This Week in Modern Software: Here Come the Facebook Bots

Welcome to This Week in Modern Software, or TWiMS, our weekly analysis of the most interesting and important news, stories, and events in the world of modern software and analytics.

This week, our top story concerns the rise of the bots at Facebook’s F8 developer conference in San Francisco.

TWiMS Top Story:

The 5 Biggest Things Facebook Announced This Week—TIME

What it’s about: Facebook held its annual F8 developer conference this week, and it was all about the bots. OK, it was about more than that. But chatbots—and the Messenger Platform they’ll run on—were the stars of the show. Facebook launched the Messenger Platform (in beta) along with new developers tools—including the Messenger Send/Receive API—for building bots that can interact with and respond to people within Messenger. And, yes, there was plenty more: Facebook also unveiled a new 360-degree camera, Facebook Surround 360. It’s not a new product, per se; rather, Facebook will release open source hardware design and software code for similar camera setups this summer. The company is, as TIME’s Victor Luckerson writes, "hoping the open-source nature of the project will encourage others to build their own rigs." Facebook also teased its future ambitions for VR and Oculus Rift as more than a gaming platform, and Zuckerberg even got in a dig at Donald Trump during his keynote.

Why you should care: Indeed, it was a busy event. But when all was said and done, nothing outshined the bots. Like other tech giants, it’s apparent that Facebook clearly believes that messaging platforms, driven largely by intelligent (or at least semi-intelligent) automated software bots, are the next big thing online. Microsoft CEO Satya Nadella similarly talked up the importance of bots at Build and at a subsequent conference. If websites gave way to mobile apps, the latter will soon hand over the reins to bot-driven messaging—at least that’s how Facebook VP of Messaging David Marcus sees it in this piece by WIRED’s Jessi Hempel. "What’s more," Hempel writes, "messaging platforms are becoming mini-webs—all-in-one spots for us to do way more than talk to our friends." Indeed, while bots are in their relative infancy, messaging apps are already surging. Once an afterthought, Messenger now boasts 900 million monthly active users. Meanwhile, WhatsApp hit 1 billion monthly users earlier this year. And, all of those people will increasingly be interacting with the chatbots you build. Get cracking.

Further reading:

• Everything Facebook Announced at F8 2016—The Next Web
• How to Build Bots for Messenger—Facebook for Developers
• Introducing Facebook Surround 360: An Open, High-Quality 3D-360 Video Capture System—Engineering at Facebook
• Here’s How Facebook Will Finally Convince You to Use Messenger—Yahoo Finance
• How Will Zuckerberg Rule the World? By Giving Facebook’s Tech Away—WIRED
• Facebook Messenger Makes Sharing Dropbox Files Easier—Engadget
• This Is Facebook’s Gorgeous, Open-Source 360-Degree Video Camera—The Verge
• Facebook Believes Messenger Will Anchor a Post-App Internet—WIRED
• Messenger and WhatsApp Process 60 Billion Messages a Day, Three Times More Than SMS—The Verge 

Cloud Spending Infrastructure to Surge, Says IDC—ZDNet

What it’s about: Research firm IDC projects that IT infrastructure spending for cloud environments will jump 18.9% in 2016, hitting $38.2 billion, while infrastructure spending for traditional, non-cloud environments will decline 4%, though it still accounts for majority share (63.8%) of IT budgets. (IDC defines "infrastructure" as server, storage, and Ethernet switches.) This isn’t some seasonal or short-term spike in cloud-related infrastructure investments. IDC’s newest Worldwide Quarterly IT Cloud Tracker predicts cloud spending to grow an average of 12.5% annually during the next five years. That means cloud infrastructure spending will hit $57.8 billion. Switches will account for the largest spending increase at 26.8%, followed by servers (12.4%) and storage (11.3%).

