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Open source AI stack is ready for its moment

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AI software stack

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Open source stacks enabled software to eat the world. Now, several innovative companies are working to build a similar open source software stack for AI development.

Dan Jeffries was there when the LAMP stack kicked this off. Perhaps you don’t know, or remember, what the LAMP stack is, but it’s actually pretty important.

LAMP is an acronym representing the key technologies first used in open source software development — Linux, Apache, MySQL, and PHP. These technologies were hotly debated back in the day. Today, they are so successful that the LAMP stack has become ubiquitous, invisible, and boring.

AI, on the other hand, is a hot topic today. Much as the LAMP stack turned software development into a commodity, and made it a bit boring, especially if you’re not a professional developer, a successful AI software stack should turn AI into a commodity — and even make it a little boring. But that is precisely what Jeffries is out to do with the AI Infrastructure Alliance (AIIA).

Innovation, and where it’s at

Jeffries wears many hats. His main role, in theory at least, is chief technical evangelist at data science platform Pachyderm. Jeffries also describes himself as an author, futurist, engineer, systems architect, public speaker, and pro blogger. It’s the confluence of all those things that led him to start the AIIA.

The AI Infrastructure Alliance’s mission is to bring together the tools data scientists and data engineers need to build a robust, scalable, end-to-end, enterprise artificial intelligence and machine learning (AI/ML) platform.

This sounds like such an obvious goal, something that would be so beneficial to so many, you’d think somebody must have done it already. Asking why we’re not there yet is the first step toward actually getting there.

Vendor lock-in is part of the reason, but not the only one. Vendor lock-in, after all, is becoming increasingly less relevant in a cloud-first, open source first world — although technology business moats live on in different ways.

It surprised Jeffries that he did not see an organization actually trying to capture the energy around AI activity, bring different companies together, and get them and their integrations teams talking to each other:

“Every founder and every engineer I ended up talking to was very excited. I really didn’t have to work very hard to get people interested in the concept. They understood it intuitively, and they realized that the innovation is coming from these small to mid-sized companies.”

“They are getting funded now, and they’re up against giant vertically integrated plays like SageMaker from Amazon. But I don’t think any of the innovation is coming from that space.”

Having spent more than 11 out of his 20-year career at Red Hat, Jeffries recalls how the proprietary software companies used to come up with all the ideas and then open source would copy it “in a kind of OK way.”

But over time, most of the innovation started flowing to open source and to the smaller companies’ projects, he noted.

An open source AI stack for the future

The Amazons of the world have their place — the cloud is where most AI workloads run. Proprietary big vertically integrated systems serve their own purpose, and they’re always going to make money. But the difference is Kubernetes and Docker don’t become Kubernetes and Docker if they only run on Google, Jeffries said.

Innovation is going to come from a bunch of these companies working together like little Lego pieces that we stack together, he added.

That’s precisely what the AIIA is working on.

So, when can we expect to have a LAMP stack for AI? Not very soon, probably, which brings us to the other key reason this has not happened yet.

Jeffries expects a LAMP stack, or a MEAN stack, for AI and ML to emerge in the next five to 10 years and change over time.
The LAMP stack itself is kind of passé now. In fact, the cool dev kids these days are all about the MEAN stack, comprising MongoDB, ExpressJS, AngularJS, and NodeJS, or something along those lines.

He has described these as canonical stacks. These are stacks that arise with greater and greater frequency “as organizations look to solve the same super challenging problems.”

The same kind of momentum that happened with LAMP will happen in the ML space, Jeffries suggests. Don’t believe the hype that anyone has the end-to-end ML system at this point, he warns. This can’t be true because the sector is just moving too fast. The space itself and the problems we need to solve are in motion at the same time as the software is being created.

That makes sense, but then the question is — what exactly is the AIIA doing at this point? And what does the fact that its ranks include some of the most innovative startups in this space, alongside the likes of Canonical (the company) and NewRelic, actually mean?

Above: Open source stacks enabled software to eat the world. Now, some innovators are working to build an open source stack specifically for AI.

Image Credit: AI Infrastructure Alliance

Open source stacks enabled software to eat the world. Now, some innovators are working to build an open source stack specifically for AI. Enthusiasm is all fine and well, but there’s a distance between saying “Hey, that sounds like a good idea, sign me up” and actually coming up with a roadmap and a plan to make it happen. So how are the AIIA and Jeffries going to walk the walk?

