Tech Brew Ride Home - Fri. 7/19 - This Pentagon Contract Is Not the One You’re Looking For

Episode Date: July 19, 2019

Microsoft makes boring pay dividends, Trump says he’ll use JEDI mind tricks to examine a Pentagon bid, Orlando ends a controversial facial-recognition test with Amazon, and your weekend long read suggestions. Sponsors Castro Fireside Links: Microsoft beats on earnings, stock ticks up (CNBC) Trump says he’s looking into a Pentagon cloud contract for Amazon or Microsoft because ‘we’re getting tremendous complaints’ (CNBC) Republican lawmakers urge Trump not to delay the $10 billion Pentagon cloud contract Amazon and Microsoft want (CNBC) Orlando cancels Amazon Rekognition program, capping 15 months of glitches and controversy (Orlando Weekly) Weekend Longreads Suggestions: 50 Days to the Moon (Fast Company) Is It Okay to Laugh at Florida Man? (Washington Post) TikTok Stars Are Preparing to Take Over the Internet (The Atlantic) Grindr Wanted To Make The World Better For Queer People. Then A Chinese Gaming Company Bought It. (Buzzfeed) Andy Ngo Has The Newest New Media Career. It’s Made Him A Victim And A Star (Buzzfeed) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the tech meme ride home for Friday, July 19th, 2019. Today, Microsoft makes boring pay dividends. Trump says he'll use Jedi mine tricks to examine a Pentagon bid.

Orlando ends a controversial facial recognition test with Amazon and your weekend long read suggestions. I'm Glenn Fleischman in for Brian McCullough, who is on vacation. And here's what you missed in the world of tech today. Well, in that tech world, boring can be good. Microsoft proved that with its latest quarter's earnings. The company exceeded revenue and earnings expectations while avoiding any major gaps, privacy leaks, password disclosures, political snafus, technological failures, and the like.

The company grossed nearly $34 billion and made over $13 billion in net income or $1.37 a share, a 12% year-over-year revenue increase, and its ninth quarter in a row of year-over-year improvements of 10% or higher. The company is solidly past a trillion dollars in market capitalization now, and its shares continue a nearly uninterrupted rise since 2013 with a few minor corrections along the way. It's up over 500% in that period, rising 34% this year alone. Once a provocative, aggressive, alleged monopolist that caused and faced rancor across the industry, under the leadership of CEO Sacha Nadella, it appears to have mastered the knack of being largely

dull and minting money. Microsoft was ridiculed and rightly so for misjudging the impact of the iPhone, its ill-fated purchase of Nokia's smartphone division, and how it competed with the late entering but fairly decent Windows phone. However, having exited that business, which it's likely they would never have caught up in, they get to be the ecumenical third party that provides Office 365 across every smartphone and desktop platform while focusing on ostensibly the less interesting business of business.

With the exception of criticism around its participation, in military contracts, Microsoft seems to have avoided issues faced by Amazon, Alphabet slash Google, Apple, and Facebook that includes scrutiny and anger from Trump, Congress, and regulators and governments outside the U.S. Not having a social network, not tracking users intensively across the web, and not selling phones with strong encryption may be part of that. Its Azure cloud service used for virtualized on-demand computing has been on fire for years, and chalking up revenue increases around 100% year over year. However, as it's grown, those increases have slowed down.

In the last four quarters, they dropped from 89% to 73%. In the last quarter, it was just 64%, a huge increase given the scale it's reached, but a sign of maturity. Azure is part of what Microsoft calls its intelligent cloud business segment, which includes server software, development tools, and GitHub, the source code hosting service it acquired. That sector is responsible for about a third of revenue, and it accounts for most of Microsoft's growth. Microsoft's other two segments cover personal computing and business, and each earned about a third of revenue as well.

Revenue from its surface tablets and laptops had a modest bump growing 14%. The one dim bulb in this marquee is the Xbox Gaming Division. Hardware sales for Xbox units dropped 48% year over year, not surprising, given that its flagship console is rather long in the tooth, last updated in 2013. Microsoft revealed in June that its next revision isn't due until the holiday shopping season in 2020. Gaming revenue is mostly made through software and online subscriptions, however, and that was down just 3% year over year in the latest quarter, while Xbox Live subscriptions grew from 57 million to 65 million.

Now, speaking of Microsoft and the military, President Trump said yesterday that he's not happy with Amazon and Microsoft being finalists for a Pentagon Cloud Computing contract worth up to $10 billion. Trump said we're getting tremendous complaints from other companies. Some of the greatest companies in the world are complaining about it. Who would those companies be? Well, he listed off Oracle and IBM, eliminated in a previous round, and Microsoft still in contention.

The omission of Amazon isn't a surprise. He has a long-running, one-sided feud with Amazon CEO Jeff Bezos, who personally owns the Washington Post over what Trump characterizes as hostile coverage of his administration and numerous press awards characterized as superb and accurate reporting. Trump has made many unsubstantiated claims about Amazon over the years, including that it rips off the U.S. Post Office, even though analysts believe that the deal has been a significant help to the U.S.PS bottom line.