Why you should care: It’s yet another sign of cloud computing’s steady and substantial growth. InformationWeek’s Charles Babcock notes that while IDC’s spending projections don’t map perfectly to IT budgets, it’s still possible to do some rough math: "The 'nearly half' share of the equipment spend may correspond roughly to how enterprise IT budgets break down between now and 2020: moving from roughly two-thirds traditional and legacy on-premises spend to one-half the budget, as more workloads migrate into the cloud," he writes. And while the cloud is growing across the board, spending on public cloud environments will grow the fastest, at 13.8% annually, reaching $37.5 billion in infrastructure spending in 2020. Spending on private cloud infrastructure will reach $20.3 billion in 2020, growing 10.2% annually. "For the majority of corporate and public organizations, IT is not a core business but rather an enabler for their core businesses and operations," Natalya Yezhkova, IDC Research Director, Storage Systems, said in a statement. "Expansion of cloud offerings creates new opportunities for these businesses to focus efforts on core competencies while leveraging the flexibility of service-based IT."

Further reading:

• Public Cloud Beats Out Private, IDC Finds—InformationWeek
• Billing by Millionths of Pennies, Cloud Computing’s Giants Take in Billions—The New York Times
• Cloud Environments Will Drive IT Infrastructure Spending Growth Across All Regional Markets in 2016, According to IDC—IDC

PC Shipments Hit 9-Year Low in Q1, Says Gartner—Barron’s

What it’s about: As the cloud grows, the PC shrinks. Sure, the PC’s death has been greatly exaggerated in the past, but new research from Gartner and IDC reaffirms an ongoing trend: We’re simply not as PC-dependent as we used to be. Gartner announced this week that worldwide PC shipments dropped 9.6% during the first quarter of 2016, to 64.8 million total units, compared with the same period in 2015. That marks the first time since 2007 that quarterly PC shipments have dipped below 65 million units, according to Gartner. Meanwhile, IDC’s latest data indicates an even steeper decline, 11.5%, from Q1 2015 to Q1 2016, in line with its previous projections for weak sales at the beginning of this year. IDC does expect enterprise and education buying to pick up in Q2, and notes that Windows 10 upgrades are still only in the pilot phase in most enterprises. Gartner expects Windows 10-related hardware refreshes to begin toward the end of 2016.

Why you should care: Again, it’s not that consumers or businesses have abandoned the PC. It’s just that we now have more options, so there’s less need to upgrade PCs as often. We’ve got smartphones and tablets and smart TVs and wearables—and with so many applications delivered via the cloud (see Intuit story below), we’re not nearly as dependent on locally installed software. Put it all together and PCs are no longer the focal point. Of course, being new and shiny is no guarantee of skyrocketing sales, either: 9to5Mac reports that a KGI investment note forecasts Apple Watch sales will collapse by 25% in 2016, from 10.6 million shipments in 2015 to just 7.5 million units this year. What’s worse (for Apple, at least), is that the Apple Watch wasn’t released until late April of 2015. That means the quarterly sales declines could be even more precipitous.

Further reading:

• Gartner Inc.: Gartner Says Worldwide PC Shipments Declined 9.6 Percent in First Quarter of 2016—TWST.com
• PC Shipment Decline Continued in First Quarter as Expected, with Hopes for Improvement Depending on Commercial Replacements & Economic Stability, According to IDC—IDC
• Gartner: Global PC Shipments Fell 9.6% in Q1 2016, the First Quarter Below 65 Million Units Since 2007—VentureBeat
• KGI Forecasts Apple Watch Shipments Will Fall 25% Year-on-Year, Be Below 7.5M Units vs. 10.6M in 2015—9to5Mac

Intuit Sheds Its PC Roots and Rises as a Cloud Software Company—The New York Times

What it’s about: Just in time for Tax Day (April 18), The New York Times chronicles Intuit’s three-decade journey from its maiden Quicken product in the early days of the PC era to its ongoing transformation as a cloud-first software provider best known for TurboTax (its consumer tax prep service) and QuickBooks (its small business accounting software). The Times notes that while QuickBooks Online was once an afterthought, it has quickly become a crucial priority for Intuit as the company faces competition from upstart firms like Xero with easy-to-use cloud apps for accounting and related needs. Intuit radically revamped QuickBooks Online to make it easier to use and easier to connect with other apps in the cloud.

