The Days of Secret Military Operations May Soon Be Over. Does That Matter? –

In the age of social media and increasingly available connectivity, experts say it is becoming more and more challenging for the U.S. military to conduct operations under a cloud of darkness.

Secrets now come with a half-life, multiple experts recently told And what comes into question is how the U.S. military will plan each operation down to the smallest detail in order to avoid catastrophic incidents with emerging powers or near-peer threats such as Russia or China.

Because the growing unknowns to the Defense Department are: Who’s watching? Who’s listening? How are they manipulating operational secrets?

“With all of these sensors, sharing, there are no more secrets,” said Peter Singer, senior fellow at New America, a think tank in Washington, D.C.

“They can be gathered, analyzed and shared in a way that was almost unimaginable in the past,” said Singer, who recently co-authored “Like War,” a book detailing how the rise of social media has revolutionized politics, global intelligence and warfare.

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The most famous example of the intertwined nature of social media and war operations is the Osama Bin Laden raid in 2011, he said, along with other experts spoke with this month.

Sohaib Athar,a.k.a. @ReallyVirtual, live-tweeted the entire operation happening that night in Abbottabad, Pakistan. Griping about the noise, Athar posted, “Helicopter hovering above Abbottabad at 1AM (is a rare event).” It was hours before news reports would surface back in the United States that the operation was a success.

“It’s just a great illustration of how you can’t operate with any expectation of secrecy anymore,” Singer said in a telephone interview.

The raid took place on May 2, 2011, at a time when roughly 1 billion people had access to social media,according to a group called Statista. Compare that to the present: The database company estimates that, by 2019, there will be 2.77 billion social network users around the globe.

Then insert even more capabilities and functions rising worldwide: traffic cameras, driverless cars, Amazon’s Alexa, spotters gathering aircraft transponder data, satellite data, elements of the powergrid.

“All of these different things can be mined for information,” Singer said.

“You can figure out if or how a unit has deployed based on whether or not their hot water consumption has changed,” he said. “Or even the absence of something. If a certain Marine who’s tweeting suddenly stops tweeting, that’s an indicator.”

The United States has more than 1.3 million active-duty troops serving in its armed forces, with thousands deployed around the globe at any given time.

In January, reports that an interactive map found online — the Global Heat Map, published by the GPS tracking company Strava — showed U.S. service members in various military installations around the world by using satellite information to map the locations and movements of exercise trackers such as Fitbit and Jawbone. Defense Secretary Jim Mattis issued a guidance soon after for all personnel to “maintain electronic security” for personal devices such as cellphones and exercise trackers used by service members worldwide.

It wasn’t just geeky tech: The Defense Department has clamped down on media engagement more and more in recent months, often citing operational security concerns to limit information sharing.

Deployment announcements and press releases have been curtailed. The U.S. Navy, for one, has become increasingly secretive.

In 2017, Chief of Naval Operations Adm. John Richardsonissued a memo telling sailors to steer clear of “events that are primarily for marketing, and that don’t make an intellectual contribution to warfighting,” as well as openly sharing information with the press. More recently, the John C. Stennis Carrier Strike Group in October quietly left Washington state for a deployment with “no public notice,”USNI News reported at the time.

“You can limit some of these things, but it won’t change the fundamental nature of how the world has been rewired,” Singer said.

“There’s no going back to the way things used to be,” added August Cole, senior fellow at the Atlantic Council’s Scowcroft Center for Strategy and Security.

Aside from buttoning up standard press releases or turning off a cellphone, “that doesn’t mean, though, that there can’t be innovation around camouflage, deception, subterfuge,” to keep an enemy at bay, Cole said.

“I think we’re going to see the same kinds of ingenuity that we first saw during World War II in trying to mask and conceal to the best of our ability large military operations, but they won’t be effective as often as they might have been before we all had iPhones and Twitter accounts,” he said.

Singer quoted a passage from his book, in which current Army Chief of Staff Gen. Mark Milley put it this way: “For the first time in human history, it is near impossible to be unobserved.”

Digitization of War, Pursuit of AI

Big data exists everywhere. And the Pentagon is investing billions in artificial intelligence to mine data that could help them win the next war.

According to independent research group Govini, the Pentagon spent roughly $7.4 billion on emerging technologies in fiscal 2017. While AI accounted for roughly 33 percent of that total, the spending also includes quantum computing and big data analysis, as well as other information technology.

Officials have said they are actively working to “refine information analysis” through AI to eventually reach operators on the ground or in the sky in a decisive and streamlined way.

“[But] before you get to artificial intelligence, you have to get to automation, and what does that mean? It means we’re really developing algorithms, so we then have to build trust in the algorithms,”Lt. Gen. VeraLinn “Dash” Jamieson, the service’s deputy chief of staff for intelligence, surveillance and reconnaissance on the Air Staff at the Pentagon, told last year.

The military is looking to the defense industry as well as firms in Silicon Valley for support, added Air Force Chief of Staff Gen. David Goldfein.

“What all the services are heavily leveraging — and looking at industry as well for support — is how do I take that very human-centric methodology that we have today and use artificial intelligence that uses automation that uses some of the tools that are available to be able to do that kind of analysis?” Goldfein told reporters last July.

That’s one element where the Pentagon is moving in the right direction in its efforts to get ahead in a world of continuously crowdsourced information, said Kara Frederick, a research associate for technology and national security at the Center for a New American Security. Frederick worked as an intelligence officer for U.S. Naval Special Warfare Command and later helped found the global security counterterrorism analysis program at Facebook.

“Evolving computing power is only going to increase our ability to process and exploit data,” she said.

“The digital universe is growing by leaps and bounds,” added Singer. “Depending on different estimates, we’ll soon have 20 billion different devices online.”

Metadata that can be harvested from a single post and peeled back layer by layer can give adversaries — or friendlies — the who, what, where and even why behind a single action, he said.

For example, “it’s no longer, ‘Oh Russia shot down an airliner over Ukraine, because here’s also the individual Russian soldiers [who] pulled the trigger,’ ” Singer said, citing Malaysia Airlines Flight 17, which wasshot down over Ukraine in 2014 by pro-Russian separatists using a Buk surface-to-air missile system. All 298 aboard died.

“We’re recognizing this is something that we can use to our advantage as a potential force multiplier,” Frederick said. “Of course, our adversaries are doing the same thing. [So] we need to be wary of the competition … elements of that [upcoming great power] era that people are rightly warning about.”

Even a person is a piece of data, Cole said.

What the world is going to have in the 2020s and beyond is “fused data streams” from things that aren’t just new technological gear soldiers may be wearing, but the soldiers themselves, he said. “I can see a day, not that far off, U.S. forces are effectively creating camouflage that is digital that exists in the cognitive domain.”

That could also turn into data that can be manipulated to deceive the enemy. Cloaking devices used within the electromagnetic spectrum, or even spoofing data can help forces hide in plain sight.

“How do you drop a parachute company” into a dangerous environment undetected? Cole questioned. “Some may say that’s an outdated form of warfare to begin with.”

Yet it’s the most effective way to get people to a location quickly and in mass numbers, he said.

While deceiving enemy combatants isn’t a new concept, altering what can be seen, heard or maybe even read by sophisticated software continues to flourish.

Last year, a research development team at MIT called Labsix successfully demonstrated how Google’s image-classifying artificial intelligence could be manipulated into “thinking” that a 3D-printed turtle was instead a rifle.

“Our work demonstrates that adversarial examples are a significantly larger problem in real world systems than previously thought,” the Labsix team said in its study.

And it doesn’t even need to be that sophisticated, Cole said.

“You could use Twitter or Facebook campaigns … to show fake information that aircraft carriers are at home when they’re actually deployed,” he said, adding the ethics and legality of such actions brings about a much different conversation.

Ten years from now, “the impact machine learning and AI [are] going to have on this question of concealment .. .is perhaps one of the most important [elements] to figure out from a strategic, but also tactical point of view,” Cole said.

Open Sharing in a ‘Sea of Lies’

Operators harvesting en masse should take into account that these emerging technologies could lead to information wars with fake intelligence.

The truth can be buried “under a sea of lies, and that’s what the Russians have figured out,” Singer said. “Not just them — politicians, teenagers, digital marketers, whatever. You can learn something about [a person], where they are, and then you can push messages to them. Those messages don’t necessarily have to be true,” which could have implications of psychological operations.

“We have to be aware these technologies can be used for malign purposes,” added Frederick.

“It’s not all for the good.”

For example, during the Battle of Mosul, Islamic State fighters posting online repeatedly made claims of victory regardless of the group’s casualties. “But … it wins the online war, it drives its message viral even though it wasn’t necessarily true at first,” Singer said.

Iraqi and Peshmerga forces made repeated attempts to retake the city after it was seized by ISIS fighters in June 2014. In 2016,dozens of local journalists embedded with troops to help stop false information coming from the ISIS campaign. It wasn’t until 2017 that forces backed by the United States claimed victory.

As a counterterrorism analyst, “we had to get into people’s mindsets early on,” to see how or why “somebody on the other side is looking to harm you,” Frederick said.

“This has military implications. What if you’re on a PC, and someone has made your commander’s orders look like he’s saying something else through a digital forgery?” she said. “How do you know whether or not to obey those orders?”

Still, the more information out there in open-source networks, the more there is to be used against an adversary, Frederick said.

“We need to start incorporating a lot of the open-source work into our own intelligence work,” she said. “If we combined national, technical means with open-source information like social media in a serious way, then layering that data is going to become a force multiplier.”

The Effect Is What Matters

The space in which the U.S. can operate covertly or safely is shrinking, the experts said. Goals need to be set and kept in every mission, with a combination of cybersecurity, electronic warfare, stealth and spoofing, among other information or deceptive characteristics, at the forefront of each move, they said.

It’s the only way to create surprise, if needed.

Military “invasions, occupations … these are anachronistic concepts in the information age,” said retired Air Force Lt. Gen. Dave Deptula, dean of the Mitchell Institute for Aerospace Studies.

“It is going to be very difficult to put together any kind of large-scale operation” in an increasingly media and information-heavy age, said Deptula, who was also the Air Force’s first deputy chief of staff for intelligence, surveillance and reconnaissance.

“So the question must become: What is it that you’re trying to do? There may not be one answer. There are a variety of different levels of operation, some of which quite frankly can be kept covert,” he said. “We still do special operations very, very well today, and keep those operations below the social media net, if you will. But as you get larger and larger in terms of forces, and as you garner forces in a manner that is beyond one nation, it’s very difficult … to achieve surprise.”

There are various ways to “surprise” the enemy, Deptula said.

At a tactical level, it’s possible. While there was no strategic “surprise” during Operation Desert Storm — Iraqi leader Saddam Hussein and his forces “knew we were there” — Saddam was still in the dark on how the U.S. would attack, the time or the place, he said.

“The Iraqis had no idea until the first bombs [were dropped] in Baghdad,” said Deptula, who was the principal attack planner for the Desert Storm coalition air campaign in 1991. “And we did that through the use of stealth aircraft — our ace in the hole.”

For weeks, pilots flew tankers around the Iraqi airspace. On the night of the operation, tankers flew the exact same tracks, but this time they had stealth F-117 Nighthawks right beside them.

“It’s what you can achieve at the tactical level that’s important,” Deptula said.

Any notion that the U.S. needs to buy a certain type of aircraft or weapon to achieve success “is nonsense,” he said. “Like everything, there is an offensive element and a defensive element and … there’s a variety of options in between.”

— Oriana Pawlyk can be reached at Follow her on Twitter at @Oriana0214.

