Management Information Systems Microsoft, Other Tech Giants Race to Develop Machine Intelligence GE Bullish on Data for Big Industry STUDY BOTH MICROFT & GE CASES TO ANSWER THE TWO QUESTIONS BELOW . 1. What's the big deal about \"big data\"? Please explain and elaborate on the concept of \"big data\" in general including its relatively new prominence, intended and planned usage by corporate America and/or governmental agencies. 2. Microsoft's focus on \"big data\" is intriguing; what opportunities do they have? Compare Microsoft's foray into \"big data\" with General Electric. Commonalities? Divergence? Microsoft, Other Tech Giants Race to Develop Machine Intelligence Microsoft Corp. MSFT -2.68 % 's $26.2 billion deal to buy LinkedIn Corp. LNKD -0.06 % is the latest turn in a race by the software giant and its competitors to mine vast quantities of data searches, emails, social networks, browsing behaviorfor insights that would help their products serve and even anticipate customer needs. Microsoft, Apple Inc. AAPL -2.23 % and Alphabet Inc. are moving deeper into using machine learning, in which computers rapidly examine existing information in search of patterns that their products can use to understand new information as it arrives. As Microsoft unveiled its acquisition, Apple was showing off a plan to bring advanced computer vision to its photo software. The idea: let an iPhone identify family and friends to help categorize images more easily. Last month, Alphabet unveiled Google assistant, a software helper designed to predict what users want by analyzing their behavior. It would learn their preferences so that it might offer to make dinner reservations when a restaurant was mentioned in a text message. With LinkedIn, Microsoft gains a trove of details about the work lives, colleagues, and employers of the business social network's 105.5 million monthly active users: a unique set of data that the software giant hopes will give it an advantage in serving business customers. \"That's really what this next wave of technology innovation is about,\" Microsoft Chief Executive Satya Nadella said during a conference call on Monday, referring to machine learning. \"But in order to be able to do that, you need data, and LinkedIn represents that.\" Microsoft, which has embraced the spread of \"intelligence\" throughout its offerings as an explicit goal, aims to enhance, rather than replace, human performance. Where Google's autonomous cars stop, turn, and change routes without human intervention, Microsoft has focused on using machine intelligence to provide insights that can inform human decisions. Forrester Research Inc. FORR -2.68 % analyst Jeffrey Hammond refers to Microsoft's approach as \"augmented intelligence\" to distinguish it from artificial intelligence. \"It adds a whole lot of rich contextual information,\" Mr. Hammond said. The fruits of this approach are already available in the Redmond, Wash., company's products. Last month, it revamped its SharePoint collaboration and networking program to analyze lists of meeting attendees, frequent email correspondents, collaborators on documents, and the like. The software uses the results to deliver information, such as internal reports or news articles that might be useful to a given user. If Microsoft can deliver on that promise, LinkedIn data will feed Microsoft products such as SharePoint, the Office productivity suite, or Dynamics sales tools, to streamline projects and pinpoint prospects. Microsoft, as part of its presentation to analysts about the deal, described a scenario in which Cortana, its digital assistant, notified a user that a coming meeting included someone who attended the same college and shared a LinkedIn connection. Then, Cortana offered to link to the attendee's profile and share the meeting presentation. Other tech giants have their own versions of Microsoft's Cortana strategy. Apple's voiceactivated assistant Siri is now smart enough to work with non-Apple apps to perform tasks like calling for car service or sending messages through text networks like WeChat. TCEHY -2.64 % Facebook FB -1.36 % is fine-tuning a concierge called M whose digital brain passes along to human attendants any requests that it isn't sure it can fulfill. IBM IBM -3.53 % 's Watson has been studying medical data in hope of helping doctors make faster, more accurate diagnoses. Amazon.com Inc. AMZN -1.79 % 's Echo, a smart household gadget in the form of a small cylinder, functions as ears and voice for Alexa, an artificial intelligence that answers spoken questions about topics like weather and traffic. Google intends to roll out Google Home, an Echo competitor that taps the search giant's vast data repository to understand what users want. Like Microsoft, all the tech behemoths aim to distribute intelligence throughout their products. \"The next big step will be for