All posts by Tim Dwyer

Defining “Cloud Services” and “Cloud Computing”

“Cloud Computing” versus “Cloud Services”

When most people talk about “Cloud Computing”, they usually refer to online delivery and consumption models for business and consumer services.  These services include IT services – like software-as-a-service (SaaS) and storage or server capacity as a service – but also many, many “non-IT” business and consumer services.

The vast majority of these online services are not, in the mind of the user, IT or “computing” at all – they are about shopping, banking, selling, collaborating, communicating, being entertained, etc.  In other words, most people using these services are not “computing”, they are living! These customers are not explicitly buying “Cloud Computing”, but the “Cloud Services” that are enabled by Cloud Computing environments; Cloud Computing is hidden underneath the business or consumer service.  And so, in our definitional framework, we distinguish between:

Cloud Services: Consumer and Business products, services and solutions that are delivered and consumed in real-time over the Internet

Cloud Computing: an emerging IT development, deployment and delivery model, enabling real-time delivery of products, services and solutions over the Internet (i.e., enabling Cloud Services)

Essentially, a Cloud Service is any business or consumer service that is delivered and consumed over the Internet in real-time (that’s the 5 second definition; more important detail below).  Cloud Computing, an important, but much narrower term, is the IT environment – encompassing all elements of the full “stack” of IT and network products (and supporting services) – that enables the development, delivery and consumption of Cloud Services.

Any discussion of Cloud computing must start with a discussion of what the attributes of Cloud services are, and – consequently – what attributes Cloud Computing environments need to enable.

What Are “Cloud Services”? An Eight-Point Checklist

What Are “Cloud Services”? An Eight-Point Checklist
I recently received a reader comment that suggested that Cloud Computing and Cloud Services are just a rehash of the same old stuff:

“One thing 30 years in the IT industry has taught me is that the more things change, the more they stay the same. Another is that the only memory we seem to access is short-term. Yet another is that techno-marketers rely on that, so they can put labels like ‘revolutionary’ and ‘innovative’ on platforms, products and services that are mere re-inventions of the wheel and often poor copies at that. A good example is all the buzz about ‘Cloud Computing’”

This reader and other skeptics cite prior industry models and offerings, like service bureaus, mainframes, virtualization, application service providers (ASPs), et al., as having already delivered much that is promised through the Cloud model.  But these perspectives miss the critical differences that define the new and substantial benefits Cloud Services offer.

Surveying the wide range of Cloud offerings, here are eight attributes that, in our view, define the new generation of commercial Cloud Services, and provide the basis for those benefits:

 

  • Offsite, provided by third-party provider – In the Cloud” execution, which for most practical purposes means offsite (really, location-agnostic).  Specifying “third-party provider” simply highlights that the services we’re focused on in our analysis are commercial Cloud Services.  [CIOs could implement the Cloud model within their own organization, for use by their own employees, something referred to as an “enterprise Cloud”.  And, indeed, we expect many will, as the next step in their transition to a next-generation, “Dynamic IT” services delivery model.  For those who want to include “in-house” Cloud Services delivery in their market view, they can simply eliminate the “third-party provider” attribute.]
  • Accessed via the Internet – standards-based, universal network access.  This does not preclude service providers offering security or quality-of-service value-added options.
  • Minimal/no IT skills to “implement” – online, simplified specification of services requirements; need is eliminated for lengthy implementation services for on-premise systems that support the service (the service provider offloads this).
  • Provisioning – self-service requesting, near real-time deployment, dynamic & fine-grained scaling.
  • Pricing – fine-grained & usage-based pricing capability.  (As a convenience to some customers, providers may mask this pricing granularity with long-term, fixed price agreements.)
  • User Interface – browser & successors.  Browsers will evolve, for a wider variety of devices, and with richer capabilities.  But the basic aspects of a browser ? intuitive/easy-to-use, standards-based, application/service-independent, multi-platform ? remain the attributes of Cloud Services UIs.
  • System Interface – Web services APIs, providing a standards-based framework for accessing and integrating with and among Cloud Services (and web services-based/enabled in-house systems).  In our view, this is a critically important aspect of Cloud Services: that they provide well-defined, programmatic access for users, partners and others who want to leverage the Cloud Service within a broader solution context.
  • Shared resources/common versions – the shared asset approach improves supplier and customer economics; there is some ability to customize “around” the shared services, via configuration options within the service, workflow/process management among services, et al.