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WASH paving way for resurgent India – Elets

There is a need to realise the significance of water, sanitation and hygiene (WASH) in life collectively than viewing them as separate entities. It is so because they are inter-related, with one influencing the other every day. The endeavour to bring much-needed transformation in the country is being brought by the National Institute of Urban Affairs (NIUA) with the support of USAID and project partner Ennovent, observes Sandeep Datta of Elets News Network (ENN).

It is significant to remember that urban India’s population is growing at the annual rate of 2.1%. By 2050, India is likely to add 416 million urban dwellers to the world’s urban population, which will be about 58% of the total global population, according to an estimate stated in the UN Department of Economic and Social Affairs Report (2018). The increasing need for water and sanitation services in the growing urban settlements presents critical challenges. It is estimated 1,00,000 young lives are lost annually due to poor sanitation and hygiene facilities. Moreover, the Indian economy loses nearly $54 billion annually due to inadequate sanitation and its adverse effect on other sectors such as health, environment, tourism, etc. Some of the pressing issues related to sanitation include the lack of adequate infrastructure (sewerage networks and treatment facilities), non-compliance with national standards of waste management, and inequitable distribution of WASH services affecting the urban poor.

It has been observed that the inadequacy of facilities largely affects the inhabitants of slums, informal settlements and illegal colonies, with women being the most affected lot. Moreover, poorly planned and managed systems (public toilets) are mostly supply-driven. They are oriented towards asset-creation rather than service delivery. As a result, they fail to meet the benchmarks of service quality, efficiency and cost recovery.

The Big Challenge

With the steadily expanding size of the Indian cities, there is an influx of floating population that arrives in cities for livelihood or work purpose and tourism. These people most of the time face difficulties in accessing sanitation facilities. The inadequacy is not only prevalent in the work environment of daily labourers, but also during their commute to work from peri-urban areas to the cities; travellers out for sightseeing; local residents commuting for various purposes. Women, who also form a major part of this moving population, suffer a lot due to lack of public sanitation facilities. There is a vital need to address it, as it inadvertently leads to open defecation. Such challenges require solutions with an innovative edge at the local level essentially implemented by the urban local bodies.

Need of the Hour

The need of the hour is to bridge this gap with an inclusive ecosystem within existing working framework that can accommodate innovative solutions for the urban WASH challenge; while considering future of these ever expanding cities.

Urban WASH’s Challenges and Need for Innovative Solutions

Rapid urbanisation, along with growth opportunities, is giving birth to multiple challenges for cities in India, one of them being accessing clean water, sanitation and hygiene (WASH) for all. There is an acute shortage of WASH infrastructure and services in the Indian cities. It is only making the issues more glaring. Hence, it is crucial for the city administrators to make steadfast efforts, and implement best practices and models to resolve these pressing concerns before they aggravate further. In this light, as a measure to address these problems, the Government has launched flagship missions such as Swachh Bharat Mission (SBM), Atal Mission for Rejuvenation and Urban

Key Measures to Provide Succour

To address the above challenges, the Government has launched flagship missions such as Swachh Bharat Mission (SBM), Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Smart Cities Mission. However, to sustain the efforts through these missions and be cognizant of the future landscape of issues of urban India, adopting innovative technologies and solutions for provisioning of water and sanitation needs to be a plausibility factor.


The National Institute of Urban Affairs (NIUA) is a premier institute and an autonomous body under the Ministry of Housing & Urban Affairs, Government of India for research and capacity building in the urban sector. Its primary goal is to promote integrated solutions for rapidly growing urban centres in the country, and address various challenges they face to provide improved services to citizens.

Over the years, NIUA has also been supporting a number of urban local bodies through its capacity building programmes, conducting research for specific urban issues, and creating knowledge platforms like Smartnet. The experience helped NIUA learn that at the city level the intra-departmental coordination and engagement with all relevant stakeholders to augment efforts for provisioning of clean water and sanitation facilities for the citizens are rare to find. NIUA has been actively engaged in addressing WASH focused issues through an array of projects, and has worked towards developing new research and expertise for supporting effective innovations in the urban WASH sector.


The Innovation Hub for Urban WASH Solutions (IHUWASH) is creating an ecosystem to addresses the challenges of urban WASH sector by engaging multiple stakeholders from the public and private sectors, civil society organizations, urban local bodies, academic institutions. The NIUA, a premier research institute under the Ministry of Housing and Urban Affairs, is implementing the project in partnership with Ennovent. The project is supported by United States Agency for International Development (USAID).

IHUWASH Project to Benefit India’s Urban WASH sector

NIUA conceived the IHUWASH project, which primarily focuses on scaling and replicating localised solutions and work as an ecosystem. NIUA with the support of United States Agency for International Development (USAID) endeavoured to create an Innovation Hub for Urban Water, Sanitation, and Hygiene (IHUWASH) solution in India. During its inception stage, the hub focused on understanding the local WASH needs of the cities and identify innovative solutions—new and existing—that are relevant to the local context. The idea was to adopt business models and best practices, and replicate them in the local context. The solution may not be the same for each city, as it would differ depending on their needs. Hence, it was essential to create an ecosystem to support that replication and scaling of solutions. The IHUWASH project has a very important dimension, which is provisioning of innovative public and community toilets.

IHUWASH — The Roadmap Ahead

IHUWASH in its focus cities of Mysuru, Udaipur, and Faridabad has created City Innovation Hubs within the municipal corporations under the guidance of the city commissioners. The municipal corporations with IHUWASH facilitation have collaborated with local technical institutions to create WASH labs that support the municipal corporations in implementing the innovative WASH solutions.

The National Institute of Engineering at Mysuru, Geetanjali Institute of Technical Studies at Udaipur, and Manav Rachna International Institute of Research Studies at Faridabad house the WASH Labs in the respective cities. The labs will work with the municipal corporations to find locally relevant WASH solutions and extend their efforts in involving the private sector and citizenry to create a WASH forum.

A Glimpse of Vital Innovative Measures IHUWASH Accelerator

The IHUWASH Accelerator is working in coordination with Faridabad, Mysuru and Udaipur. Over a period of 7 to 12 months, the programme will help the selected innovations to raise funds and get support from city governments, private sector companies, experts and impact investors.

It is a unique opportunity for the private companies to showcase their innovations through a nationwide programme which is supported both by the Central as well as the State Government. “The delivery mechanism of IHUWASH makes it different from other ongoing WASH projects. IHUWASH not only focuses on WASH infrastructure development but also emphasises on building partnerships with and between public, civil society and private sector stakeholders,” said Siddharth Sihag, Commissioner, Udaipur Municipal Corporation. The programme focuses on WASH domain specific programme. This means that only WASH innovators will directly work with the Governments, companies, experts and investors. It offers sector relevant insights, funding and opportunities that a generic program cannot match.

WASH Parks

To increase awareness about sanitation and Swachh Bharat Abhiyan, sanitation parks and water technology parks have been proposed. The idea is that these parks will serve as knowledge and tourist hubs and help provide information on latest technologies tackling the various issues concerning water, sanitation and hygiene. NIUA wants to change the perception of people regarding toilets. Instead of perceived as a bad dirty stinking place, toilets will be developed as an amusing place for experiencing a natural process.

Splunk Inc. (SPLK) Q3 2019 Earnings Conference Call Transcript – The Motley Fool

Image source: The Motley Fool.

Splunk Inc.(NASDAQ:SPLK)

Q3 2019 Earnings Conference Call

November 29, 2018, 4:30 p.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Good day, ladies and gentlemen and thank you for standing by. Welcome to the Splunk Inc. third quarter 2019 financial results. At this time, all participants are in a listen-only mode to prevent background noise. If anyone needs assistance during the conference, just press * and 0. Later, we will have a question and answer session. As a reminder, this conference is being recorded.

Now, it’s my pleasure to turn the call to the Corporate Treasurer and Vice President of Investor Relations, Mr. Ken Tinsley.

Ken TinsleyCorporate Treasurer and Vice President of Investor Relations

Excellent. Thank you, Carmen. Appreciate that and good afternoon, everyone. With me on the call today are Doug Merritt and Dave Conte. After the close of market today, we issued a press release with our Q3 results and it’s also posted on our website. This call is being broadcast live via webcast and following the call, an audio replay will be available on the website as well.

On this call, we will be making forward-looking statements, including financial guidance and expectations, including our forecast for our fourth quarter and full years of fiscal 2019 and 2020. Trends and expectations regarding innovation partners, customers, markets, demand, strategies, revenue, and bookings mix and predictability and our expectations regarding our investments, products, and technologies.

These statements reflect our best judgement based on factors currently known to us and actual events and results may differ materially. Please refer to documents we file with the SEC, including the Form 8-K filed with today’s press release. Those documents contain risks and other factors that may cause our actual results to differ from those contained in our forward-looking statements.

These forward-looking statements are being made as of today and we disclaim any obligation to update or revise these statements. If this call is reviewed after today, the information presented during this call may not contain current or accurate in.

We will also discuss non-GAAP financial measures which are not prepared in accordance with generally acceptance accounting principles. A reconciliation of GAAP and non-GAAP results is provided in a press release and on our website.

With that, let me turn it over to Doug.

Douglas Merritt President and Chief Executive Officer

Thank you, Ken. We drove fantastic results in Q3 thanks to strong execution in the field and the most exciting .conf in Splunk’s history. We delivered $481 million in total revenue, up 40% over last year. Our success comes from new and exiting customers, expanding their adoption with Splunk as their platform for data analytics and machine learning. So, it’s on prem and in the cloud.

At .conf18, we hosted nearly 10,000 people and shared our newest wave of product innovation. We announced updates to our existing products, including new versions of Splunk Enterprise and Splunk Cloud, with better performance, scale, machine learning, and analytics abilities.

A few of the new capacities include a machine learning toolkit connector for Apache Spark and a container for tension or flow, guided data onboarding to help customers move customers into their partner, Splunk SmartStore, which allows compute and storage tiers to be independently scaled on business demands, Splunk on Docker to cover deployments in Docker containers, metrics workspace to monitor and analyze metrics data in an efficient, intuitive user interface, and the crowd favorite, dark mode, which is perfect for SOC and NOC environments.

We released Splunk for industrial IoT, our first IoT solution, which provides a simple view of the complex industrial data environment to minimize downtime and shift our operations from reactive to proactive. We announced a new release to Splunk IT Service Intelligence or ITSI to help customers better predict and prevent problems through a series of enhanced capabilities like KPI predictions and predictive cause analysis and an entirely updated security suite with new versions of Splunk Enterprise Security or ES, user behavior analytics or UBA, and Phantom.

We also announced an exciting new suite of beta capabilities, which we call Splunk Next. Splunk Next evolved from conversations with our customers, who asked us to focus on three major areas — one, to work with their data wherever it lives, two, to further embed AI and ML in our platform to create action-driven outcomes, and three, to empower users across their organizations on any device.

Splunk Next announcements, like our Data Stream Processor and Data Fabric Search mean you can refine and adjust data as it moves across the stream and then search across multiple data stores in Splunk or elsewhere. And additional capabilities like business flow, natural language processing, and Splunk Mobile empower new users regardless of their technical skillset or physical location to investigate, monitor, and act on their data no matter where it lives.

During the keynotes, we welcomed leaders from Starbucks and BMW who shared how they’re using Splunk to make things happen in their organizations. I was honored to be joined on stage by Arnold Donald, CEO of Carnival Corporation. He shared our Carnival creates meaningful guest interactions both on and off their fleet of floating cities. Carnival relies on Splunk to monitor connectivity on the ships, monitor their mobile apps, and keep their own and their guests’ data safe, ultimately helping to provide a seamless digital experience.