the very concept of the 'device' to fade away. Over time, the computer itself whatever its form factorwill be an intelligent assistant helping you through your day,\" Google CEO Sundar Pichai wrote in an April letter to shareholders. Artificial intelligence, though, has proven remarkably foolish at times. In March, Microsoft introduced Tay, a Twitter TWTR -0.94 % feed that mimicked the texting habits of an American woman aged 18 to 24. But online pranksters gamed Tay's learning mechanism, which led the bot to tweet anti-Semitic rants. As tech giants train their machine learning engines on ever larger stores of data, the potential grows for users to feel unnerved. To derive value from LinkedIn, Microsoft will need to keep tabs on users' contacts, communications and activities. Its AI will be informed by updates to LinkedIn profiles, which may indicate that a user is considering a career move, and project management systems, which may contain designs of future products and other strategically sensitive information. \"How do they use that data to provide a truly convenient experience without crossing the border into creepy ones?\" asks Forrester's Mr. Hammond. At LinkedIn, users control how they share their data. Mr. Nadella said that customers would decide what to share. But Microsoft, like its peers that occupy the center of the digital universe, is betting that those customers will let it mine their information because they'll get value from the insights it generates. \"When it comes to machine learning and analytics, it is a tremendous opportunity for us,\" Mr. Nadella said. Jay Greene. The Wall Street Journal, June 14, 2016. GE Bullish on Data for Big Industry Technicians work at a General Electric Aviation jet engine facility in Lafayette, Ind. The company will put $1.4 billion into GE Digital, its California-based software business that uses data to improve industrial operations. PHOTO: BLOOMBERG NEWS General Electric Co. GE -3.10 % will plow $1.4 billion into its fast-growing software business this year, as the maker of jet engines and power plants races to dominate the market for digital tools to control major industrial operations. The company said the investment will help drive rapid growth in revenue for its California-based GE Digital business, which it forecasts will reach $15 billion in 2020, more than double the $6 billion-plus it is expected to bring in this year. \"We're in a horse race,\" GE Digital Chief Executive Bill Ruh said in an interview, as competitors in Silicon Valley and other industrial manufacturers try to develop similar software that can fine-tune the operation of heavy machinery and avoid unplanned downtime. GE began its push into software and digital offerings in 2011 when it opened offices near Silicon Valley and began hiring hundreds of software engineers. The drive is a central piece of Chief Executive Jeff Immelt's strategy to refocus on its industrial roots of power generation, jet engines and medical equipment, after shrinking its finance operation. Mr. Immelt now refers to GE as \"the digital industrial\" company, and the company said its software efforts are helping to streamline its own manufacturing and design processes. GE itself will reap $1 billion in added productivity from its operations as more factory and design processes are fed into digital systems that improve collaboration and speed up production cycles. But the business case is to sell the products to its industrial customers--like airlines, power utilities and hospitals -- that are struggling to wring greater productivity out of heavy machinery in a time of slow global economic growth. For the aviation business, that means providing owners of GE jet engines with new predictive models that will show when parts are more likely to need replacement based on the environment in which the engines fly. In its power business, GE helped Qatar-based natural gas producer RasGas Company Ltd. reduce downtime on its mile-long liquefied natural gas production trains, avoiding one-day outages that can cost $150 million, the company said. Its digital business is still small compared to sales of its jet engines, power turbines, locomotives and medical scanners. GE's industrial operations had revenue of $108.8 billion in 2015. It has added 5,500 new developers in the past few years and plans to add 2,000 more by year-end. Its total digital workforce is around 28,000 globally, a fraction of its 333,000 total employees. GE is betting that there is more money to be made from connecting and harvesting the data of heavy industrial machines like jet engines than in other areas of the so-called \"internet of things,\" like wifi-enabled thermostats and stereos. \"We don't think the money is in connecting thermostats,\" Mr. Ruh said. \"There may be money at the home but nobody knows.\" Ted Mann. The Wall Street Journal, June 23, 2016