Microsoft: The New Player in Quantum Computing

Doppelspalt
Doppelspalt
Doppelspalt

On the week of September 25th, 2017, Microsoft made a huge announcement at its annual Ignite and Envision conference. Microsoft has become one of a small number of companies that is demonstrating quantum computing. IBM is another company that is also pursuing this rather futuristic computing model.

For those who are not up-to-date on quantum computing, it uses quantum properties such as superposition and entanglement to develop a new way of computing. Current computers are built around tiny electron switches called transistors that allow for two states, which represent the binary system we have today. Quantum computers leverage quantum states that give us ones, zeros, and combinations of one and zero. This means a single qubit, the quantum equivalent of a bit, can represent many more states than the bit can. This is, of course, a gross oversimplification but quantum computing promises to deliver more dense and exponentially faster computing.

There are a number of problems with practical quantum computing. The hardware is still in a nascent stage and must be cooled to a temperature that is quite a bit colder than deep space. This makes it much more likely that quantum computing will be purchased via a cloud model than on-premises. The other inhibitor is that there is no standard programming model for quantum computing. IBM has demonstrated a visual programming model that shows how quantum computing works but is clearly not going to be a serious way to write real programs. Microsoft, on the other hand, showed a more standard looking curly bracket programming language. This application layer makes quantum computing more accessible to existing programmers who are more used to the current model of computing.

When quantum computing becomes practical – I would predict that is at least 5 years away, perhaps longer – it won’t be for everyday computing tasks. The current model is already more than adequate for those tasks. It’s also unlikely that the capabilities of quantum computers, especially the information dense qubit, and costs will have much a place in transactional computing. Instead, quantum computing will be used for analyzing very large and complex data sets for simulation and AI. That’s fine because the AI and analytics market is still new and the future needs are not yet completely known. That future computing needs is what quantum computing is meant to address. Even today’s big data applications can stretch computing capabilities and force batch analytics instead of real-time for some use cases.
Microsoft’s entry into what has been an otherwise esoteric corner of the computing world signals that quantum computing is on the path to being real. It has a long way to go and many obstacles to overcome but it’s no longer just science fiction or academic. It will be years but it is on the way to becoming mainstream.

Note: This post was originally posted on Tom’s Take

Microsoft Infuses Products with Machine Learning and the Social Graph

This past week (September 25 – 27, 2017) Microsoft held its Ignite and Envision Conferences. The co-conferences encompass both technology (Ignite) and the business of technology (Envision). Microsoft’s announcements reflected that duality with esoteric technology subjects such as mixed reality and quantum computing on equal footing with digital transformation, a mainstay of modern business transformation projects. There were two announcements that, in my opinion, will have the most impact in the short-term because they were more foundational.

The first announcement was that machine learning was being integrated into every Microsoft productivity and business product. Most large software companies are adding machine learning to their platforms but no company has Microsoft’s reach into modern businesses. Like IBM, SAP and Oracle, Microsoft can embed machine learning in business applications such as CRM. Microsoft can also integrate machine learning into productivity applications as can Google. IBM can do both but IBM’s office applications aren’t close to having the market penetration of Microsoft Office 365. Microsoft has the opportunity to embed machine learning everywhere in a business, a capability that none of their competitors have.
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4 Key Executive ASC 606 Lessons Microsoft Is Teaching Us

Microsoft OnPrem Annuity Revenue
Drawing of Revenue Curve
Revenue (from Pixabay)

Note: To read Part 1 of Amalgam’s coverage of Microsoft’s ASC 606 adoption, please check how Microsoft Early Adopts New ASC 606 Revenue Recognition Standard.

Recommended Audience: CFO, Chief Revenue Officers, CIOs, COOs, IT Finance, Sales Operations seeking to understand how ASC 606 revenue recognition changes will affect their responsibilities.

On August 3rd, 2017, Microsoft held an investor metrics conference call led by:

  • Chris Suh – GM, Investor Relations
  • Frank Brod, Chief Accounting Officer
  • John Seethoff, Deputy General Counsel and Corporate Secretary

This call was focused on its implementation of new accounting standards, including ASC 606 for revenue recognition and ASC 842 for lease accounting.

There have been multiple acquisitions and announcements in the revenue recognition space as IT vendors ensure that they can support the ASC 606 standard including:

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Microsoft “Early Adopts” New ASC 606 Revenue Recognition Standard

The ASC 606 Apocalypse is at hand!
Apocalypse by Michael Lehenbauer on Flickr

Note: This topic is of key importance for CFOs using or considering a subscription-based business model and for CIOs tasked with aligning technology to revenue recognition. Part 2 of this topic is 4 Key Executive ASC 606 Lessons Microsoft is Teaching Us.

On July 20, 2017, Microsoft announced a very successful Q4 FY17 where they announced both successful GAAP and non-GAAP results.

· Revenue was $23.3 billion GAAP, and $24.7 billion non-GAAP
· Operating income was $5.3 billion GAAP, and $7.0 billion non-GAAP
· Net income was $6.5 billion GAAP, and $7.7 billion non-GAAP
· Diluted earnings per share was $0.83 GAAP, and $0.98 non-GAAP

But the part that got my attention was a relatively minor 2 paragraph note near the bottom of the earnings announcement on ASC 606 revenue recognition:

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