Since our first product shipment, Splunk has taken a different approach to data. Unlike other data technologies, you do not have to know the questions you’ll ask before you deploy our solutions. The magic of Splunk is that we embrace the complexity and chaos of an ever-changing data landscape and allow you to find insights from your data without the high entry costs of cleansing, parsing, and structuring.

Our goal remains the same, to become the ubiquitous machine data platform, the standard in every organization, solving our customers data challenges around IT operations and application delivery, security compliance and fraud, as well as business analytics and the internet of things. These markets are going through a shift to an analytics and machine learning-based approach, where Splunk is uniquely poised to lead this change and deliver for our customers.

Transitioning to customer success in Q3, let’s start with IT. Softbank purchased Splunk Cloud to speed up troubleshooting for mobile devices and application management. Softbank already uses us for IT and AI ops and expects Splunk Cloud to improve efficiency and performance across infrastructure and operations management.

ATB Financial, Alberta’s largest homegrown financial institution, expanded their use of Splunk Cloud and brought on ITSI one year after their first Splunk investment. ATB Financial has been using Splunk Cloud to make their online activity data available across teams and will now use Splunk for mobile app monitoring and executive reporting.

Chicago Public Schools, one of the largest public school districts in the country, expanded their use of Splunk Cloud to help automate their service and out-ticketing process along with other IT monitoring and response workflows.

Moving to security, longtime Splunk customer, Norfolk Southern, expanded their use of Splunk Enterprise and ES to better lead with an analytics-driven approach to security. With Splunk, they will use data to gain visibility into their threat environment at machine speed, while also meeting compliance standards with positive train control, a federal safety mandate that controls trains to avoid accidents.

The Department of Home Affairs, which brings together Australia’s federal law enforcement, national security, and criminal justice-related functions and agencies, replaced its legacy SAM with Splunk Enterprise. With Splunk, they can centralize security management on a single platform and better handle the big data scale of their security operations center.

Texas A&M University selected Splunk Enterprise as the foundation of their security operations strategy. The university chose Splunk for continuous threat analysis, monitoring, and investigation as well as satisfying compliance requirements. A&M also plans on their cybersecurity researchers with Splunk’s machine learning capabilities in order to develop and improve threat monitoring to better detect advanced threats.

Highlighting a handful of customers who standardized on Splunk as their machine data platform, Randstad, a global leader in the HR services industry, got Splunk Cloud, ITSE, and ES to support their global IT infrastructure services. We will help Randstad expand the company’s infrastructure monitoring across the business and leverage Splunk as a SIM at the heart of their SOC. We would like to thank our partner, TCS, for their support in collaboration in initiating this opportunity.

SendGrid has gone all in on Splunk, expanding Splunk Enterprise across their customer support, compliance, professional services, and engineering teams. SendGrid uses Splunk to debug and DevOps, help their customer meet in SLAs, and keep their customer-facing platform online. Thanks to our partner, Presidio Capital, who was instrumental in this transaction.

The Naval Post Graduate School is a new Splunk customer, purchasing Splunk Enterprise, ITSI, and ES. The school plans to use ITSI to keep a wide range of mission-critical IT systems online while ES will stay at the heart of their new SOC. Long-time customer Clemson University purchased Splunk Enterprise, ES, ITSI, and UBA. Clemson uses Splunk to thwart cyber threats, monitor campuswide IT, and integrate into their campus platform to support student success.

We also saw continued global adoption in our cloud business. A sampling of our cloud wins in the quarter include Teachers Mutual Bank, one of the largest in Australia, who is a new customer that bought Splunk Cloud and ES to optimize their security operations and improve their security posture. Teachers Mutual Bank expects to obtain end to end visibility, ensuring a safe environment for their customers’ business.

New customer Fleetcor Technologies bought Splunk Cloud to improve their security posture. Splunk was selected because we can support all of Fleetcor’s data sources and will augment their current SIM. Thanks to new Splunk partner, DataMD, who supported this opportunity.

Personalized video marketing platform Sunday Sky moved to Splunk Cloud as their central platform to provide complete transparency into IT and business operations as well as for research and development use cases.

To highlight the impact that Splunk can provide on the IoT front, one of my favorite keynote presentations at .conf was Boulos El-Asmar from BMW Group. BMW group took us through their Splunk journey, starting with a small Splunk Enterprise license and just one security use case to now, where BMW Group is using Splunk to drive innovation across their business. BMW is using our machine learning toolkit to predict traffic dynamics as well as our natural language capabilities to help them speed time to value, allowing them to simply ask questions of Splunk via Alexa.

On the manufacturing side, Splunk Industrial Asset Intelligence helps plant floor engineers, keep production up and running by correlating IoT data. Amsterdam’s public transport operator, GVB, is a new Splunk customer, purchasing Splunk Enterprise to support use cases in IoT, IT, and business intelligence. GVB will be using Splunk to better monitor and act on their real time passenger information services, providing users with a better, more efficient, and more informed public transportation experience. Big thanks to our partner at DITP for their support in this opportunity.

And it was another big quarter of customer-focused innovation with AWS. I’m just back from re:Invent. This week, we launched a new integration with AWS Security Hub and an added capability to query against cloud watch log insights. We also released integrations this quarter with web application firewall and Trumpet. This is in addition to our many other integrations, including the Splunk app for AWS.

In summary, we delivered a great Q3. This year’s .conf was our biggest and best ever. As always, it’s exciting to see so many of our customers and partners and hear their enthusiastic feedback about Splunk’s products and people. Customer success is our number one company priority and our efforts and investments are paying off. I’m looking forward to continuing this momentum.

Thanks again to all of our customers and partners and thanks to everybody who works at Splunk. Finally, I want to take a moment to congratulate you, Dave. As I’m sure you all saw, Dave has announced he’s going to retire.

Dave is staying on board until March of 2020 as we initiate a search for a successor and I appreciate that he’s going to stay and help with the transition. I can’t overstate what Dave has done for Splunk. His leadership, accomplishments, and the foundation he helped create will continue to serve us well. I speak for all of us at Splunk when I say it has been an honor to work side by side with Dave over the years.

Thank you so much and now, over to you, Dave.

David ConteSenior Vice President and Chief Financial Officer

Thanks, Doug. I certainly appreciate those very kind words. To open, I’m looking forward to reviewing our results following another strong quarter for Q3, which is our largest ever, and providing an update for Q4, the full year, and our outlook for our next fiscal year, Fiscal 20.

Before I do, remember that almost two years ago, I set several important and material expectations for our multi-year business transformation, from primarily a perpetual company to one that is mostly renewable, shifting our go to market strategy to drive 75% of our software sales to renewable by next year. I can tell you that our execution toward this goal has significantly exceeded the expectations we set in January of ’17 and my confidence in delivering the $2 billion revenue milestone in Fiscal 20 has never been higher.

When I retire, I’ll have spent over eight years with the company after completing this latest transition. Over the next several quarters, I’m really looking forward to helping the company extend its market leadership as the ubiquitous platform for our customers’ data.

Now, back to our report. Before I detail actual results and discuss guidance, I want to clarify a few things regarding the strength and growth of our business. I’ve said the best measure of our overall business momentum is software revenue, which is the combination of on-prem license and cloud revenues. When looking at the mix of transactions on prem, there is both a tailwind from longer duration and a headwind from fewer perpetual contracts.

When aggregating these, we estimate we’ve recognized tailwinds of about $40 million for the last nine months, i.e. year to date. However, as we said, the strategic shift to renewable contracts includes delivering more of our software via the cloud, which we all know is recognized. So, obviously, this represents a headwind to overall revenue.

Consistent with overachieving our mix shift a year early, it follows that we realized more cloud transactions than originally anticipated. Specifically, year to date, the growing contribution from cloud to total software sales has resulted in a headwind of about $43 million. So, as we’ve said, we believe the shift in both mix and duration has a net neutral impact on total software revenue as they generally offset one another and are therefore not material.

To give you a sense of just how rapidly our Cloud business is growing, the current ARR of Cloud-only is about $200 million, which is nearly double from a year ago. For simplicity, something we always strive for here, our outlook in Fiscal 20 is based on a consistent mix and duration level that we’re realizing in Fiscal 19. We expect any deltas resulting from head and tailwinds to be immaterial at this level of scale.

Now, more on FY20 in a minute. Let’s move on to the current period results. Q3 total revenues were $481 million, a 40% increase over last year. Software revenues, again, the total of license and cloud were up 49% from Q3 of last year, totaling $325 million. Cloud revenue was $45 million, up 87% over last year. Education and professional services represented 8% of total revenues, international operations contributed 24% of total Q3 revenues, and we added over 500 new customers and recorded 111 seven-figure orders during the quarter.

Now, turning to profitability and other results which are all non-GAAP, operating income was $65.4 million, representing a positive margin of 13.6%. Q3 overall gross margin was 85%, comparable on a year over year basis. Net income was $57.6 million or $0.38 per share using a weighted average share count of $153 million shares. Operating cash flow in Q3 was $59 million, while free cash flow was $52 million. And we ended the period with about $2.8 billion in cash and investments, reflecting the net proceeds of about $1.8 billion from our convertible debt offering we closed during the quarter.

Again, the best indicators of our business momentum are software revenues and also RPO. Recall that RPO includes backlog, so the total of revenues plus the change in RPO should provide a better estimate of in-period bookings in the traditional billings calculation. With that, we ended Q3 with total RPO of $950 million versus $602 million for Q3 of last year, up 58% and reflective of our bookings achievement thus far this year.

Okay. Turning to guidance — we expect Q4 revenues of approximately $560 million and non-GAAP operating margin of a positive 25% to 26%. For the full year, we are now expecting total revenues of approximately $1.74 billion, up from the $1.685 billion, and we are increasing our FY19 non-GAAP op margin target to range between 11.5% and 12% positive.

For EPS purposes, since we expect to be non-GAAP profitable for Q4 and the full year, you should use fully diluted weighted average share counts of $155 million in Q4 and $152 million for the full year. Looking forward to next year, the investments we’re making in product and field continue to fuel our growth. We expect our momentum this year will translate into next year, with FY20 total revenues of $2.15 billion, exceeding the $2 billion expectation I set two years ago.

Again, to be clear, this revenue target is based on a target mix and duration assumption for software contracts as compared this year, with any deltas expected to be immaterial. For your models, please remember that just as we saw this year, 606 causes a steeper revenue ramp during the year than we’ve seen historically. As such, I expect total revenues in 2020, Fiscal 20, will be weighted 40-60 first half to second half, with the largest seasonal impact visible in Q1.

In closing, Q3 execution was outstanding and I expect a very strong finish to the year. I’m extremely proud of everything we’ve accomplished thus far, transitioning from a $100 million private company to a public company targeting well above $2 billion in total revenue. It’s been terrific contributing for such a long time and I’ve had the pleasure and honor of working for so many great people at the company and all of you on the call. I’d like to thank all the current and former Splunkers and all the folks on the finance team. I’m looking forward to the next year here and making sure we continue to deliver in Fiscal 20 and beyond.

On that note, thanks so much and we’ll open up for questions.

Questions and Answers:


Thank you. Ladies and gentlemen, if you have a question at this time, press * and the number 1 key of your touchstone telephone. If your question has been answered or you wish to remove yourself form the queue, press the # key. Again, to get in the queue, just press * and 1.

Our first question is from John DiFucci with Jefferies. Please go ahead.

John DiFucciJefferies — Analyst

Thank you. Dave, we appreciate the long runway you’re giving your team here. It truly has been a great pleasure working with you. It really has. We’re going to miss you. It looks like we’ve got you for a while.

David ConteSenior Vice President and Chief Financial Officer

Thanks, John.