These attributes, together, make business and consumer Cloud Services easier and cheaper – and often better – to consume than through traditional delivery modes. These attributes lower costs (for customers and suppliers), speed and simplify access, speed and fine-tune provisioning (in line with true demand/usage), greatly increase the number and variety of available services (thanks to lower development and deployment costs, and standards), and improve the potential to integrate.

What, Then, Is “Cloud Computing”?

Since Cloud Computing is the IT foundation for Cloud Services, it consists of a growing list of technologies and IT offerings that enable Cloud Services, as defined by the attributes listed above.  A partial list includes:

  • Infrastructure systems (e.g., servers, storage, networks) that can economically scale to very high volumes, and preferably do so in a granular fashion.
  • Application software that provides web-based UIs, web services APIs, multi-tenant architecture and a rich variety of configuration options.
  • Application development and deployment software that supports the development, integration or runtime execution of Cloud application software.
  • System and application management software that supports rapid self-service provisioning and configuration, usage monitoring, et al.
  • IP Networks that connect end users to “the Cloud” and the infrastructure components of the Cloud to each other, leveraging network-embedded technologies for quality-of-service, security, and optimized application delivery.

For all of the above, pricing agreements for Cloud Service providers that scale technology costs with their Cloud Services volumes/revenues.

Of course, in addition to supporting the unique IT requirements of Cloud Services, Cloud Computing offerings must also support the perennial “must haves” of enterprise IT environments, including:  manageability, reliability, availability, security and price-competitiveness.  Further, because a growing number of enterprise customers will be running a portfolio of both on premise and Cloud-sourced systems, there will be increasing demand for IT offerings that span both on premise and Cloud-based systems.

Link to original article

Ready-Mix Concrete

Ready-Mix Concrete

Ready-mix concrete is produced at a ready-mix concrete plant, loaded onto a ready-mix concrete truck and delivered to your job-site. The ready-mix concrete trucks do all the work of mixing the concrete so all you have to do is place the concrete.

Concrete in its simplest form is made of cement, sand, water and stone. Mixing these ingredients by hand or with a portable concrete mixer is very labor intense, time consuming, and produces a lower quality concrete when compared to ready-mix concrete.
Ready-mixed concrete is ordered by the cubic yard or cubic meter. Most concrete trucks can haul 10 cubic yards of concrete. Ready-mix concrete is made using a mix design that weighs each ingredient precisely to achieve a very strong, durable concrete mix.

Ordering Ready-Mix Concrete

There are many ready-mix concrete suppliers around the country. All the major cities have multiple ready-mix suppliers that you can call and most towns have a ready-mix supplier within an hour from where you live.

You can find the closest concrete ready-mix supplier to you using Google or your local yellow pages. Once you’ve located your local ready-mix company, give them a call and tell them the size of your project, length, width, and thickness, and the ready-mix batch plant operator will figure how much ready-mix concrete you need to complete your job.
It’s better to give the ready-mix concrete company a few days or even a week notice before you need the concrete. You’ll have a better chance of getting the concrete delivered during the time of day you want it there versus when they can squeeze you in their schedule.

Ready-Mix Concrete Price

Unless your project is really small, using ready-mix concrete is recommended. Ready-mix concrete prices will vary depending on the concrete mix design you order. Here is an example price of ready-mix concrete per cubic yard that may be paid for some popular concrete mix designs. These prices include air-entraining and a water-reducing admixture.

2500 psi 3/4-inch stone concrete mix $90.00 dollars per cubic yard
3000 psi 3/4-inch stone concrete mix $95.00 dollars per cubic yard
3500 psi 3/4-inch stone concrete mix $97.00 dollars per cubic yard
4000 psi 3/4-inch stone concrete mix $99.00 dollars per cubic yard

 

Coping with Ready-Mix Test Anxiety

Coping with Ready-Mix Test Anxiety

Even small producers can benefit from performing basic concrete testing in-house.

The first step is to find someone who knows how to perform the tests. This can be an outside laboratory, but it’s a good idea to have at least one employee on staff who knows the appropriate ASTM International, department of transportation (DOT), and American Association of State Highway Transportation Officials (AASHTO) test procedures. Ideally, this person is certified by the American Concrete Institute or local DOT. Training and certification is typically available from ACI chapters or state ready-mixed associations for around $500 (fee varies depending on location).