As a writer, Jeffries used George R.R. Martin’s metaphor of gardeners and architects to explain how he sees the evolution of AIIA over time. Architects plan and execute; gardeners plant seeds and nurture them.

Jeffries identifies as a gardener and sees a lot of the people he works with in the organization as being gardeners. He thinks it’s necessary at this phase, as he sees the AIIA evolving and its mission shifting over time.

Right now, the idea is to get people talking at a lot of different levels, rather than working in their own little silos. Micro-alliances are fair game though: “If you look at 30 logos on the website, you’re not going to build an ML stack with all 30 of those things,” said Jeffries.

Another concern is the fact that building bridges, and communities, takes time and energy. Jeffries is enthusiastic about the prospect of helping shape what he sees as the AI revolution, is inspired by the open source ethos, and has the leeway from Pachyderm to run with his ideas.

Work, boring work, and AI

That seems to be what he’s doing with AIIA. Currently, he’s working on turning the AIIA into a foundation, and he’s also in talks with the Linux Foundation. The goal is to get to a point where they can add some revenue into the equation. Jeffries is working on things such as finances and a governance structure for the AIIA.

“You get people who are just firmly focused on this, and it becomes a balance of volunteer efforts and people paid to work on different aspects. The next step really is a lot of logistical work — the boring stuff,” Jeffries said.

Another metaphor Jeffries used is that of a strategic board game, where you have to think about everything that can go wrong in advance — a bit like a reverse architect. Inevitably, there is going to be at least some amount of boring work, and somebody needs to do it. But for Jeffries, it’s all worth it.

“When I look at AI at this point, I think very few people understand just how important it’s going to be. And I think they have an inkling of it, but it’s usually a fear-based kind of thing,” he said. “They don’t understand fully that in the future, there are two kinds of jobs: one done by AI, and one assisted by AI.”

Isn’t it actually three types of jobs, as someone has to build the AI? The people building AI are going to be assisted by AI, so that falls into the second category, Jeffries said. There’s a creative aspect, as someone has to come up with an algorithm. But things like hyper-parameter tuning are already being automated, he added.

Jeffries waxed poetic about how “the boring stuff” will be done by AI so people can move up the stack and do more interesting things. Even the creative parts will be a co-creative process between people and AI, in Jeffries’ view.

As for the “AI destroys all the jobs” narrative, we’ve heard this one before but the previous industrial revolutions worked out fine, Jeffries argued. Same goes for the counterargument that the pace of innovation is so rapid that you just don’t have enough time to create jobs to replace those that are going to be displaced.

What even an AI optimist like Jeffries can’t easily dismiss is the fact that innovation may not necessarily be coming from the FAANGs, but this is where the data is. This creates a reinforcement loop, where more data begets more AI leading to more data, and so on.

This was not lost on the Economist, and it’s not lost on Jeffries, who acknowledges data as a legitimate moat. He believes, however, that ML is progressing in ways that make the dependency on data less vital, such as few-shot learning and transfer learning. That, and the fact that the amount of data the world is creating is not getting smaller, may change things.

In the end, the stance people take on AI is a deeply philosophical question. What seems inevitable, however, is the need to do lots of work, often boring, to be able to go after dreams of creativity.

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Replicated: Demand for on-premises software equally as strong as SaaS

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Replicated: Demand for on-premises software equally as strong as SaaS

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While there is a strong demand for cloud applications and software-as-a-service, security, regulatory, and compliance requirements continue to drive demand for on-premises software. In a new Dimensional Research report, 92% of companies said on-premises software was growing. The report, sponsored by Replicated, a software delivery and management company, found that current customer demand for on-premises software was equal to that of public cloud.

Above: Customer demand for on-premises software delivery isn’t slowing down anytime soon.

While it may be popular to believe that “cloud is king” and SaaS is the best and most in-demand modern enterprise software, data shows that demand for on-premises software is equally as strong. It’s the smart choice for customers operating under security, regulatory, and compliance requirements; many organizations cannot allow their customer data to be shared in multi-tenant environments. Additionally, software companies that do not currently provide an on-premises solution to customers leave money on the table and miss a significant business and competitive opportunity.

This new report from Dimensional Research, sponsored by Replicated, highlights the missed business opportunities for software vendors who are not offering an on-premises version. The report provides detailed insights around the current use, need, and challenges for on-premises software and its installation, configuration and management. This report also takes a closer look at the parallel rise in the adoption of container-based applications and the use of Kubernetes.