John DiFucciJefferies — Analyst

These results look really strong here, but as you guys know, there’s a question of how much of that strength is because of ASC 606 and props expanding duration of on prem term license. Dave, thanks for that $40 million of tailwind over the first three quarters of the year. We can look at it three quarters over three quarters. Could you tell us what it was this quarter? It’s probably not dividing by three. Could you break it out per quarter?

David ConteSenior Vice President and Chief Financial Officer

John, thanks for the question. Thanks for acknowledging we quantified our estimated at $40 million for nine months, but don’t forget I was explicit to point out the shift to renewable includes a shift to routable cloud. That was about a $43 million headwind for the same period.

Now, in terms of quarter impact — John, you’ve been with us since the IPO and we’ve talked about mix for so long and it was really frustrating because it would jump up and down every 90 days. That remains the case today. The best way to think about it is over not a 90-period but a nine-month period.

More importantly, if you think about the size and scale in Fiscal 20 and look comparably between Fiscal 19, now $1.740 billion, growing $2.150 billion, our model has consistent assumptions for both duration and mix. Even if there are gyrations between the two categories, it’s going to be immaterial at that level of scale.

John DiFucciJefferies — Analyst

Okay. This is something for us to chew on tonight. Thanks. That’s helpful.


Our next question comes from Michael Turits with Raymond James. Please go ahead.

Michael TuritsRaymond James — Managing Director

Hey, guys. Good evening. Dave, congrats on the long-term outlook for retirement but retirement nevertheless. You gave us a sense of what the duration was last quarter. I was wondering if you could update us in terms of where we are now with this quarter and year to date and also what impact that extension and duration might have as we come in terms of the renewal period a couple years out since we’re signing longer deals now.

David ConteSenior Vice President and Chief Financial Officer

Sure, Michael. Our year to date duration remains consistent for the year, which is about 33 months. That’s the blended duration for all of our renewable contracts, both on prem term and our subscription cloud contracts. In terms of our outlook going forward, we were modeling and setting the objective to get to 75% renewable. We thought of course, we’re going to have a recurring stable of contracts that will come up for renewal. As we’ve been accelerating toward that goal, we’re seeing that group of contracts grow beyond our original expectations based on really strong execution in the field.

When we model forward and think about the foundation that provides from a model perspective, it’s really strong and stronger than when we first set the objective originally. All that’s great on the financial model side. But more important strategically, we’ve learned it’s by far the best way to enable our customers to deploy and adopt our solutions. Customer success is number one for us. Everything that we do from the investment portfolio that we manage here is all focused on that as the prime directive. Having these kinds of contracts out in the market for our customers to leverage really puts them in great position to consume our products.

Michael TuritsRaymond James — Managing Director

Thanks very much, Dave. Doug, you made a couple comments about IoT becoming a hotter area. Can you talk a little bit more specifically about the investments you’re making in IoT and business non-IT analytics in general and where that money is going and what we should expect in terms of your strategy?

Douglas Merritt President and Chief Executive Officer

Absolutely. The key IoT announcement we made at .conf was the release of industrial asset intelligence, which is a collection of dashboards, queries, alerts focused specifically on predictive maintenance in industrial shops. However, the biggest issue we’ve talked about for a number of years on extending beyond the technical footprint within IT and cybersecurity is making it easier for less technical people to play with the data in Splunk and then take actions on that data as well.

There were a host of announcements we made at .conf to help lower that bar, from our new mobile platform to augmented reality in a future virtual reality framework that makes it far easier for people to visualize what’s happening in the environment around them, the demo that Jesse, the leader of that product gave. We introduced a product called Business Flow, which represents the data within Splunk through a process journey.

That is, I think, a much more approachable interface for anyone that’s involved in marketing, operations, manufacturing to see how their reality of their environment is performing. That was prompted by one of our customers to help them see customer interaction patterns through the machine data. We introduced natural language processing as an application so that you can actually have a verbal interaction with Splunk.

So, we’re attacking it from a multitude of angles so that we can continue to broaden or allow our customers to broaden from their more technical personnel.


Thank you. Our next question comes from the line of Raimo Lenschow with Barclays. Please go ahead.

Raimo Lenschow Barclays — Analyst

Thank you. Dave, congrats from me as well, although I’m slightly confused because you’ve just done 606 and you’re done with the subscription transition and now you ride off. You should have done it the other way. Doug, you’ve been at AWS. Most of us were at re:Invent. Can you talk about the changing nature of competition you see from cloud that are all popping up there? What are you seeing from the market on that one?

Douglas Merritt President and Chief Executive Officer

From a day in, day out basis, we haven’t seen a change in competitive dynamics. We continue with really impressive win rates. We continue to work within accounts to allow them to understand the power that Splunk provides. That winds up helping us a lot in the competitive landscape.

Within AWS and the cloud vendors, those are really complex environments, as we all just got to see, so many different services and capabilities can be online all the time, every one of those exuding different kinds of data. They’ve got different attempts within AWS to help capture that data so AWS customers can make sense of it. We integrate with all those different services and different data capture devices.

We were first to the table with Cloud Watch to have our integration ready. We were right there with them with their latest announcement related to the insights capability released in Cloud Watch as well as Security Hub. Our focus and why that innovation agenda is so important at .conf and why we’re pushing hard on the product front is to stay in front based on customer needs and customer feedback the different capabilities being released around us.

Raimo Lenschow Barclays — Analyst

I might have missed it, but did you talk to the mix on security and other use cases this quarter?

Douglas Merritt President and Chief Executive Officer

No, we didn’t talk about it because it was uneventful and consistent with what we’ve been experiencing over the last handful of quarters.


Thank you. Our next question comes from Philip Winslow with Wells Fargo.

Philip WinslowWells Fargo Securities — Managing Director

Two quick questions, one a quick housekeeping item for you, Dave — you mentioned duration of 33 months for the nine months this year. What was that metric for the nine months last year? Also, for the team, just a broader question on pricing and particularly larger deals, any update that you have on pricing, particularly as you get to these larger deals that Doug highlighted on the call, it seems like you were talking about multiple different use cases here, way more data volume, how is that impacting the pricing conversation when you’re talking about going down the pricing curve?

David ConteSenior Vice President and Chief Financial Officer

First, as it relates to duration, let’s just say unlike the Raiders, Splunk is leading the league and we’re putting up a lot of points on the scoreboard. I’d love if the Raiders could replicate that. Duration again for the nine months this fiscal year was 33, the comparable nine-month prior year was about 26. Then as it relates to pricing, Doug?

Douglas Merritt President and Chief Executive Officer

My favorite initial lead-in for pricing is folks are never happy with the price, but the one thing I hear from our customers is they’re always happy with the value. The question for pricing continues to be how do we provide predictability to our customers. I think we’ve done a better job over the past couple years of making customers aware of the possibility of unlimited contracts and other buying vehicles that lock down their perspective and how much they’re going to owe Splunk.

The biggest impact the last nine months has been that shift to term. Customers can lock in a three-year perspective of either consistent data usage or in many cases escalating data usage. It’s a little bit easier to give them a little bit more than they might need without the permanent impact you’d have on a perpetual contract we had in the past. I think some of that pricing noise is going down. We’re never done. We are always focused on making it more transparent and easier for customers. Stay tuned for additional focus areas to help there.


Thank you. Our next question comes from Kash Rangan from Bank of America Merrill Lynch. Please go ahead.

Kash RanganBank of America Merrill Lynch — Analyst

Congratulations, this is spectacular. You guys are accelerating at scale while cancelling out the headwinds versus the tailwinds. My question for you is as you look at the use case, clearly, the option is there to grow to be much larger, $5 billion, $6 billion, who knows? But you look at successful companies like a or Workday, they always had a second act, third act, or fourth act.

Is there going to be a fourth use case, fifth use case that could end up being a big hundred-million opportunity or billion-dollar opportunity? It’s hard to think of Splunk going from $2 billion to $6 billion while maintaining the same mix of use cases such as security, operations, SIM, if you will, and IT operations. There’s got to be something, a third act, a fourth act. How do you envision the future for Splunk four to five years from now? That’s it for me. Thank you.

Douglas Merritt President and Chief Executive Officer

First of all, it’s hard to believe how we get to $5 billion to $6 billion with security and IT. I think we can get to $5 billion to $6 billion with security and IT. We do have lots of other plans.

When I look at the installs that we have across our existing customer base and how broadly we are being used, what data sources we’re ingesting across the IT set of use cases and how much utilization we have at ITSI and how many additional apps we’ve deployed they’ve built themselves or they’ve downloaded from Splunk just within IT, we are a fraction of what is necessary for the vast majority of the customer base. I’d say 95% of the customer base is still not getting the full analytics and monitoring detection and investigation capability they could or should just within security and IT.

That said, the power of Splunk, we talk about a percentage of business every quarter, where a sales rep has said they bought this solution for a security use case or IT use case or non-security use case. We know that’s the beginning of the journey. If we’re successful, they’re implementing a whole host of use cases outside of IT and security.

As we see patterns emerge, we’ll start to facilitate the ecosystem to release apps we’ll highlight or build these apps ourselves. We do believe at Splunk there’s a huge opportunity — again, probably tens of thousands to hundreds of thousands of potential applications to recover the needs of the functional users and the different industrial use cases in the industrial IoT or IoT segment.


Our next question is from Fatima Boolani with UBS. Please go ahead.

Fatima Boolani UBS Securities — Analyst

Good afternoon. Thank you for taking my question. Doug, you mentioned again this quarter you have a ton of IT ops use cases in your prepared remarks and to Dave’s point around the business mix being consistent from a use case perspective, I wanted to understand from your view what you need to do either from the technical or go to market perspective to replicate the type of success you’ve had in the security arena. As we think about DevOps becoming the more influential buyer in the enterprise, how are you positioned from that standpoint?

Douglas Merritt President and Chief Executive Officer

Thanks, Fatima. A lot of the quick rise in security was two things. One, obviously, cyber is becoming a critical component for everyone to understand and address, so that alone with the board scrutiny has become a heavy drumbeat to make sure you’ve got the degree of insight you need in your landscape and two, there was a clear replacement category. There’s this whole SIM market and the way Splunk approaches that problem because of the flexible underpinnings of Splunk Enterprise was pretty differentiated.

In the IT ops arena, ITSI, the whole orientation around ITSI was to provide that same degree of flexibility in that IT operations side. It took ES five years to get significant foothold and traction. I think the first coding on that was done in ’09 and ’10. So, it takes a while for these products to mature and right now, we’re in the third year with ITSI.

We are starting to see more completeness with ITSI and more situations where a 20-40-year old systems management framework is now being replaced with ITSI. So, my hope and Rick’s orientation is that with continued investment and focus, we can be talking in a future call about the replacement cycle opportunity on the IT ops side.

The other piece that’s equally important — replacement within that heavyweight IT ops segment, a lot of the energy of new workloads is going to next gen DevOps. We have a whole host of different insights, the lighter weight applications was really primarily focused on DevOps, a true next gen environment where every developer owns their code end to end without that handoff. Stay tuned for more releases in that category. In addition to the SOC and NOC, the next gen DevOps portfolio is one we’re really excited about and developing aggressively toward and in the strategic landscape is something we’re looking toward as well.

Fatima Boolani UBS Securities — Analyst

Dave, a quick follow-up for you. You talked about the accelerated shift toward more the routable business being a pretty big drag on your cash flow profile this year. If you could, give us an update on how that should shake out as we barrel through the end of the year. At a very high level, what does that trajectory for cash flow from operations look like next year as we think about that and also internalize the headquarters-related CapEx you’re going to be doing next year. That’s it for me. Thank you so much.