The Pentagon contract with the ludicrous name Jedi for Joint Enterprise Defense Infrastructure was supposed to have been awarded in September 2018, but it continues to be delayed due to objections. The contract wasn't bid but held as a competition, some Republican lawmakers say the terms were written to favor Amazon's capabilities. However, other Republican congresspeople today urged Trump to not get involved. Four members of the House Armed Services Committee sent a letter to the White House stating, We believe it is essential for our national security to move forward as quickly as possible with the award

and implementation of this contract. The contract may be awarded as soon as next month. Oracle lost a lawsuit last week in which it contested the process and having the contract awarded to a single company. IBM released a statement after Trump's remarks that it had concerns all along and thinks the solution with multiple firms would be better. Given that neither Oracle nor IBM

were judged to meet all the needs of the contract, that does sound an awful lot like sour grapes. Before House Republicans noted this in their letter, while it is understandable that some of the companies competing for the contract are disappointed and not being selected as one of the finalists, further unnecessary delays will only damage our security and increase the costs of the contract.

Trump has made similar statements in the past and even demanded investigations or at least examinations of deals. So far, none of his public statements have resulted in any substantive changes. This program has provoked controversy as well at tech companies that bid on it. Google dropped its bid last October after employees complained. Similar employee backlash occurred at Microsoft, but apparently to no avail. And speaking of employee backlash at uses of technology and also Amazon, Orlando, Florida, has canceled its pilot test of Amazon's recognition facial identification tool,

the Orlando Weekly reported. Amazon had provided services for free for 15 months in two phases as it attempted to get the system working. Recognition, with a K instead of a C, is a sort of platform for facial recognition, tracking objects over time and identifying and parsing text and images and videos. While it has civilian and benign uses, like C-SPAN using it to tag people in its video and photo archives, Amazon landed in Civil Liberties hot water by suggesting its use by police and federal agencies to identify people through mass surveillance and by partnering with them.

Amazon worked with Orlando to test out the practicality of identifying specific people in live streams from several cameras, including around the police department's headquarters, but also in the city's downtown and outside a community recreation center. However, the pilot seemed designed to fail. The city's existing surveillance cameras were positioned high up, which let them large capture the tops of people's heads, the cameras were also too low a resolution, and an issue that the city called bandwidth prevented them from analyzing multiple streams at once, and sometimes even a single stream couldn't be processed. Amazon offered to install its own cameras and the city

declined. In the test phase, a few police officers had volunteered their images for tracking purposes. The Orlando weekly quotes the city's tech chief as noting, we've never gotten to the point to test images. The city's chief administrative office told the city council that it ended the pilot because it couldn't dedicate the resources necessary to move it forward. And it said there are, quote, no immediate plans regarding future pilots to explore this type of facial recognition technology.

One expects the technological issues will be solved one day, but the structural ones remain. An ACLU attorney told the Orlando Weekly that the Orlando Police Department had finally figured out what we long warned, Amazon surveillance technology doesn't work and is a threat to our privacy and civil liberties. Some Amazon employees and some shareholders have tried to put pressure on the company to not offer recognition to police departments, ICE, and for similar purposes, but the company has rebuffed them.

Amazon focuses on discussing positive-sounding uses in law enforcement, such as identifying victims of human trafficking and missing children. And now time for the weekend long read suggestions. Let me start with fast companies 50 days to the Moon series, which has run as a kind of countdown to July 20th, tomorrow, the 50th anniversary of the first moon landing. The articles are by Charles Fishman adapted from his book, One Giant Leap, The Impossible Mission.

Fishman has a huge array of tales to tell, including how NASA almost forgot to take a flag with it to the moon, and how a brawmaker won the contract to make space suits. Yes, Playtex is part of how we got to the moon. Cross my heart. In a story that will remind you of the entire history of the patriarchy, but leave you cheering, Playtex won the contract as a subcontractor to Hamilton Standard, then was fired by them, as Hamilton Standard wanted to make the suits itself. Instead, NASA had a face-off competition to which Playtex was invited.

Company officials flew to Houston and essentially begged to be included, Fishman writes. Playtex only had a few weeks to develop its own suit, and it blew away the competition. Fishman notes, quote, that same division of Playtex, now the independent company ILC Dover still makes every NASA space suit from its headquarters at one moonwalker road. Charles Fishman joins Brian McCullough on tech meme ride home tomorrow to discuss his book. Brian says he learned amazing things about the moon landing during his conversation. Now, a story I found very personally moving was about Florida man. Yeah, that's right, Florida man. Florida man is often found drunk on a lawnmower holding an alligator while pulling

up to a Burger King drive-through and then passing out, later claiming. his dog was at the wheel. While I've traded Florida man stories with Great Alan in the past, I had noticed a trend for them to get darker, even as people continue to chuckle about them. At the Washington Post magazine, Logan Hill asks, is it okay to laugh at Florida man? He traces the origins of the meme to 2013. He would have thought it goes back way further. He notes, quote, at its most salacious, it's a social media update on the true crime TV of America's dumbest criminals and the gallows humor of tabloid headlines at its most insensitive Florida man profits by punching down at the homeless, drug-addicted, or mentally ill.

