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What is the ‘Data Utilization’ management required in the Internet of Things (IoT) era? With the rapid spread of mobile devices, penetration of cloud computing and rise of network video distribution service, several changes are rapidly progressing in the world of the Internet, and ‘IoT’ is one of the big changes. What kind of impact does IoT bring to corporate management?

‘Father of the Japanese Internet’, Jun Murai, Professor in Department of Environment Information, Keio University; Jerome Lecat, CEO Scality, a rising storage vendor; and Hiroshi Fujiwara, Chairman and President, Broadband Tower, the first domestic distributor of Scality’s petabyte-scale software-defined storage (SDS) ‘Scality RING’ engaged in a lively discussion.

Japanese corporations have missed the flow of business creation from utilizing IoT data

Fujiwara: Our company has been deploying data centers that support the Internet environment as a specialty business entity since 2000, the dawn of the Internet in Japan. The Internet has become a social infrastructure, something we cannot do without like electricity, water and gas. The Internet is surpassing an era of the network where humans operate computers, and is rapidly moving into an era of IoT where devices embedded in computers are mutually connected to the Internet and exchange data.

Murai: Japanese managers need to firmly think about the influence exhibited by IoT. When we talk about IoT, we tend to mainly pay attention to sensors, but the true major role of IoT is ‘data’ gathered from various devices. First, IoT enables the gathering of various data that were not obtained in the past by using a large amount of networked devices without human intervention. Next, obtained data by conventional sensors were mostly used for follow-up verification, but when IoT progresses, data will be analyzed onsite in real time, new knowledge will be extracted from the huge amounts of accumulated data, and the data can be used to create completely new businesses.

Fujiwara: It seems that the movement of IoT in Japan is too limited to manufacturing, when actually, utilizing huge data generated by various devices seems to be a key of the corporate management in the IoT era.

Murai: Precisely so. As an example of how corporate management in the IoT era should be, let’s think about Netflix, a video distribution company in the US, which started the service in Japan on September 1 of this year. The company determines program content and casting by analyzing huge tracking data, recording all activities of audiences, such as when and which program they watched, and utilizing this data. I think Netflix’s example of creating new programs based on human activity data generated in real time is a good example of what is possible in the IoT era.

Fujiwara: IoT tends to be considered as a ‘Future Story’, but as is represented by Netflix, the world is steadily moving toward a direction to create new business by utilizing data that are generated every second. Can Japanese corporations respond to a drastic change of market environment induced by IoT?

Murai: I have big doubts. According to a 2013 attitude survey of world management class done by a GE think tank, the number of Japanese managers who utilize data for innovation are far and away the lowest in the world. It seems that Japanese corporations have completely missed the creation of new business utilizing the IoT data.


SDS holds the key for ‘Data Utilization’ Management

Fujiwara: In order for Japanese corporations to turn to data-driven management in the future, I think that data management on the premise of utilizing data is essential. From this viewpoint, in recent years, ‘Storage’ is a technology that assumes a specifically important position. Scality is a storage vendor founded in France in 2009, and its main product, ‘Scality RING’, a petabyte scale SDS has already been adopted by more than 80 large-scale production environments including two major Japanese mobile phone carriers. It established a Japanese subsidiary in March of this year and started a long-awaited expansion to the Japanese business world, but what is SDS to put it briefly?

Jerome: Conventional storage is a product genre in which hardware plays the central role, but SDS is a completely software product. By separating software and hardware, limitations originated from hardware associated with the operation of conventional storage are swept away, and flexible data management is possible. Especially, Scality RING can be much more cost effective for large-scale environments since it operates on generic commodity servers.

Fujiwara: Since the IoT data are generated every second, even if each data may not be large, but when they are continuously stored, they may eventually pressure the capacity of storage. Moreover, since simple accumulation and storage is not an objective of the IoT data, it has no meaning unless they are stored for utilization in business. How does Scality RING respond to these data management requirements in the IoT era?

Jerome: Since we started business in 2009, we have been developing products by setting ‘Expandability’ as a core, and it is no doubt that this flexible expandability of Scality RING is suitable in the IoT era. Here, what we call ‘Expandability’ includes 3 different aspects. The first is expandability of ‘Capacity’. As the actual max capacity so far, we refer to 500PB at Los Alamos National Laboratory, but it is not always possible to forecast increase in data, so we employ an architecture that allows flexible capacity expansion. The second is expandability of ‘Performance’. Performance of conventional storage products tends to decline as the data to be stored increases, but Scality RING accelerates performance as the data amount increases. One of our user corporations is Dailymotion, which is a network video sharing service with more than 300 million unique visitors per month. Dailymotion has realized high performance responding to high traffic and a reduction of the total cost of ownership by introducing RING. The last is expandability in the aspect of ‘Ease of Use’. The RING allows resources to be efficiently utilized in keeping with business growth of the user corporation. Scality RING realizes all three of these aspects of expandability.