Perhaps the most important findings are that 92% of surveyed participants reported their on-premises software sales as growing, and that on-premises solutions are equally as popular as their public cloud alternatives. This directly counters the popular narrative that SaaS has overtaken on-premises software delivery, as security and data protection stay top of mind for enterprise software customers.

The survey from Dimensional Research includes feedback from 405 business and technology professionals at executive and manager seniority levels, representing software companies of all sizes around the world across a wide variety of different industries.

Read the full report from Replicated

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Roblox hits Q1 bookings of $652.3 million, up 161%, in first report as public company

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Roblox's user-generated game characters.

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Roblox, the platform for Lego-like user-generated games, reported its earnings for the first time as a publicly traded company. This met analysts’ expectations. Bookings for the first quarter ended March 31 were $652.3 million, up 161% from the same quarter a year ago.

Roblox has done among its target audience of children and teens during the pandemic, as players turned to it for remote, socially distanced play with their friends at a time when they couldn’t meet in-person.

Roblox previously raised $520 million at a $29.5 billion valuation in a financing round ahead of its direct listing on the New York Stock Exchange as a public company. It opened on March 10 at a valuation of $41.9 billion a share and has hovered around that value. Investors greeted the results positively, with Roblox trading up 5% at $67.18 a share in after-hours trading.

Q1 results

Analysts expected a loss of 21 cents a share on bookings of $568.6 million. Most video game companies emphasize non-GAAP bookings, or the total value of virtual currency purchases by players during the quarter, instead of revenues, which under accounting rules are limited to those purchases that are expected to be fully resolved within a certain time period. For instance, a player may buy Robux currency in the first quarter, but spend it over 10 months. That revenue has to be recognized over time, as it is spent inside the platform’s games.

Roblox’s quarterly revenue came in at $387 million, up 140% from a year earlier. The GAAP net loss for the quarter was $134.2 million. But operating cash flow as positive, and so that means cash is coming into the business, said chief business officer Craig Donata in an interview with GamesBeat.

“We had a strong quarter in terms of bookings, revenue, and operating cash flow, and more important, in terms of daily active user growth and time spent by players,” Donato said.

Roblox gets a 30% cut from the bookings generated by sales of Robux, the virtual currency used by players to play user-generated games, the company’s bookings for 2020 were $1.9 billion, double what they were the year before. Roblox’s games have become so popular that people have played the best ones billions of times. On average, 32.6 million people come to Roblox every day. More than 1.25 million creators have made money in Roblox. In the year ended December 31, 2020, users spent 30.6 billion hours engaged on the platform, an average of 2.6 hours per daily active user each day.

Above: Roblox’s user-generated game characters.

Image Credit: Roblox

Net cash provided by operating activities increased nearly four times in Q1 2021 over Q1 2020 to $164.5 million (including one-time direct listing expenses of $51.9 million). Exclusive of one-time expenses related to the direct listing, net cash provided by operating activities would have been $216.4 million.

Free cash flow increased 4.1 times over Q1 2020 to $142.1 million. Average daily active users (DAUs) were 42.1 million, an increase of 79% year over year driven by 87% growth in DAUs outside of the U.S. and Canada and 111% growth in DAUs over the age of 13.

Hours engaged were 9.7 billion, an increase of 98% year over year primarily driven by 104% growth in engagement in markets outside of the U.S. and Canada, and 128% growth from users over the age of 13. Average bookings per DAU (ABPDAU) was $15.48, an increase of 46% year over year.

April results

Rather than make forecasts about how its upcoming quarter is expected to go, Roblox is not making a forecast. Rather, it is disclosing the actual results for the month of April, which is part of the second quarter.

For the month of April alone, daily active users were 43.3 million, up 37% from April of last year and up sequentially from 42.3 million in the month of March 2021. Hours engaged in April were 3.2 billion, up 18% year over year and flat sequentially from March 2021.

Bookings were between $242 million and $245 million, up 59% to 61% year over year and up sequentially 7% to 9% from March 2021 when bookings were $225.3 million.

Average bookings per DAU were between $5.59 to $5.66, up 16% to 17% year over year and 5% to 6% sequentially from March 2021. April revenue was $143 million to $145 million, up 136% to 140% year over year and 5% to 7% sequentially from March 2021.