He tracks the evolution of the meme from amusing things that happen to people clueless and usually drunk to stories that are often cruel, ridiculing people for the wrong reason. We all remember the story about the woman who sued McDonald's for $3 million in one because she spilled hot coffee on herself. Few know that she suffered third-degree burns, required skin grafts, that McDonald's told its franchises to keep coffee at 180 to 190 degrees, near boiling, and that the award was vastly reduced by the judge. Florida man and Florida woman feels a bit like that.

The first gloss on the story is funny, but the more you read, the worse and worse it gets, and the worse you feel. That process happened to the man behind the popular Florida man account on Twitter. He launched it in 2013, and by 2016 felt it had gotten grim. Quote, 90% of the stories people were sending me were mean-spirited, he said. He paused the account in 2017, and then resumed it, but mix in stories about social justice petitions and police abuse and reform. People mostly ignored those.

He shut the account down in March of this year. Now, Hill's account isn't all glum. It does include some people who are just outrageous and enjoy the publicity, and it also includes some for whom the coverage was a wake-up call and have tried to turn their lives around. Taylor Lawrence explains the fast-changing world of youth on the Internet to us oldsters via the Atlantic. While there are other reporters covering online youth culture, I don't know any who hit stories out of the ballpark again and again and so frequently.

Her latest takes place at VidCon and it's about TikTok. Never heard of Vidcom or TikTok? Well, join me in being old. I mean, even older than 20 or maybe 25. Vaughn used to be the right venue for short viral videos. But then after it was shut down, there was a kind of gap that no other company filled. TikTok started in China, roared into the U.S. market last August. You can post ridiculous 15-second videos on the service.

They can be fairly hilarious. Lawrence writes about TikTok stars coming to VidCon, the decade-old gathering celebrating independent video content, once focused on YouTube. Lawrence writes, quote, every year, thousands of influencers, agents, managers, industry executives, and screaming teenage fans to send on the Anaheim Convention Center in search of the next big internet star.

But this year, the focus shifted to TikTok, which spent a staggering billion dollars on advertising in 2018 alone. One TikTok star received a million. for a single 15-second video. It rivals or exceeds in users, Instagram, and is approaching the level of YouTube and Facebook for people who routinely use the service. Lauren describes the constant Beatlemania

like seen at VidCon as teenagers recognize their favorite star and how brands are getting involved and where TikTok is going. Yes, Beatlemania. I'm old. Have I mentioned that? Now to quick final hits. BuzzFeed explains what the heck happened to Grindr, the gay dating and hookup site that was purchased by a Chinese company

who doesn't appear to understand what the service is at all. Ryan Mack describes the chaos that emerged last November after the company's in-house magazine, an independent editorial operation, published a story about the company's president posting on Facebook that marriage should be between a man and a woman. Quote, within two months, Intu's entire editorial staff was laid off,

and by spring, Grindr had Shelf plans for an initial public offering, which have been hamstrung by mismanagement and government scrutiny of its Chinese owner. It's a complicated story because it also involves government oversight of companies abroad owning U.S. firms, as well as the hookup culture and what the future of the site really is, where it's going to grow and what it's going to do. Also at BuzzFeed, Joe Bernstein digs into the line between journalism, advocacy, trolling, and con games in his deep look at Andy No, an anti-antifa videographer injured at a recent rally

where Bernstein was an eyewitness while trailing him for this article. You know has become a darling of right-wing media and the president. Bernstein offers a nuanced look. He writes, quote, there is a corporate media system, Twitter, Fox News, the Wall Street Journal, that wants Andy know that needs Andy know, and it prefers him with a black eye because it's better content. Look out at Twitter, at YouTube, at cable news,

behold a whole precarious world of media hopefuls, swarming every bitter inch of the culture war, filming angry Americans, filming each other, filming themselves, grimly determined to find or frame a few seconds of a reality to sell. And that's the news. Tune in this weekend for Saturday and Sunday extra episodes, including that previously mentioned podcast with Charles Fishman

about his book about the moon landing. I've been your host, Glenn Fleischman, in for Brian McCullough. I'll be back on Wednesday. Thanks for being our guest. If you're interested in printing and typographic history, you might like my latest project, the Tiny Tight Museum and Time Capsule,

which you can find at Tiny Tightenuseum. You can find me in Twitter at Glenn F. Thanks to the editors at TechMeme who tweet out every headline they post every hour of day at TechMeme. It's a great way to keep up to date. Have a great evening.