David ConteSenior Vice President and Chief Financial Officer

So, as we mentioned at the beginning of the fiscal year, we expected Fiscal 19 to be a cash flow trough as we made a material shift toward renewable. As we know, those are billed typically on an annual basis versus the full contract value. With the over-achievement on that objective in terms of renewable, that would add additional pressure form a cash flow perspective, but that’s been offset by strong over-delivery of our plan in the field.

Obviously, the fourth quarter is our largest quarter of the year and we have plenty of execution that we have to go nail down and that is going to ultimately translate to the amount of cash flow that we generate for Fiscal 19 but I’m confident we’re on the right direction and ’19 will be that trough year.

When you look forward, what about cash flow going forward? When you see stability in the percentage of our business that is renewable and stability or consistency in terms of duration, then the business starts to normalize form a cash flow yield perspective. That’s what we expect to see for Fiscal 20.

As it relates to CapEx, we are a fairly light capital expenditure-consuming company, outside of the facility work that we do in terms of global footprint. We’re excited about many of the spaces we’re developing around the world and of late, we’ve made some significant investments in terms of creating the right footprint for Splunk in the Bay Area.

But like we did a couple years back when we expanded in San Francisco and South Bay at the same time, we quantified what we expected the incremental or total cash flow or capital expenditures and therefore, the impact of free cash flow would be from those facility buildouts and we’ll do the exact same thing as we finalize our plans for our latest phase of facility expansions.


Our next question comes from Walter Pritchard with Citi. Please go ahead.

Walter PritchardCitigroup — Analyst

A couple questions, Dave, for you — on the duration impacts, a lot of us focus on the license impact. Can you help us understand how you’re getting to the cloud impact and if there’s any impact as it relates to the amount of booking you’re deferring into maintenance and how that may come back in any way?

David ConteSenior Vice President and Chief Financial Officer

Thanks, Water. There’s been focus on license, which makes a lot of sense. Candidly, the reason I have been very deliberate over the last how many periods to point out software revenue as the best way to look at our growth, you have to contemplate how much of our software is being delivered in the cloud that doesn’t hit the license line.

So, when we look at the drag or the headwinds from the routability of cloud, we look at it in terms of how much is it growing as a percentage of our business that is in lieu of what would otherwise in our model be on prem, i.e. the on prem hits the license line, cloud hits service line, you’ve got to look at those two sides of the equation together.

Walter PritchardCitigroup — Analyst

On the margins for next year, I know you didn’t give an explicit — I think at analyst day, you talked about a 14% operating margin in 2020. Is that still the way we should think about profitability next year?

David ConteSenior Vice President and Chief Financial Officer

We didn’t explicitly update what we provided at analyst day. As is consistent with our cadence on this call, we focus on the visibility we have and making sure we give that to all your folks in terms of the revenue. We’ve got to get to the end of the fiscal year, measure up the beans and look at the investments we have on the table and we’ll provide an update at that time.

Walter PritchardCitigroup — Analyst

Thank you.


Thank you. Our final question will come from Steve Koenig with Wedbush. Please go ahead.

Steve KoenigWedbush Securities — Managing Director

Thanks for squeezing me in. What I’d love to ask you guys about is if you can, give us a little color — do you have a playbook for converting perpetual customers and what does that playbook consist of and how do the mechanics of that work? Also, I’m curious to know are there any incentives for cloud sales this year over and above any incentives for recurring sales? What’s driving the strong Splunk Cloud adoption and execution this year beyond any sales incentives.

David ConteSenior Vice President and Chief Financial Officer

Let me talk about sales incentives for a second — we’ve been very transparent that we’ve been on this multi-year journey having been born as a perpetual company to one that wants to deliver our solutions, obviously, on prem, but also in the cloud in leveraging the renewable structure. I think we were pretty clear that as we looked to accelerate our move in terms of that shift, we had this multi-year adjustment to how we align incentives in the field, moving where perpetual was the first-class citizen to now having renewable be the first-class citizen.

As it relates to Cloud, what we experience in the field, it is absolutely most relevant around use case, customer preparedness, the needs and requirements in terms of how they want to leverage our technology, ultimately differentiates between are they going to use a renewable term contract on prem, are they going to use a cloud instance for that particular data source?

We continue to see a very high percentage of customers that are with us in the cloud are also on prem customers. But unlike the incentive plan where we say perpetual shouldn’t be first class, we don’t go into that level of specificity on cloud because it’s so customer-driven.

Steve KoenigWedbush Securities — Managing Director

I’ll leave it there. Thanks again.


Thank you. Ladies and gentlemen, this concludes our Q&A session today. I would like to turn the call over to Ken Tinsley for any final remarks.

Ken TinsleyCorporate Treasurer and Vice President of Investor Relations

Thank you, Carmen, I appreciate that. Thanks, everybody for joining us. Have a great evening and enjoy the holidays.


Ladies and gentlemen, with that, we thank you for participating in today’s conference. This concludes the program and you may all disconnect. Have a wonderful night.

Duration: 65 minutes

Call participants:

Ken TinsleyCorporate Treasurer and Vice President of Investor Relations

Douglas Merritt President and Chief Executive Officer

David ConteSenior Vice President and Chief Financial Officer

John DiFucciJefferies — Analyst

Michael TuritsRaymond James — Managing Director

Raimo Lenschow Barclays — Analyst

Philip WinslowWells Fargo Securities — Managing Director

Kash RanganBank of America Merrill Lynch — Analyst

Fatima Boolani UBS Securities — Analyst

Walter PritchardCitigroup — Analyst

Steve KoenigWedbush Securities — Managing Director

More SPLK analysis

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A sneak peek into Dubai’s citywide blockchain strategy – Express Computer

Dubai Data Strategy is one of the world’s most comprehensive and ambitious data initiatives to leverage Dubai Data to enable Data Excellence and Smart City Transformation. The City and Emirate of Dubai’s mission is to empower the usage of data. Dubai Government’s policy framework is intended to develop and implement a culture of data sharing and evidence – based decision making in Dubai and will serve as a guide for all involved in the sharing of data. Launched by Crown Prince of Dubai, His Highness Sheikh Hamdan bin Mohammed Al Maktoum, establishes a roadmap for the introduction of Blockchain technology for Dubai and the creation of an open platform to share the technology with cities across the globe.

According to the Dubai Data Economic Impact Report, by KPMG the economic impact of data is expected to reach $2.8 billion per year as of 2021. The report revealed that by sharing 100% of government data, Dubai stands to generate an additional value of $6.6 billion. Express Computer interviews H.E Dr. Aisha Bint Butti Bin Bishr, Director General, Smart Dubai. She shares Dubai’s vision, strategy and the pilots running to make the city a blockchain powered city

Wanting to create the world’s first blockchain-powered city is a bold vision – why does the Dubai government have so much confidence in blockchain? What was the empirical evidence that convinced the government that this is worth investing time, money and resources into?

Over the last 40 years, Dubai has succeeded in transforming into a global city and regional business and tourism hub. It has established an international reputation as an economic and investment center, attracting thousands of international companies that establish their regional headquarters in the Emirate’s many free zones. The Emirate has been able to achieve this success by diversifying its gross domestic product through vast development in sectors such as tourism, real estate, retail, travel and logistics. It has also been recognized for attracting skilled talent from around the world. Underlying this economic growth has been a strong and productive Government sector that has embraced technology and committed to excellence and digital city transformation. The city’s technological journey began in 1999 with the announcement of its first ICT strategy which was followed by the launch of Dubai Internet City, Dubai e-government, Dubai Smart Government and most recently the Smart Dubai Office.

Today, Dubai is amongst the world’s leading smart cities in its adoption of new technology and pioneering of innovative smart pilots. Recognizing the potential impact of the blockchain technology on

city services coupled with a worldwide blockchain adoption trend that saw $1.1 billion invested by the

private sector in blockchain technology in 2016 alone, Dubai launched a city wide blockchain strategy in

October 2016 with the objective of becoming the first blockchain powered city by 2020. Dubai’s rapid development in various economic sectors meant that traditional processes needed to be continuously updated to ensure efficiency and speed. Government effectiveness became increasingly imperative especially in Government to Consumer (G2C) and Government to Government (G2G) services.

In particular, the growth of the business, construction and tourism sectors saw the Government needing tighter controls over activities such as permissions (e.g. permits and No Objection Certificates (NoCs) and transaction verification and tracking. Simple processes were getting ever more complicated with the addition of activities that were now in demand by the city’s new businesses and residents. It was clear that Dubai needed an agile solution to streamlining its growing Government processes.

Dubai saw potential in blockchain as the solution. Blockchain is the technology that utilizes open distributed databases of transactions involving value. Its coding method allows for secure record keeping in distributed online ledgers where members share and confirm information with no central authority. Moreover, the blockchain economy is witnessing rapid growth with over 600 new companies

active in blockchain today and an expected market value of $290 billion in 2019.

Finally, Dubai’s adoption of Blockchain technology at a city-wide scale comes at a time when the technology is increasingly being recognized as the ultimate trust machine. Blockchain eliminates the

need for trusted third parties in transactions, an attribute which would contribute significantly to simplifying Dubai Government’s evolving processes. The adoption of blockchain technology applies to

the smart governance, smart economy and smart people areas of the United for Smart Sustainable Cities (U4SSC) as the next sections will showcase.

What are some targets that Dubai has set for itself, in its journey to become a blockchain enabled city?

A detailed roadmap that is organized around the blockchain strategy’s three pillars has been developed.

This roadmap defines the way forward for Dubai’s blockchain ambitions. For each pillar in the strategy, the city has a plan with actionable initiatives.

A. Government Efficiency

Over 2017 and 2018, the Smart Dubai Office has been identifying and piloting use cases of the most

applicable government services on Blockchain. The first Blockchain use case titled the Payment

Reconciliation and Settlement System went live in September 2018, with many more planned to roll in

2019. This new system reconciles payments between government entities and banks within seconds,

compared to a process that earlier took 45 days!

The most applicable services are those that would benefit the most from the implementation of

blockchain technology due to their need for third party elimination, transaction ledgers, smart controls

and/or automation. So far over 20+ use cases have been identified and are currently going through pilot phases to live implementation.

The piloting of blockchain has been done across the city in several sectors such as energy, transport and

logistics, tourism, health, education and employment, economic development, safety and justice, social

services, municipal and land works and smart districts. This process involved the key Government

champions in each sector such as the Dubai Electricity and Water Authority, the Roads and Transport

Authority, the Dubai Tourism and Commerce Marketing Department, the Department of Economic

Development, Dubai Police, Dubai Health Authority and many more public sector stakeholders that are

key to sectoral adoption.

In order to roll out the blockchain pilots in an organized approach, Dubai recognized the importance of

putting in place a governance framework that would ensure that all stakeholders are aware of their

roles and are receiving the support they need. For this purpose, the Smart Dubai Office had rolled out

workshops with each stakeholder with an objective to identify the best potential pilots in their sector

and provide them with the technical standards and unified protocols for implementing their pilots.

Moreover, it constantly supports each entity in selecting a technical partner to implement the

blockchain pilots.

By opening the door to blockchain technical partners from around the world to come to Dubai and pilot

use cases in each entity, Dubai is stimulating the blockchain market and its own economy. In brief, the

city is creating demand for businesses to thrive through innovation.