Raw Materials Due Diligence

Not all testing must be performed in-house. Most material information can be obtained from your supplier. At a minimum, the supplier should provide the density or specific gravity of sand, stone, cement, fly ash, and admixtures. You’ll use this information to convert batch weights to volume to make certain a true cubic yard or cubic meter of concrete is being produced. (For more information on this procedure, read “Profiting from Quality Concrete”) If the mix design under yields, the concrete will have a higher strength but won’t fill forms as fast as the customer expects. If the mix design over yields, the customer won’t have to order as much concrete, but strength will be lower than expected.

Aggregate suppliers can also provide gradation information, which you’ll need when supplying projects with combined aggregate grading specs, like the big box retailers. You can then compile this information for use on projects that require submittals.

Testing the Concrete

At a bare minimum, your technician should be able to perform a slump test (ASTM C143) and make cylinders (ASTM C31). If you don’t own a compression machine, send cylinders to a lab for compression testing. If you’re making air-entrained concrete, the technician should be able to test for air content (ASTM C231 for normal-weight concrete or ASTM C173 for lightweight concrete). If possible, the technician should also be able to test for concrete unit weight (ASTM C138) because this test is required by ASTM C94, “Specifications for Ready-Mixed Concrete” and because unit weight can act as a double check for air content and added water. The equipment for these tests typically costs less than $1,000.

Why Bother?

Based on my experience, verifying yield and confirming slump, air content, and strength saves the average producer 25 cents to $1.50 per cubic yard. You’ve spent $1,500 on certification and equipment, so full payback should take about a month. Even producers that only provide residential concrete, which is rarely tested, can see savings.

Admittedly, knowing how to perform a test isn’t enough to establish a quality control department. It’s also necessary to know what to test and why it should be tested. However, even the best technical expert can’t do his job without knowing the basics about the materials involved and the concrete performance. For more information on quality control, visit the National Ready Mixed Concrete Association’s Quality Initiatives page.

Link to original article

Advantages and Disadvantages of Ready-Mixed Concrete

Advantages of Ready Mixed Concrete

Qualitative concrete is achieved as a ready-mix concrete mix plant that makes use of sophisticated equipment and uniform methods. There is rigorous control over testing materials, process parameters, and continuous monitoring of crucial practices during the production process. Poor control on the input materials, batching as well as mixing techniques in case of site mix concrete is resolved in a ready-mix concrete process.

Speed in the construction practices in ready mix concrete plant is continuously followed by having mechanized operations. The output derived from site mix concrete plant using an 8/12 mixer is 4 to 5 metric cubes per hour, which are 30-60 metric cubes per hour in a ready mix concrete plant. Better handling and proper mixing practice help reduce consumption of cement by 10 – 12%. The use of admixtures and other cementitious materials will help to reduce the amount of cement.

The concrete mixer is used with high versatility. It is placed by following the best concrete placing methods. Cement is saved, and the dust caused will be reduced as ready mix concrete making usage of mass concrete instead of bags of cement. Cement saving will preserve energy and resources. Fewer consumption results in less production of cement hence less environmental pollution. The more durable structure is obtained thus increasing the service life and saving the life cycle costs.

Ready-mix concrete manufacture has less dependency on human labor; hence, the chances of human errors are reduced. This will also reduce the dependence on intensive labors. Small or large quantities of concrete according to the specification is delivered timely at the site. This will require no space for storing the raw materials at the location. There is no delay owing to site based batching plant erection/ dismantling; no equipment to hire; no depreciation of costs. Petrol and diesel consumed are relatively less; thus, noise and air pollution are lessened.

Disadvantages of Ready Mixed Concrete

The transit time from the preparation of concrete to the delivery site is likely to result in loss of operational factors. This will demand additional water or admixtures to maintain the workability as per the specification. At the site, the QA/QC engineer is supposed to check the workability through a slump test before deploying it for construction.

Traffic while the transit of concrete can result in the setting of concrete. This will hence require the addition of admixtures to delay the setting period. But unexpected traffic is a significant problem. The formwork and placing arrangement should be prepared in advance in a large area as the concrete can be bought in more substantial amounts.

Nine Sources of Cracking in Concrete

Nine Sources of Cracking in Concrete

Concrete is regularly used for its tried-and-true endurance, so when concrete begins to crack it is a serious issue. Cracking in concrete is usually brought on by one of the following sources.