Murai: From the view point of a user corporation, since almost limitless data can be stored, data that are discarded due to capacity or cost until now can be stored in a continuous access condition and can be utilized for analysis. This is a big deal. I mentioned that there is an issue on how to connect the accumulated data to the value of new business in Japanese corporations, so could you give some suggestions to Japanese managers?

Jerome: I think, in order to create new business by utilizing data in the future, investment in the ‘Machine Learning’ field – this includes not only technology but also investment in employees who became proficient at machine learning – becomes important. I’ll give a customer example. This company is a major manufacturer of devices for airplanes in the world, and generates over 1 TB of data in a single flight. There are several thousand flights of airplanes in a day, so petabyte scale is reached in a blink of time. This company stored this data, and initially did not know how to use it, but now it can predict airplane device problems at a high accuracy by linking a machine learning application to the RING. Since Scality RING is highly linked with big data processing applications and executes data accumulation and processing at the same location, it is a solution suitable in the IoT era for this viewpoint.


How does Japanese IT education change?

Fujiwara: Changing the viewpoint slightly, I would like to talk about the human resources needed for corporate management in the IoT era. Although the importance of IT education in Japan is emphasized, the argument is always how to acquire knowledge and skill of IT, and rarely touches on how to provide these possibilities to children. For this point, an example to be studied by the Japanese educational system is ‘Ecole 42’ in Paris, France. This school is a programming school created in 2013 by Mr. Xavier Niel, a multi-millionaire in the IT industry in France, and is producing many excellent engineers every year. The learning method is unique. There are no teachers, textbooks, laboratories, and no tuition. About 1,000 students whose backgrounds are widely different gather in a building, and each student is given a PC and hard programming problems. Small groups are formed and solve the hard problems by working together using the Internet. I heard that Scality supports Ecole 42.

Jerome: That’s right. I think it is very important to support a socially meaningful approach such as Ecole 42 on CSR (Corporate Social Responsibility). We have already hired 12 excellent students of Ecole 42 and are very satisfied. One of major characteristics of this school is its grade evaluation system. At Ecole 42, students evaluate whether other students made a sufficient effort to achieve results and approached to the problem positively. According to some research, evaluation by students instead of evaluation by teachers enables a more accurate evaluation of ability and characteristics of each student. I agree with this opinion. The learning method at Ecole 42, where students usually obtain necessary information for programming from the Internet by themselves and engage in problem solving autonomously, but also solving hard problems in a coordinated manner by group learning, is an important foundation for eventual work in the society.

Fujiwara: Shonan Fujisawa Campus (SFC) of Keio Univeristy where Professor Murai works is known for being on the forefront of enterprising academics. What do you think about the learning method at Ecole 42?

Murai: I think it is a very reasonable learning method. SFC at Keio has a curriculum by which everyone learns programming and big data analysis, but it still uses a learning method based on projects. If students learn by solving projects by themselves instead of having a teacher tell them how to do, we can expect unexpected results and new solutions instead of fixed results. I think we could expect creative results.


Fusion of IT and management strategy accelerates

Fujiwara: The Internet industry up until now is only an information communication industry centered by Internet service providers. However, in the future, the main battle field of Internet will move to industry fields that are not directly related to the Internet industry such as manufacturing, broadcasting, construction, transportation, agriculture and medicine. Professor Murai, Mr. Jerome, could you give a message to Japanese managers about this evolution?

Murai: In the US, more than 70 percent of IT engineers belongs to user corporations, on the other hand, in Japan, IT engineers are concentrated in IT service corporations. This difference may significantly change the Japanese future. I think attitude for fusing management and IT by following technologies in forefront such as SDS, and promoting IT investment positively will become more important in the future.

Jerome: Japan has overwhelming high customer demand for quality and process of product and support. We learned this from the Japanese market and used it for product improvement. I would like to build a new era together through partnership with Japanese corporations.

Fujiwara: Since SDS is not tied to specific hardware, it does not depend on specific server vendors, and is completely neutral to a wide range of vendors. No doubt, this neutrality is the reason why Broadband Tower became the first Scality distributor, selecting Scality RING over many other storage products. What Broadband Tower is expecting from IoT is the creation of a common platform that allows information of all corporations beyond manufacturing, distribution and transport industries to be open and mutually connected. For example, suppose an automobile is produced. The network created there has meaning not only for the automaker, but also the transport industry, and further, the distribution industry. By abandoning the central research principle (self-sufficiency), and gathering wide technologies, ideas, and human resources without a separation between companies, we can realize innovation that was impossible until now. Utilization of IoT will lead to a recovery of the international competitiveness of Japanese industry and the eventual recovery of the Japanese economy.

A short excerpt is also available in video:

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