B. Industry Creation

In addition to rolling out blockchain in the Government, Dubai aims to create a blockchain industry where private companies and start-ups thrive and innovate. To achieve this aim, it has set three key action areas that would support in creating an enabling eco-system that would empower businesses as follows:

i. Policy Development

The policy implications of blockchain implementation will be continuously assessed and policy will be

developed in a number of areas such as security, consumer rights, start up support and enablement, and

financial technology. We are currently running workshops with public and private sector entities to

identify challenges entities are facing before Blockchain implementation, and will finalize our policies

keeping in mind feedback from all.

ii. Startup Accelerators

Smart Dubai has participated in two accelerators – the Dubai Future Accelerators and the

Startupbootcamp Smart City Dubai Accelerator – inviting blockchain startups and solution providers

from around the world to work with local government entities and test blockchain implementation in

the city.

iii. Smart Dubai Global Blockchain Challenge

Hosted annually, the Global Blockchain Challenge invites startups from across the globe to pitch their

Blockchain ideas that can be implemented in Dubai. In May 2018, the 2nd Smart Dubai Global

Blockchain Challenge saw over 200+ applications from 85 cities to showcase their best and brightest

Blockchain solutions. We shortlisted the top 17 entities and flew them to Dubai to present at the

Future Blockchain Summit, the world’s largest Blockchain conference, where we awarded the top 3


C. Thought Leadership

In this pillar, Dubai aims to lead the global thinking on blockchain technology and become the hub for

blockchain intellectual capital and skill development.

For this purpose, it has set four key action areas as follows

i. Skill Development

Dubai aims to become the regional and global hub for blockchain skill development by offering the most

comprehensive and frequent training programs aimed at blockchain coders, policy makers, and

strategists and project managers.

ii. Intellectual Capital – Smart Cities Global Network

Smart Dubai aims to create and share intellectual capital related to its blockchain adoption through the

development of case studies for each of its city pilots. To achieve that goal, Smart Dubai launched the

Smart Cities Global Network in April 2018. The Smart Cities Global Network is the largest international

network of smart city stakeholders. Smart Dubai aims to bring together partners that share it’s passion

for advanced technology, Fourth-Industrial-Revolution breakthroughs, smart living, and spreading

happiness in the community with tech-enabled, human-centric services. Network members include

representation from Government, the private sector, research centers, academic institutes, subject matter experts and the media. The network approach is agile and flexible without fixed time commitments and governance structures. Instead, members can join the network online and become

visible to one another through the first comprehensive global smart city directory. Through this visibility, Smart Dubai and other network members may reach out to one another to collaborate on exchanging knowledge around implementation of smart city and technological initiatives, ecosystem enablement efforts supporting start-ups and entrepreneurs, skills development, publications, events,

awards and more.

iii. Blockchain Conferences

Dubai has been hosting blockchain experts and speakers on a regular basis in order to stimulate debate

and discussions around the most pressing and controversial issues surrounding the adoption of

blockchain technology on a city level. The Future Blow The Future Blockchain Summit May 2018 was the

largest Blockchain Conference ever held with over 8,000 attendees and 134 speakers.

iv. Academic Sector Activation

We are heavily engaging schools and universities in all blockchain activities such as pilot development,

training, speaker events, and intellectual capital building. As part of Dubai’s 10X program, a program

launched to make Dubai 10 years ahead of all other cities across all industry sectors, Smart Dubai is

soon launching the Smart City Academy, which will be the world’s first open platform for decentralized

education and skill development that will run on Blockchain.

What kind of investment has gone into developing Blockchain capabilities and how will ROI be


Collaboration has always been the core of Smart Dubai’s work. Instead of pouring in billions of dollars to

create new infrastructure catering to every different industry sector, we are working with government

and private sector partners across all dimensions, leveraging and enhancing existing capabilities.

Our government and private sector partners are domain experts in their respective fields, we do not

want them to worry about the hardware and software of setting up a Blockchain network, we instead

want them to identify and implement Blockchain use cases, relevant to their sector, that will benefit

residents and visitors of the city most. With have therefore partnered with IBM to launch the Dubai

Blockchain Platform, which will be the first locally built and hosted platform. Paid for using a subscription model, the platform will be the core infrastructure through which all Dubai government

blockchain applications will run. Launching this platform also contributes to our goal of having a unified

and integrated citywide ICT architecture for Dubai, which will make digital transactions and data

transfer between entities much more efficient and seamless.

What would you say are some of the challenges in pursuing this Blockchain strategy, and what

has Dubai done to try to overcome them?

Setting up a Blockchain network ideally has three phases, Pre-Implementation, Implementation and Post

Implementation. Across all three phases, firms that are involved in setting up a Blockchain network will

come across various challenges, some of which include scalability, regulation, ownership, interoperability, governance, etc. As the technology is quite nascent, there is no global framework on how to solve these challenges. As Smart Dubai, we have continuously focused on the advantages of collaboration for any initiative, therefore we have been hosting regular Blockchain Policy Workshops bringing the public and private sector together to identify such issues and come to a mutual consensus on how such challenges should be overcome. We hope to announce the city’s official Blockchain implementation policies in early 2019.

How is the strategy set to advance in the next year? Could you elaborate on what the next steps

in this journey would be?

Through 2017 and 2018 we underwent most of the ideation or pre- implementation phase. With the

Dubai Blockchain Platform now launched and the Blockchain Policies being launched soon, we will be

going live with our identified use cases in 2019 and 2020.

The Boundary Between Our Bodies and Our Tech – Pacific Standard

(Illustration: Emiliano Ponzi)

Many of the boundary lines in our lives are highly literal, and, for the most part, this is how we’ve been trained to think of boundaries: as demarcations shored up by laws, physical, legal, or otherwise, that indicate exactly where one thing ends and another begins. Here is the border of your property; here is the border of your body; here is the border of a city, a state, a nation—and to cross any of these boundaries without permission is to transgress. But one of the most significant boundary lines in our lives is not this way, and one piece of ubiquitous technology is making this line increasingly permeable and uncertain, at a cost that we may only be starting to comprehend.

Here’s a thought experiment: Where do you end? Not your body, but you, the nebulous identity you think of as your “self.” Does it end at the limits of your physical form? Or does it include your voice, which can now be heard as far as outer space; your personal and behavioral data, which is spread out across the impossibly broad plane known as digital space; and your active online personas, which probably encompass dozens of different social media networks, text message conversations, and email exchanges?

This is a question with no clear answer, and, as the smartphone grows more and more essential to our daily lives, that border’s only getting blurrier.

Michael Patrick Lynch, a professor of philosophy at the University of Connecticut and director of the school’s Humanities Institute, which promotes interdisciplinary research, says that the notion of an “extended self” was coined by the philosophers Andy Clark and David Chalmers in 1998.

“They argued that, essentially, the mind and the self are extended to those devices that help us perform what we ordinarily think of as our cognitive tasks,” Lynch says. This can include items as seemingly banal and analog as a piece of paper and a pen, which help us remember, a duty otherwise performed by the brain. According to this philosophy, the shopping list, for example, becomes part of our memory, the mind spilling out beyond the confines of our skull to encompass anything that helps it think.

“Now if that thought is right, it’s pretty clear that our minds have become even more radically extended than ever before,” Lynch says. “The idea that our self is expanding through our phones is plausible, and that’s because our phones, and our digital devices generally—our smartwatches, our iPads—all these things have become a really intimate part of how we go about our daily lives. Intimate in the sense in which they’re not only on our body, but we sleep with them, we wake up with them, and the air we breathe is filled, in both a literal and figurative sense, with the trails of ones and zeros that these devices leave behind.”

This gets at one of the essential differences between a smartphone and a piece of paper, which is that our relationship with our phones is reciprocal: We not only put information into the device, we also receive information from it, and, in that sense, it shapes our lives far more actively than would, say, a shopping list. The shopping list isn’t suggesting to us, based on algorithmic responses to our past and current shopping behavior, what we should buy; the phone is.

At the beginning of his recent book, The Internet of Us, Lynch uses a thought experiment to illustrate how thin this boundary is. Imagine a device that could implant the functions of a smartphone directly into your brain so that your thoughts could control these functions. It would be a remarkable extension of the brain’s abilities, but also, in a sense, it wouldn’t be all that different from our current lives, in which the varied and almost limitless connective powers of the smartphone are with us nearly 100 percent of the time, even if they aren’t—yet—a physiological part of us.

According to data released in 2017 by the analytics firm Flurry, American consumers spent five hours per day on their mobile devices, and showed a dizzying 69 percent year-over-year increase in time spent in apps like Facebook, Twitter, and YouTube. The prevalence of apps represents a concrete example of the movement away from the old notion of accessing the Internet through a browser and the new reality of the connected world and its myriad elements—news, social media, entertainment—being with us all the time.

When Moira Weigel, a writer and junior fellow at Harvard University, was researching her book, Labor of Love: The Invention of Dating, she found that 2009, as the Facebook and Twitter mobile platforms were taking off and our social media identities became increasingly woven into our daily life, seemed to be a focal point in the transition away from separate notions of online and IRL. She points to online dating as a good example. Even if you didn’t meet someone on an app, you wouldn’t go out with them before checking out their Facebook profile or their Instagram. Our online identities had become a part of who we are in the world—whether we were aware of it or not.

“In the ’90s and even through the early 2000s, for many people, there was this way of thinking about cyberspace as a space that was somewhere else: It was in your computer. You went to your desktop to get there,” Weigel says. “One of the biggest shifts that’s happened and that will continue to happen is the undoing of a border that we used to perceive between the virtual and the physical world.”

The debate over what it means for us to be so connected all the time is still in its infancy, and there are wildly differing perspectives on what it could mean for us as a species. One result of these collapsing borders, however, is less ambiguous, and it’s becoming a common subject of activism and advocacy among the technologically minded. While many of us think of the smartphone as a portal for accessing the outside world, the reciprocity of the device, as well as the larger pattern of our behavior online, means the portal goes the other way as well: It’s a means for others to access us.

Most obviously, this can take the form of the omnipresent harassment that many people experience online, as well as more specific tactics, like revenge porn and the leaking of nude pictures; doxxing, or the revealing of someone’s personal details; and swatting, the practice of calling a SWAT team to an individual’s home under false pretenses.

Less clear to most people, however, is the extent to which the companies that make the technology, apps, and browsers that we use are not just tracking but shaping our behavior. While this issue has recently come to the fore as a result of revelations like the Cambridge Analytica scandal, Weigel sees the unfettered access to our data through smartphone and browser use of what she calls the Big Five tech companies—Apple, Alphabet (the parent company of Google), Microsoft, Facebook, and Amazon—as a legitimate problem for notions of democracy. Thanks to the border-breaking nature of these technologies, and particularly the smartphone, the success of these companies has put an unfathomable amount of wealth, power, and direct influence on the consumer in the hands of just a few individuals—individuals who can affect billions of lives with a tweak in the code of their products.

“This is where the fundamental democracy deficit comes from: You have this incredibly concentrated private power with zero transparency or democratic oversight or accountability, and then they have this unprecedented wealth of data about their users to work with,” Weigel says. “We’ve allowed these private companies to take over a lot of functions that we have historically thought of as public functions or social goods, like letting Google be the world’s library. Democracy and the very concept of social goods—that tradition is so eroded in the United States that people were ready to let these private companies assume control.”

Considering the magnitude of the iPhone’s impact, it’s hard to believe that it came out barely over a decade ago. But while the influence of both the phone itself and the tech revolution as a whole can often feel irresistible—look no further than those usage numbers—there are measures that could be taken to help shore up our crumbling borders.

Tim Hwang, a writer and researcher in San Francisco who used to work as the global public policy lead for artificial intelligence and machine learning at Google, has thought extensively about how these devices foster the functioning of the collective in addition to the individual. About a decade ago, he explains, the rhetoric around the Internet was that the crowd would prevent the spread of misinformation, filtering it out like a great big hive-mind; it would also help to prevent the spread of things like hate speech. Obviously, this has not been the case, and even the relatively successful experiments in this, like Wikipedia, have a great deal of human governance that allows them to function properly. He says that the pessimism resulting from this realization has led us to give power to the platforms so that they can regulate themselves, like allowing Facebook to tell us what’s true and what’s not, but that there is another approach to the way we actually exist in these spaces.