Using Low-Grade Materials

cracking concrete

A major source of cracking is using low-grade materials which includes both concrete and steel in reinforced concrete structures.

Shrinkage

concrete shrinkage

If not controlled during the mix design and curing stage, shrinkage can cause cracking. Shrinkage can become critical in high strength concrete because of a low water/cement ratio as well as the use of Mineral Admixtures.

Quality and Type of Aggregate

shrinkage

The quality of aggregate used in concrete determines the overall strength of concrete. If the aggregate is of poor quality, it will not make a proper bond with cement.

Overloading of Structure

overloading

Especially at younger age, overloading of structure is a common source of cracking. This can happen if formwork is removed before time or more construction load is present.

Mistakes at Design Stage

design stage

With errors at the design stage, it is only logical that problems will occur at site – Concrete cracking included.

Improper Curing

Improper Curing

Curing done inappropriately for given time span will cause cracking.

Early Formwork Removal

Early Formwork Removal

There will be cracking if formwork is removed before concrete has achieved its strength.

Congested Reinforcement in Lean Concrete

Congested Reinforcement in Lean Concrete

If heavy reinforcement is used in average quality concrete, stress distribution between steel and concrete can become non-linear causing cracking.

Mistakes at the Site or During Erection

Erection of Formwork

Lack of proper and trained labor and workmanship during concreting can cause cracking.

Link to original article

A Chronicle of Cloud Computing

A Chronicle of Cloud Computing

EARLY 1960’s

The computer scientist John McCarthy, came up with concept of timesharing, and enabling Organization to simultaneously use an expensive mainframe. This computing is described as a significant contribution to the development of the Internet, and a pioneer of Cloud computing.

IN 1969

The idea of an “Intergalactic Computer Network” or “Galactic Network” (a computer networking concept similar to today’s Internet) was introduced by J.C.R. Licklider, who was responsible for enabling the development of ARPANET (Advanced Research Projects Agency Network). His vision was for everyone on the globe to be interconnected and being able to access programs and data at any site, from anywhere.

IN 1970

Using virtualization software like VMware. It become possible to run more than one Operating System simultaneously in an isolated environment. It was possible to run a completely different Computer (virtual machine) inside a different Operating System.

IN 1997

The first known definition of the term “Cloud Computing” seems to be by Prof. Ramnath Chellappa in Dallas in 1997 – “A computing paradigm where the boundaries of computing will be determined by economic rationale rather than technical limits alone.”

IN 1999

The arrival of Salesforce.com in 1999 pioneered the concept of delivering enterprise applications via simple website. The services firm covered the way for both specialist and mainstream software firms to deliver applications over the Internet.

IN 2003

The first public release of Xen, which creates a Virtual Machine Monitor (VMM) also known as a hypervisor, a software system that allows the execution of multiple virtual guest operating systems simultaneously on a single machine.

IN 2006

In 2006, Amazon expanded its cloud services. First was its Elastic Compute cloud (EC2), which allowed people to access computers and run their own applications on them, all on the cloud. Then they brought out Simple Storage Service (S3). This introduced the pay-as-you-go model to both users and the industry as a whole, and it has basically become standard practice now.

IN 2013

The Worldwide Public Cloud Services Market totaled £78bn, up 18.5 per cent on 2012, with IaaS (infrastructure-as-a-service) the fastest growing market service.

IN 2014

In 2014, global business spending for infrastructure and services related to the cloud will reach an estimated £103.8bn, up 20% from the amount spent in 2013 (Constellation Research).

Vision of Cloud Computing

We have seen how far Cloud computing has progressed in the short time since its initiation. Now let’s have a look on what may become of Cloud computing technology in the future.

Following are few forecasts of what we might expect in the coming future of Cloud computing:

  • Cloud computing will become even more prominent in the coming years with rapid, continued growth of major global cloud data centers.
  • 50% of all IT will be in the cloud within the next 5 – 10 years.
  • There will be a greater use of cloud technology as a whole across emerging markets such as in the BRIC countries (Brazil, Russia, India and China) as they continue to develop and progress. The uptake will be particularly evident in Asia where there is already a trend to stay on the edge of the latest technology.
  • Data for companies and personal use will be available everywhere in standardized formats, allowing us to easily consume and interact with one another at an even greater level.
  • The security and reliability of cloud computing will continue to evolve, ensuring that data will be even more secure with numerous techniques employed.
  • We will not even consider ‘cloud’ as the key technology, instead we will focus on the services and applications that it enables.
  • Combining cloud technology with the Internet of Things (IOT), Wearables and Bring Your Own Device (BYOD) will become the norm in personal and working lives, so much so that the presence of cloud technology as an enabler will be overlooked. An estimated 50% of organizations will require employees to use their own devices by 2017.
  • The total global cloud computing spend will reach $241 Billion in 2020.