“Our first quarter 2021 results enabled us to continue investing aggressively in the key areas that we believe will drive long term growth and value, specifically hiring talented engineering and product professionals and growing the earnings for our developer community,” said chief financial officer of Roblox Michael Guthrie,  in a statement. “We believe we must continue to innovate and so remain focused on building great technology to make progress on our key growth vectors, primarily international expansion and expanding the age demographic of our users.”

The company closed the March quarter with 1,054 employees, up from 651 a year earlier.

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IronSource’s Supersonic launches LiveGames publishing service for indies

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IronSource's Supersonic launches LiveGames publishing service for indies

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Mobile monetization firm IronSource said its Supersonic Studios division has launched LiveGames, a self-service way for indie game developers to manage mobile games and their live services (such as tournaments or updates).

This is for Supersonic publishing solution, which IronSource launched more than a year ago. The announcement comes after it announced that it plans to go public via a special purpose acquisition company (SPAC) at an $11.1 billion valuation.

The product offers developers who publish their mobile games with Supersonic access to game management and full visibility and transparency into in-game metrics that enable them to better manage and grow their published games.

Nadav Ashkenazy, the general manager of Supersonic Studios, said in an interview with GamesBeat that the goal is to make publishing tools accessible to indie developers so they can get their games off the ground. It helps with the “growth loop,” after a game reaches a large scale and then needs attention in terms of improving numbers, such as the average playtime per user.

“After you scale a game globally, everything gets more complicated,” Ashkenazy said. “For average playtime per user, we give you a snapshot for that.”

The idea is to support developers as independent companies by productizing what is otherwise a manual process. It also adds some important transparency for developers that they normally can’t get out of game publishers, said Omer Kaplan, the chief revenue officer at IronSource, in an interview with GamesBeat.

“Historically, publishing is a black box,” Kaplan said. “A developer’s game meets retention goals. Then a publisher handles growth and gives a revenue share. We make everything transparent. We have complete transparency for the developers using our publishing solution on the IronSource platform.”

Several rival products in the market help developers test the performance and marketability of their prototypes, with IronSource launching its self-serve testing product for Supersonic developers in 2020. However, one of the biggest challenges comes once a game has been published, since many of the insights relating to a game and its performance are not commonly visible to the developer, limiting the ability to understand, test, iterate and improve for the long term.

Above: IronSource’s LiveGames helps studios manage their game data.

Image Credit: IronSource

With Supersonic, IronSource has focused on helping game companies become better developers, rather than treat each game as a standalone unit.

Through LiveGames, developers will have access to data such as daily, monthly, and annual profit for each of their published games; advanced analytics including retention, playtime, lifetime value, and ad engagement for each region and user acquisition channel; rewarded video and interstitial ad analysis; and advanced analytics from A/B tests for test comparison.

Stan Mettra, the CEO of game studio Born2play, is using LiveGames with the game StackyDash. He said in a statement this is the first time the company has so many insights into the performance of the game. That helps take away blind spots and helps the company take steps to increase revenue. About 25 studios used the LiveGames service in alpha testing and they’re now ready to start using the product.

“We’re encouraging the developers to remain independent,” Kaplan said.

Tel Aviv, Israel-based IronSource has previously said it would raise $2.3 billion in cash proceeds for both shareholders and the company itself through the transactions, which includes both the proceeds from the SPAC (a faster way of going public compared to an initial public offering) and an additional private investment known as a PIPE, or private investment in a public equity. SPACs have become a popular way for fast-moving companies to go public without all the hassle of a traditional IPO. Regulators have come up with more rules to govern SPACs, but the idea is to raise money faster.

IronSource said it recorded 2020 revenue of $332 million and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $104 million. IronSource said its monetization platform is designed to enable any app or game developer to turn their app into a scalable, successful business by helping them to monetize and analyze their app and grow and engage their users through multiple channels, including unique on-device distribution through partnerships with telecom operators such as Orange and a device makers such as Samsung.

In 2020, IronSource said 94% of its revenues came from 291 customers with more than $100,000 of annual revenue, a dollar-based net expansion rate of 149%.

GamesBeat

GamesBeat’s creed when covering the game industry is “where passion meets business.” What does this mean? We want to tell you how the news matters to you — not just as a decision-maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn about the industry and enjoy engaging with it.

How will you do that? Membership includes access to:

  • Newsletters, such as DeanBeat
  • The wonderful, educational, and fun speakers at our events
  • Networking opportunities
  • Special members-only interviews, chats, and “open office” events with GamesBeat staff
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