“Are there tools, are there designs we can put in place to allow communities to do a better job at self-governance?” Hwang asks. “Do we want to give more moderation to particular users? Does the platform want to grant users more power to control issues of harassment and hate speech, knowing that, in some cases, it might be over-applied?”

Weigel sees two potential opportunities for limiting the amount of influence the Big Five has on consumers. The first would be legal; she cites a growing body of work exploring possible antitrust suits designed to break up these companies. Writing in Logic, a magazine Weigel co-founded, K. Sabeel Rahman, an associate professor of law at Brooklyn Law School who writes about inequality and democracy in the modern economy, compares these potential efforts to those that broke up the industrialists in the late 19th and early 20th centuries. “Today, as technology creates new forms of power, we must also create new forms of countervailing civic power,” Rahman writes. “We must build a new civic infrastructure that imposes new kinds of checks and balances.”

The other option is for workers, many having entered tech for idealistic rather than financial motives, to help regulate and restrict their own employers. Many have already begun to express regret for the effectiveness of their innovations, a phenomenon perhaps best exemplified by the Center for Humane Technology, led by former Google design ethicist Tristan Harris. But Weigel views these efforts with suspicion due to the idea that they often follow the same playbook as the paternalistic, top-down design infrastructure that created these problems in the first place.

A more fitting example of positive change, Weigel suggests, took place in June, when Google employees successfully campaigned for the company to stop its work with the Pentagon on Project Maven, a program that improved the effectiveness of military drones.

“Reading the New York Times, especially until about six months ago, whenever this tech backlash started, I feel like you could be forgiven for thinking there were five people in the tech industry,” Weigel says, laughing. “In fact, these are huge companies that employ tens of thousands of people, many of whom don’t necessarily agree with everything the companies are doing. I think that engineers have enormous power to influence these companies for the better right now.”

Lynch, the University of Connecticut philosophy professor, also believes that one of our best hopes comes from the bottom up, in the form of actually educating people about the products that they spend so much time using. We should know and be aware of how these companies work, how they track our behavior, and how they make recommendations to us based on our behavior and that of others. Essentially, we need to understand the fundamental difference between our behavior IRL and in the digital sphere—a difference that, despite the erosion of boundaries, still stands.

“Whether we know it or not, the connections that we make on the Internet are being used to cultivate an identity for us—an identity that is then sold to us afterward,” Lynch says. “Google tells you what questions to ask, and then it gives you the answers to those questions.”

And we should especially recognize this when it seems least clear: in those situations online that most closely seek to emulate the structures and dynamics of real life. Like, for example, your relationships. It isn’t enough that the apps in our phone flatten all of the different categories of relationships we have into one broad group: Friends, Followers, Connections. They go one step further than that.

“You’re being told who you are all the time by Facebook and social media because which posts are coming up from your friends are due to an algorithm that is trying to get you to pay more attention to Facebook,” Lynch says. “That’s affecting our identity, because it affects who you think your friends are, because they’re the ones who are popping up higher on your feed.”

Analysts Weigh In On Apple, Post-Trump Tariff Threat –

Analysts are sharing their thoughts on what will happen to Apple if President Donald Trump’s threat of new tariffs on iPhones goes into effect. Days before a summit with Chinese President Xi Jinping, President Trump warned that he might slap a 10 percent trade tariff on iPhones and laptops imported from China.

“Maybe. Maybe. Depends on what the rate is,” Trump said in an interview with The Wall Street Journal (WSJ). “I mean, I can make it 10 percent, and people could stand that very easily.”

Apple’s products are currently exempt from the trade tariffs, but the company’s stock was down nearly 2 percent in after-hours trading. While Apple declined to comment on this recent report, there has been speculation that Apple would have to raise prices on some of its products if they were subject to the tariff on Chinese imports. If the tech giant doesn’t raise prices, it could take a hit to profit margins.

While Trump’s threat of a 10 percent tariff on iPhones “could simply be a negotiating tactic ahead of the G20 Summit later this week,” UBS said, the firm estimated that a 10 percent tariff would represent a $1.5 billion hit to Apple’s earnings. If the tariff goes up to 25 percent, UBS said “the impact would be [about] $3.8 billion or $0.83 in [earnings per share (EPS)],” according to CNBC.

Wedbush believes the threat of higher tariffs “is all part of a broader negotiation with China as talks heat up over the next week.”

Baird noted that “there’s little question that higher iPhone prices, due to potential tariffs, would likely negatively impact demand and profitability at some level. We certainly acknowledge the near-term risk, but remain positive on the long-term position and would buy on weakness. …Tariffs on imported iPhones and Macs could force [Apple] to raise prices, which in turn would likely dampen overall demand. Reduced demand in the U.S. would also negatively impact the assembly of iPhones and other Apple products in China. It’s a lose-lose scenario.”



Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out the latest PYMNTS report on Mobile Order-Ahead

Visa’s Connected Car Guru On How Payments Will Drive Auto Innovation –

It’s a time that can feel rushed, and requires concentration and focus, but also provides consumers used to multi-tasking with loads of unused time. It’s the good, old-fashioned commute.

With the rise of connected cars (and soon autonomous vehicles), that commute will all but certainly undergo a major transformation, one that promises to benefit payments and commerce operators.

Further proof of that future — along with fresh details about how that automotive ecosystem will emerge — was provided this week via a new effort involving Visa and GM, one of the long-standing automotive original equipment manufacturers (OEMs). In a new PYMNTS interview, Karen Webster caught up with Bisi Boyle, VP of IoT global connected car at Visa, about that effort — a “hackathon” competition for new automotive payments and commerce technology at the LA Auto Show — and the main trends in that emerging Mobility-as-a-Service (MaaS) ecosystem.

The opportunity is clear. The Digital Drive Report, a collaboration earlier this year between PYMNTS and Visa, found that 135 million U.S. commuters already spend $212 billion annually on commerce in their cars as they drive to and from their workplaces and homes. However, 66 percent of commuters who make mobile order-ahead purchases today would do so more often if in-vehicle commerce was available in their cars.

Additionally, 21 percent of commuters who do not currently connect to the internet while commuting would be interested in owning a self-driving car — another big opportunity for commerce. After all, if one takes driving out of a commuter’s hands, those hands might find their way to mobile devices or in-car touchscreens, or commuters could utilize voice-activated assistants, to complete shopping tasks.

That’s not all that has been promised by the new automotive ecosystem being built. As told by trends and interests from the LA Auto Show and that Visa-GM hackathon, there seems to be solid consumer demand for in-vehicle technology that can handle preventative maintenance, for instance.

According to Boyle, the idea is this: A vehicle determines when preventative maintenance is needed (as vehicles already do to some extent), then uses its mobile web connection to order needed parts and schedule the work at a shop. This saves the consumer time in research and appointment-making, she said. In addition, it can ensure that income keeps flowing to ridesharing operators, for which downtime is lost money.

“Parking pain points was another trend that came up,” Boyle said. Indeed, having a vehicle that can find open parking spots, navigate to those spots, then handle the payments is a common use case for anyone in promoting the concept of connected and autonomous vehicles.

The new ecosystem could also result in side jobs for drivers — or, as Boyle put it to Webster, “using your car as a second gig.” The idea is to use the trunk as a product locker — think about those lockers into which items ordered online are delivered — and utilize the technology to enable access and product pickup for consumers as the driver, say, works in an office.

On another note, the hackathon featured high interest in the charging of electric vehicles, and related topics — another possible hot area for the emerging ecosystem.

The key to building that ecosystem? “Focus on something that will work for the consumer,” she said.

To that end, Boyle said OEMs are adapting their thinking to these new times, as well as reaching out and working with expert players from the payments and commerce worlds. “The car can become an epicenter for commerce,” she explained, and that means new sources of revenue for the likes of GM and its competitors.

The possibilities do, in fact, seem endless at least, at this point. That’s partly because the arrival of truly autonomous vehicles means fewer design constraints. Imagine this: a touchscreen that takes up part of the windshield, or four seats inside the vehicle that can turn to face each other with a table at the center. There are various payments and commerce opportunities that could follow.

First, though, comes the construction of this new automotive ecosystem, and more joint efforts like the one seen at the LA Auto Show. “There are endless possibilities” when it comes to making payments and commerce a major part of the emerging ecosystem, Boyle said, “but we have to start thinking about them now.”



Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out the latest PYMNTS report on Mobile Order-Ahead

IoT Needs An Injection Of Trust — As Much As It Can Get, In Fact –

It’s being built with every new car and truck on the road, every smart speaker sold this holiday season, every time a new TV is connected to the web, every time a cutting-edge thermostat or refrigerator is installed, and every time a person gives a command to Amazon’s Alexa or another form of voice-assisted technology.

The Internet of Things (IoT), though still young and under construction, seems as inevitable as the high tide 12 hours hence. That may be true — it’s hard to imagine IoT, no matter the forms it will take, being derailed by anything outside the act-of-God category, something that might signal a civilizational collapse.

However, that doesn’t mean the emerging Internet of Things is as safe and secure as it can be — or should be. That’s why PYMNTS recently spoke with Isabelle Noblanc, vice president and general manager of identity management and security for UL, which provides security and trust services.

Without proper security around data, payments and personal ID, she said, the Internet of Things could fail to win the trust of many consumers (or might gain it much more slowly), which could impact IoT’s growth and capabilities, as well as the payments and commerce players that are part of the network. This means, on the development side, the companies that make the devices that will connect to the IoT “need to understand how those devices work in the ecosystem, and take security into account at a very early stage,” she said during her recent PYMNTS interview.

IoT Growth And Concerns

Noblanc’s message comes at an opportune time.

First, the global IoT market is projected to soar to $475 billion in 2020, up from $249 billion in 2018, according to Statista, attaining a compound annual growth rate (CAGR) of 22.4 percent in three years. One can see evidence of that growth in the popularity and ongoing development of smart speakers, along with the rise of connected cars and new investments in supply chain and inventory.

The concerns voiced by Noblanc are also reflected in the wider business world. For instance, a recent study pointed to IoT worries among smaller firms, along with anticipation about IoT benefits. The Nationwide fourth annual Business Owner Survey, released in late September, which surveyed 1,000 small and mid-sized business (SMB) owners about their views on cybersecurity, found that an overwhelming majority 91 percent use connected technology.

Tim Nunziata, director and division head of commercial E&O and cyber at Nationwide, told PYMNTS about ongoing fears among SMBs about cyberattacks that could “wipe out a small company,” a concern that seems likely to increase as IoT spreads. The company’s survey also found that 65 percent of SMBs do not have a dedicated employee or vendor in place to monitor cyberattacks.

His comments came against a backdrop where other observers have warned of IoT vulnerability. In October, data from a Princeton University study showed that hackers were able to take control of washing machines, air conditioners and other connected devices, and manipulate power demand across the grid, causing blackouts.

Common Standards

The antidote to such anxieties and dangers?

For one, companies involved in IoT would do better to work together toward common security standards than to go it alone, Noblanc said, pointing to standards groups involved in authentication and biometrics as examples. She noted that those companies must focus on security early on, instead of reacting to breaches and other problems later.

“I am a huge advocate of privacy and security by design,” she said. When UL speaks with such companies, “we advocate really looking at it as early as possible.”

In short, bake privacy and security into the design, Noblanc recommended, rather than wait for criminals to force one’s hand.