The future of the cloud is far from certain. The rapid pace at which technology has changed in the last 5 years makes the next 5 near impossible to predict. However, it must be said that ultimately the cloud is growing exponentially and will continue to do so for some time to come.

Link to original article

Businesses Moving to the Cloud

The Cloud’s Benefit to Business

Businesses of all sizes, industries, and geographies are turning to cloud services. Cloud adoption is accelerating faster than previously anticipated, leading Forrester to recently revise its 2011 forecast of the public cloud market size upward by 20 percent. The predictions are the fast growth of workloads placed in the cloud and an increased percentage of the total IT budget going toward cloud computing.

According to a study by the Cloud Security Alliance, 33% of organizations have a “full steam ahead” attitude toward cloud services and 86% of companies spend at least part of their IT budget on cloud services. IT leaders at 79% of companies receive regular requests from end users each month to buy more cloud applications with file sharing and collaboration, communication, social media, and content sharing topping the list of the most-requested cloud services.

According to a study conducted by market research company Vanson Bourne, there are numerous factors driving cloud adoption. The report “The Business Impact of the Cloud” compiles insights from interviews of 460 senior decision-makers within the finance functions of various enterprises. The report recapped 11 drivers of cloud adoption along with measurable improvements the companies have achieved by deploying cloud services to enhance productivity, lower cost, and improve time to market.

While not in IT positions, the majority of financial executives are actively involved in their organizations’ discussions about cloud strategy. Their perception of cloud computing includes benefits to the business as a whole. Companies that adopted cloud services experienced a 20.66% average improvement in time to market, 18.80% average increase in process efficiency, and 15.07% reduction in IT spending. Together, these benefits led to a 19.63% increase in company growth.

The Vanson Bourne report identified eleven benefits of cloud computing that organizations are experiencing today, leading to quantifiable improvements in their businesses:

1. Fresh Software

With SaaS, the latest versions of the applications needed to run the business are made available to all customers as soon as they’re released. Immediate upgrades put new features and functionality into workers’ hands to make them more productive. What’s more, software enhancements are typically released quite frequently. This is in contrast to home grown or purchased software that might have major new releases only once a year or so and take significant time to roll out.

2. Do more with less

With cloud computing, companies can reduce the size of their own data centers — or eliminate their data center footprint altogether. The reduction of the numbers of servers, the software cost, and the number of staff can significantly reduce IT costs without impacting an organization’s IT capabilities.

3. Flexible costs

The costs of cloud computing are much more flexible than traditional methods. Companies only need to commission – and thus only pay for – server and infrastructure capacity as and when it is needed. More capacity can be provisioned for peak times and then de-provisioned when no longer needed. Traditional computing requires buying capacity sufficient for peak times and allowing it to sit idle the rest of the time.

4. Always-on availability

Most cloud providers are extremely reliable in providing their services, with many maintaining 99.99% uptime. The connection is always on and as long as workers have an Internet connection, they can get to the applications they need from practically anywhere. Some applications even work without the Internet.

5. Improved mobility

Data and applications are available to employees no matter where they are in the world. Workers can take their work anywhere via smart phones and tablets — working in the field, at a plant, etc.

6. Improved collaboration

Cloud applications improve collaboration by allowing scattered people to meet virtually and easily share information in real time and via shared storage. This capability can reduce time-to-market and improve product development and customer service.

7. Cloud computing is more cost effective

Because companies don’t have to purchase equipment and build out and operate a data center, they don’t have to spend significant money on hardware, facilities, utilities and other aspects of operations. With traditional computing, a company can spend millions before it gets any value from its investment in the data center.

8. Expenses can be quickly reduced

During times of recession or business cut-backs, cloud computing offers a flexible cost structure, thereby limiting exposure.