Why you should care: It’s hardly news that Intuit has been shifting to the cloud, but the move is more dramatic than many observers realize. In fact, the company sold Quicken, its original PC app, to a private equity firm last month. Just as important, the Times underscores that the transition isn’t just about cloud apps, but about cloud apps that work well with other cloud apps. Intuit’s decision to open up the QuickBooks Online ecosystem—it now supports some 2,000 apps—was driven in part because it found that the average small business owner used somewhere between 16 to 20 apps. Intuit’s cloud focus appears to be paying off: The company reported QuickBooks Online year-over-year subscriber growth of 47% in Q2 of its current fiscal year, and it expects similar growth en route to reaching 2 million subscribers by the end of FY 2017. That would mean QuickBooks Online will roughly double its user base in two years. 

Further reading:

• Intuit, a True Survivor, Relocates to the Cloud—The New York Times

FBI Paid Professional Hackers One-Time Fee to Crack San Bernardino iPhone—The Washington Post

What it’s about: It’s the story that just won’t go away. The Washington Post’s Ellen Nakashima, citing anonymous sources, reported that the FBI did not hire Israeli mobile security firm Cellebrite to help it crack the San Bernardino shooter’s iPhone, as an earlier Bloomberg report indicated. Rather, the government paid hackers a one-time fee to share a previously undiscovered software flaw, then create a device that was able to guess the phone’s four-digit passcode while bypassing a security feature that would have erased its locally stored data after 10 incorrect login attempts.

Why you should care: Hackers are often placed on a murky color spectrum of white hat (so-called ethical hackers who don’t exploit flaws for illegal means) to black hat (anything goes, including criminal activity). The Post’s report says that at least one of the people the FBI hired is considered a gray-hat hacker, who stand on ethically ambiguous ground that befits this entire debate. "Critics say [gray-hat hackers] might be helping governments spy on their own citizens," Nakashima writes. "Their tools, however, might also be used to track terrorists or hack an adversary spying on the United States." If you’re starting to weary of the Apple-FBI conflict, we don’t blame you—but don’t expect it to go away soon. Nakashima notes that the government must now decide whether or not to disclose the security hole to Apple—something gray hats might not typically do. It’s "a decision that probably will be made by a White House-led group," Nakashima writes.

Further reading:

• Report: FBI Paid Some Dodgy Hackers for a Zero-Day to Unlock the iPhone—Gizmodo

How an Internet Mapping Glitch Turned a Random Kansas Farm Into a Digital Hell—Fusion

What it’s about: There’s no place like home—unless your home is on rural farmland in Kansas that has been used for the past 14 years as the default location for any IP address that can’t be pinpointed more specifically than being somewhere in the United States. Then, living in your home—a house that sits on 360 pastoral acres in Potwin, Kansas—is a never-ending digital nightmare. Fusion’s Kashmir Hill checks in with a fascinating (and somewhat terrifying) story of how the property, owned by 82-year-old Joyce Taylor, and its residents became enveloped in an internet twister:

"For the last decade, Taylor and her renters have been visited by all kinds of mysterious trouble. They’ve been accused of being identity thieves, spammers, scammers, and fraudsters. They’ve gotten visited by FBI agents, federal marshals, IRS collectors, ambulances searching for suicidal veterans, and police officers searching for runaway children. They’ve found people scrounging around in their barn. The renters have been doxxed, their names and addresses posted on the internet by vigilantes. Once, someone left a broken toilet in the driveway as a strange, indefinite threat."

Why you should care: After some fine detective work, Hill discovered that Taylor’s property—thanks to some rounding off of the longitudinal and latitudinal coordinates of the exact center of the United States, which sits in Kansas near the Nebraska border—has been the unwitting physical location used by IP mapping firm MaxMind for any IP address in the United States that can’t be identified. So when someone—from angry individuals who’ve been burned in an internet scam to law enforcement agencies tracking down criminal activity online—went looking for the physical location of an IP address that MaxMind couldn’t identify, it effectively gave them Taylor’s address. This happened a lot: There are more than 600 million IP addresses associated with the default. (Hill also notes other residential locations that sit in similar "IP flood zones.") It’s a great read and a timely reminder of the unforeseen implications of a world ruled by software. As Hill writes: "IP addresses, which get used as digital evidence in criminal trials and to secure search warrants, are not always reliable. Like Social Security numbers, they were a numerical system built for one purpose that are now used for something completely different."

Further Reading 

Want to suggest something that we should cover in the next edition of TWiMS? Email us at blog@newrelic.com.

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Chatbot, cloud, and nervous man images courtesy of Shutterstock.com.