In addition, biometrics is emerging as a strong authentication tool, even as passwords continue to endure, she said. The use of biometrics — even voice recognition — could help set that sought-after balance of providing consumer efficiency and convenience in tandem with secure authentication.

The Consumer’s Role

Of course, it’s not just companies involved in IoT that will play major roles in security so will consumers. “They should understand what data will be used” and by whom, Noblanc said, then make choices about how they will connect to and use the Internet of Things accordingly. To make those choices, though, the operations involved with building the IoT need to educate consumers and make them aware of the data — how it’s collected and used, and how it is secured.

It all comes down to trust, Noblanc stated. She compared the building of IoT, and its acceptance, to the situation a century or more ago when the electric grid was spreading throughout the country. “People had to trust that electricity was safe,” she said.

When it comes to the IoT, people will need to trust that their data is secure.



Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out the latest PYMNTS report on Mobile Order-Ahead

15 Artificial Intelligence Stocks Leading the New Wave –

With major indices all over the map, and individual sectors suffering varying degrees of misery, this holiday season failed to deliver much joy to investors. That said, every bear market provides shrewd speculators with a steep discount on quality names. Among them, those armed with a long-term strategy should zero-in on artificial intelligence (AI) stocks.

Integrated AI represents the ultimate paradigm shift for society and the global economy. Prior technological innovations have introduced various iterations of assisted applications. For instance, we have computers that allow us to perform our work faster, or vehicles that greatly expand our range. But for the most part, they require human input.

In the last few years, we’ve witnessed massive leaps in deep learning, or the capacity for computers to engage in dynamic decision-making protocols. It’s not just in the theoretical realm, either. Every time we log on to the internet, multiple platforms deep-learn our tendencies, providing us with relevant marketing and query answers.

Now imagine that tech developers combine mechanical advancements with deep-learning intelligence. The possibilities are seemingly limited only to our imagination. While we’re a bit away from that integration, every year we push closer to that reality.

That alone makes AI stocks worth serious consideration. But with the recent market volatility, high-potential tech firms are on markdown. Here are 15 companies that will lead the next wave in artificial intelligence applications:

Transit Operations Section Managers | –


OPENING DATE/TIME: 11/19/18 12:00 AM (GMT -8:00)

CLOSING DATE/TIME: 12/04/18 11:59 PM (GMT -8:00)

SALARY: $115,717.06 – $146,678.48 Annually

LOCATION: Various Locations throughout King County, Washington

JOB TYPE: Career Service, Full Time, 40 hrs/week

DIVISION: Department of Transportation – Transit Division

JOB NUMBER: 2018DS08957


This is a once-in-a-lifetime opportunity to join one of the nation’s top transit agencies at a time when it is growing, adopting innovative services and technologies, and building a new organizational structure designed to attain clear strategic goals. In 2018, Metro Transit was named Outstanding Public Transportation System among the nation’s largest transit agencies. This award recognizes achievements like record-breaking growth, 93 percent customer satisfaction, adoption of green technologies, and leadership in modeling new mobility services. Now Metro is moving to a higher organizational level–a department within King County government–and we are in the exciting process of building our operation sections’ leadership teams. We are hiring 10 Section Managers who will be responsible for overseeing sections in the Bus Operations, Rail Operations, Transit Facilities, and Vehicle Maintenance Divisions. These senior leaders will report directly to Division Directors. They will serve King County communities by providing transformational leadership to 90 percent of the Metro workforce. These dynamic leaders will work in partnership with employees, colleagues and stakeholders to ensure that Metro provides world-class service while advancing the following:

  • Health and safety of our workforce
  • Strength and sustainability of our environment
  • Forward-looking development of our employees
  • Equity and social justice in our workplace

They will do this through building effective and innovative teams, helping develop a vibrant Metro community of committed professionals, leading people, and ensuring that Metro is a fabulous place to work for everyone. These 10 leaders will be responsible for leadership roles in the following operational areas:

  • Bus Operations Division. Metro is primarily a bus operator, serving more than 400,000 riders every weekday across King County–a 2,100 square-mile service area that is home to 2.2 million residents and 39 cities. The Bus Operations Division will have two Section Managers. One will oversee Base Management, with responsibility for operation of Metro’s seven bases, and the other will oversee Service Management, with responsibility for top-quality service and training.
  • Rail Division. Metro operates both Sound Transit’s Link light-rail system and the City of Seattle’s streetcar service, focusing on providing the highest quality service and being the best partner possible. Several major Link extensions are slated for completion in the next five years, and Seattle is currently evaluating expansion of its streetcar system. To support the growing rail service, our Rail Division will have four managers, each overseeing one of these sections: Rail Operations, Rail Maintenance, Rail Facilities, and Streetcar.
  • Transit Facilities Division. Transit Facilities maintains Metro’s fixed assets. These include buildings; transit facilities such as park-and-rides, bus stops, radio and electric systems, trolley overhead infrastructure, and King County Water Taxi facilities; and buildings for other Metro divisions. The Transit Facilities Division will have two section managers. One will oversee Facilities Service Management, including finance and the work center, and the other will oversee Facilities Maintenance Management, including the trolley system, maintenance, and field services.
  • Vehicle Maintenance Division. Vehicle Maintenance keeps our buses well maintained and assists in providing safe, dependable, and clean vehicles for our customers. The division works in a timely, cost effective, and environmentally sensitive manner and values teamwork, communication, diversity, and social justice. The Vehicle Maintenance Division will have two section managers. One will oversee Maintenance Operations at Metro’s seven bases, and the other will oversee Fleet Services.

About King County and Metro

Renowned for its natural beauty and vibrant communities, the Central Puget Sound region is growing faster than any place in the United States–and demand for transit is at an all-time high. Metro Transit is the largest public transportation agency in the region, and will play an increasingly important role in reducing congestion, protecting our environment, building strong communities, and getting more people where they need to go.

Metro serves all of King County, the 13th most populous county in the nation and, at 2,100 square miles, one of the largest. We are proud to be valued locally and respected nationwide for our innovative transit services, pioneering green practices, and visionary approach to meeting the transportation needs of our growing population. Metro’s many services, choices, and customer support options connect people with communities and with opportunities to thrive, helping make life better for everyone in our region.

As the only county in the United States named after Dr. Martin Luther King, Jr., Metro proudly seeks to live up to his principles and values of equity and social justice for all. King County is home to many diverse communities, and at Metro we cherish all that is unique about them. We seek to ensure that our services are culturally responsive to all communities within our service area.

Metro is striving to build an enduring legacy of diversity and inclusion, equity and social justice, employee engagement, innovation, continuous improvement, safety, and environmental sustainability. King County government and Metro Transit have adopted a pro-equity agenda to advance this legacy. We are actively developing the systems and standards necessary to achieve better outcomes for all of our residents and our employees. We are changing the way government delivers service–for example by developing groundbreaking services such as our ORCA LIFT low-income fare and actively engaging the people we serve in our planning processes. Through innovations like these Metro has won national recognition as a model of excellence.

All of these qualities make King County one of the nation’s best places to live, work, and play.

At King County Metro Transit we believe:

Our diverse culture encompasses the unique perspectives, knowledge, skills and abilities, and the rich dimensions of identity each member of the Metro community brings to work every day. These perspectives and human dimensions are built through life experiences and membership in socially defined groups (including, race, ethnicity, gender, sexual orientation, gender identity, socio-economic status, age, physical abilities, religious beliefs, etc).

The diverse experiences and perspectives of our employees help us serve King County residents in an equitable, and culturally responsive way.

Who May Apply

This position is open to all qualified applicants.

Forms and Materials Required

An online employment application is required; résumé and cover letter are optional. For more information regarding this recruitment, please contact Deandra Stanley, Recruiter, 206-263-1421 or

Selection Process

Applications will be screened for qualifications throughout the posting period. Applicants who pass the initial screening will be invited to a series of interviews:

  • First-round interviews will occur the week of December 10, 2018
  • Final-round interviews will occur the week of December 17, 2018

Skype options are available for out-of-state candidates for the first-round interview only. Final interviews must be in person.


All Section Managers will generally have the following similar responsibilities; unique responsibilities will be listed on the Transit Section Manager recruitment site:

Applying equity and social justice principles is a daily responsibility and a foundational expectation for all King County employees. All Section Managers are expected to model and apply equity and social justice shared values, behaviors and practices across all of the job duties listed below:

  • Establish, develop and manage sections of Transit Operations that deliver high-quality, timely service to customers.
  • Build teams, supervise, and mentor staff across Transit Operations divisions.
  • Ensure that employee and public safety continues to be Metro’s highest priority, maintaining strict adherence to safety rules and procedures and continually seeking to enhance safety practices.
  • Partner with unions and other internal and external stakeholders to deliver excellent service and build a community-oriented, diverse, and inclusive work environment.
  • Plan and implement strategic goals and policies; ensure compliance with applicable laws, regulations, and policies; analyze and interpret operating policies, procedures, and guidelines; and approve recommendations for improvement.
  • Lead and manage the development of new initiatives, efficiencies, and operational methods; determine and select technology and equipment; and direct program and procedure development, implementation, monitoring, and reporting.
  • Lead, help develop, and motivate employees, helping them to recognize the important role they each play in achieving the overall agency goals and empowering them to perform accordingly.
  • Develop, approve, and monitor budget; determine and allocate resources.


We are looking for candidates who meet the following qualifications:

  • Have three years of increasingly responsible management experience in transit operations, public administration, human resources, or other applicable fields that provide the knowledge, skills, and abilities to perform the key roles and responsibilities of the positions.
  • Are skilled people leaders who:
    • Have demonstrated experience building effective teams in diverse work environments while creating strong morale, instilling vision and purpose, and fostering open dialogue.
    • Are interested in and inspired to develop and lead direct reports, furthering people’s career goals, providing challenging and stretching tasks and assignments, and effectively developing all levels of staff.
    • Know how to build relationships and treat all employees and customers equitably, with respect and dignity, as well as solve problems for the good of all.
    • Have experience working with labor and ability to develop and nurture strong, productive relationships with union leadership, respecting established processes and fostering an environment of mutual respect.
    • Are excellent communicators, in both oral and written communications.
  • Are strategic industry leaders who:
    • Are knowledgeable about how organizations work and how to get things done both through formal channels and informal networks.
    • Are able to make complex decisions and to deal with concepts and complexity comfortably, in a capable and agile manner.
    • Are able to see clearly ahead, anticipate future consequences, effectively set priorities, and have broad knowledge, perspective and the ability to articulate possibilities and spend time on what is important.
    • Are skilled in process management and can quickly see the steps to accomplishing a task.
  • Have high integrity and a commitment to continuous improvement and:
    • Exhibit composure and practice attentive and active listening.
    • Have a good sense of self, knowing personal strengths, weaknesses and biases and the impacts of these on others, particularly those you lead; possessing a commitment to continuously advancing this self-awareness.
    • Demonstrate transparency and build trust, courageously and consistently acting upon a strong set of core values that are aligned with King County Metro Transit’s values.
    • Have the ability as a leader to facilitate difficult conversations, particularly related to race (and other protected classes), power, and privilege.
    • Have the leadership courage and ability to identify and take steps necessary to ensure that all have equitable opportunities to thrive.

Note: Candidates are encouraged to translate life experiences to show how they meet required experience, knowledge, education and skills. For more information about the section manager roles, the divisions, and the ideal candidate profiles, please visit Metro’s job openings site:

Apply online: at

King County is committed to equity and diversity in the workplace. In addition, the county is committed to recruiting and maintaining a quality workforce that shares our guiding principles: collaborative, service-oriented, results-focused, accountable, innovative, professional and fair and just.