9. Flexible capacity

Cloud is the flexible facility that can be turned up, down or off depending upon circumstances. For example, a sales promotion might be wildly popular, and capacity can be added quickly to avoid crashing servers and losing sales. When the sale is over, capacity can shrink to reduce costs.

10. Facilitate M&A activity

Cloud computing accommodates faster changes so that two companies can become one much faster and more efficiently. Traditional computing might require years of migrating applications and decommissioning data centers before two companies are running on the same IT stack.

11. Less environmental impact

With fewer data centers worldwide and more efficient operations, we are collectively having less of an impact on the environment. Companies who use shared resources improve their ‘green’ credentials.

 

*link to original article

Industries Destined for Technological Transformation

Industries Destined for Technological Transformation

We’ve heard tales of technological transformation for a while, and those stories are moving into their next chapters. The International Data Corporation suggests that 60% of global GDP will come from digital organizations by 2022. These players are benefiting from big data, powerful analytics, artificial intelligence, and other advances to drive growth. Check out some of the industries destined for technological disruption.

Every business that’s interested in rising to the top of the corporate food chain will need some technology included in the business – Technology is a necessity for any business to survive.
Four of the five most noteworthy organizations in the world are tech companies, and it’s a category everyone is insisting to dip into.
The technology category is easily seen in WeWork’s 2019 IPO filing, which used some form of the word “tech” to describe the company 110 times. Clearly, leadership was pushing to show investors that it’s much more than a real estate company and should be shown as a player in the tech world, too.

So Is Everybody Truly a Techie?

Until this point, the effects of technology have been far-reaching, and that’s not scheduled to stop anytime soon. The difference is that now, traditional industries are about to be disrupted, too.

Five Industries Destined for Technological Disruption:

1. Healthcare

If you think everything is fine in the healthcare space, you probably haven’t been to the doctor recently or reviewed your medical bills. The industry is plagued by inefficiencies and issues. For instance, manual processes that should be automated, like billing and scheduling, require the use of an ancient Egyptian development known as paper when done by hand while it should be streamlined and optimized with tech.
On top of that, booking an appointment with your doctor can sometimes take months, and when your time slot finally rolls around, you’ll be in the waiting room for four hours watching HGTV reruns and thumbing through old magazines. The problems lie in the sheer complexity of the healthcare system and the fact that only a few players make the rules. Healthcare has historically stood in the way of innovation, but companies like Amazon, Apple, and Google are entering the fray and changing that narrative. You can expect block chain medical records, on-demand care, and new drug development all driven by AI in the years to come.

2. Construction

The multitrillion-dollar world of construction hasn’t changed much in the past century.
By and large, builders still rely on outdated materials and methods. This will be changing seeing as an investment in construction tech startups grew by 324% between 2017 and 2018. New potential technologies are shaking things up.
Self-healing and energy-generating building materials like solar shingles and AI-powered software that can instantly calculate the most efficient schedules for construction will soon become a regular part of operations.

3. Real Estate

Real estate is the largest industry in the U.S., contributing $3.5 trillion to the GDP, it is also kind of stuck in the dark ages. It relies on real estate agents, title companies, pen and paper, and numerous service providers for every transaction. Like in many other industries, however, that’s changing.
Zillow has emerged to provide a wealth of information to prospective homebuyers and even uses a feature called 3D Home to let users conduct a virtual walkthrough of a house.
Fancy tech features in the industry extend just beyond viewing homes. For example, Built is a company that digitizes what has long been a manual loan management process for banks. As a result, the role of real estate agents is likely to become less in-demand as users are empowered to buy and sell on their own with the power of technology.

4. State and Local Government

Unbeknownst to many people, state and local governments encompass the second largest industry in the U.S. Government is turning to technology to become more effective and efficient. San Francisco developed a chatbot called PAIGE that helps government departments facilitate and smooth out what used to be a complex IT procurement process.
An egg-shaped robot security guard patrols a gas station on a crime-ridden corner to help local police. As Internet of Things devices take hold, we can expect to see even more government investment in this technology. Technology has the potential to make the governments functions and processes much stronger on the local, state and even at a national level.

