Technica
What it’s about: It was a busy week for cars (and buses) and the software that increasingly powers them. That’s true from your family car to your Uber driver to the driverless vehicles of the fut—er, of right now, apparently. Ars Technica puts Apple’s CarPlay and Google’s Android Auto in the ring together and finds a split decision. Author Ron Amadeo concludes that CarPlay and Android Auto aren’t really pure competitors. Chances are the decision is out of your hands (it depends on the vehicle you choose and which platform it supports) or one you made a long time ago when you picked between an iPhone or an Android phone. Here’s the good news: While Amadeo notes both are very much in their 1.0 phase with plenty of room for growth and improvement, he gives high marks to both dashboard interfaces. But he warns third-party app developers to temper their excitement: “Both Google and Apple make it very clear that third-parties are ‘guests’ and not allowed to take over too much of the interface.”
Why you should care: Software is taking over just about every part of the automobile industry. Elsewhere in the growing lines of code on the road, The Guardian reports that Uber is using a smartphone sensor to monitor drivers on a trial basis in Texas, looking to identify speeding and other dangerous practices. Meanwhile, the president of ride-sharing competitor Lyft is betting big on self-driving cars, according to Re/code’s Eric Johnson, and especially the software that will power them. And Nissan’s CIO is already planning for the hacking threat to autonomous cars and the data that travels with them, says Hot Topics’ Jack Hershman. Finally, in the Netherlands, driverless buses entered the fast lane this week with the first trial of its kind anywhere in the world, shuttling six passengers down 200 meters of public roadway. Software isn’t just eating the automotive industry; it’s apparently already finished and moved on to dessert.
Further reading:
- Uber Monitoring Drivers in U.S. in Attempt to Flag Dangerous Driving—The Guardian
- Lyft President John Zimmer Is Going All-In on Self-Driving Cars—Re/code
- Nissan CIO: Autonomous Cars, Consumer Trust, and Data—Hot Topics
- Driverless Bus Trial in Netherlands Is First on Public Road—The Guardian
How the Tech That Took Away Your Work-Life Balance Is Working to Reinstate It—Fast Company
What it’s about: It’s the Catch-22 of modern software and its impact on work: Software and technology are empowering and liberating because they help us stay connected and get stuff done from just about anywhere. But that’s also a problem because we stay connected from just about anywhere and never seem to stop working. Basecamp CEO and co-founder Jason Fried recently tweeted, “Working more than 40 hours a week doesn’t mean you’re working hard. It just means you are working more than 40 hours a week.” True, but Fried’s project management application is one of the many tools and technologies—including ChatOps, email, smartphones, and ubiquitous Wi-Fi and broadband access—that keeps us on the clock around the clock. Fast Company’s Lydia Dishman looks at how features like Basecamp’s “Work Can Wait” and Slack’s “Do Not Disturb” are trying to return some of the personal time that these and other apps usurped in the first place.
Why you should care: If you work in tech, you’re probably familiar with the always-on dilemma: The 40-hour work week is like a rotary phone: You’re pretty sure it was a real thing once, but you’ve rarely encountered it in your own life. Dishman cites some pretty damning stats from a survey conducted by Workplace Trends and Career Arc that suggest “work-life balance” is more of a buzzword used by management than it is a day-to-day reality for employees. Nearly two-thirds of employees reported their manager expects them to be reachable outside the office, and one in five workers say they spend as many as 20 hours a week of “personal time” on work-related tasks. Efforts to keep our constant connectivity in check might be laudable, but will they actually work? If not, the headline of a piece by Bloomberg’s Rebecca Greenfield this week could be prescient: “You’re about to hate Slack as much as you hate email.”
Further reading:
- You’re About to Hate Slack as Much as You Hate Email—Bloomberg
- How This Week’s Twitter Departures Reflect Tech’s Culture Woes—Fast Company
Want to suggest something that we should cover in the next edition of TWiMS? Email us at [email protected].
About the Author
Kevin Casey is a freelance technology writer and business writer for InformationWeek and other publications, with an increasing focus on IT careers and big data. Kevin won a 2014 Azbee Award from the American Society of Business Publication Editors for his feature story "Are You Too Old For IT?" and was a 2013 Community Choice honoree in the Small Business Influencer Awards. View posts by Kevin Casey.