5. Finance and Insurance

Insurance and finance companies are some of the oldest businesses in the world — and in many cases, it shows. In the finance industry, cash was always king until the advent of credit and debit cards. Now, mobile payments are on their way to someday reigning supreme. Some countries like Sweden and China are already moving toward being cashless societies. Banks and cash will disappear, and mobile payments authorized by facial recognition will likely become the norm.
When it comes to insurance, major players are being forced to play the tech game, too. State Farm recently announced a new version of its Drive Safe & Save mobile app. Great, another way to charge us more insurance money. The app analyzes data collected by sensors and Bluetooth from smartphones that have the app installed. Tech-driven personal information is already determining rates, and that information will become even more common and accurate with time.

Technology has been changing the way companies create value for a long time. Technology still has changes that have yet to sweep across every industry. However, disruption is headed for sectors like construction, healthcare, and real estate. It’s on par with the modernization of transportation and hospitality that we saw with the rise of Uber and Airbnb.
As investors look to be a part of the next big wave of innovation, rapid developments, and more innovations will leave slow-moving organizations behind if they don’t get on board, too.

Juan’s Ready Mix

Producer Profile

Juan’s Ready Mix
2016 revenue: $475 million
Locations: 85 plants
EBITDA: 10.4%

The expense of a ticket

Juan’s Ready Mix was concerned about the costs associated with IT support for the quote-to-cash process. The CFO reviewed the spending on IT support and made a list of the process:

 

• Hardware
– servers
– data center
– installation
– configuration
– switches
– routers
– security fees
– energy (power and cooling)
– maintenance and annual support
• Software
– Systems for dispatch
– DB
– security
– mix management
– quality control
– annual support
– other
• Connectivity
– Systems for dispatch
– installation
– configuration
– support fee
– T1
– trunk
– modem
– router
– wiring
– internet line between server locations and remote sites

• Servers, switches, routers, security fees

– installation
– configuration
– maintenance
– annual support
• Labor
– Employee support, maintenance and configuration of software and hardware
– Contractors for configuration, training, support and maintenance
– Training expenses

 

The CFO recognized that any equipment or software that was 10 years or older represented a tangible risk of failure, and planned to re-purchase these items. He calculated a reasonable, ongoing amortization amount for purchasing new equipment and software. In 2017, the producer delivered 602,410 loads at an all-in cost of $2,620,000. The IT “tax” on operations totaled $4.35 per ticket or 0.55% of revenue.

The cost of the Cloud

The CFO created a technology focus group to scour the marketplace for SaaS (Software as a Service) offerings to improve the quote-to-cash process. Given the extreme age and technical obsolescence of the core dispatch software, it was difficult to find suitable “plug-in” alternatives for functional areas such as CRM. However, several component packages were identified as well as a promising quote-to-cash offering.
The SaaS offerings were found to have several key features, first of which was Total Cost of Ownership (TCO). The pricing model was based on usage and thus scaled with the seasonal volume. Further, there was no need for servers, data centers, support software, or the hoard of staff required for support. Finally, and somewhat unexpectedly, data exchange and security were much better since the SaaS offerings were all based on modern tools.
As a result of the focus group’s findings, Juan’s Ready Mix began migrating away from outdated, client-server tools to modern, Cloud-based systems. The economics justified the change; but more importantly, the modern tools enabled Juan’s Ready Mix to improve business processes to reduce costs for the producer and its customers. Customers loved being able to see daily activity on mobile phones, salesmen could quote on tablets, and so much more.

Economic impact

Juan’s Ready Mix has started the process of switching from client-server based software to SaaS. The first target was an isolated group of five plants and included a complete transition to SaaS. The all-in costs of the SaaS, prior to staff training, amounted to $2.50 per ticket. This equated to a savings of $1.85, with the (invaluable) bonus of empowering better business processes. The CFO plans to complete the company-wide transition in 2019, anticipating a $1,115,000 savings, or 2.3% EBITDA improvement.

Some Concrete History

The Age of Concrete

Al-Khazneh, aka. The Treasury Monument in Petra

Proven to last thousands of years, concrete is currently one of the most popular building materials. While it’s been well studied with the Ancient Romans, they were not the first to use concrete. The Romans (~300 BC) may have used concrete in larger amounts and more regularly, but were certainly not the first.

Archaeological evidence of concrete use dates back to 5600 BC in Europe, 3000 BC in China and 2500 BC in Egypt. The oldest structures Archaeologists have found were built by the Nabataea traders using a type of concrete material to develop a small empire in the regions of southern Syria and northern Jordan around 6500 BC. They created concrete floors, fire pits, housing structures, and underground cisterns.