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Transforming the energy industry with AI

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For oil and gas companies, digital transformation is a priority—not only as a way to modernize the enterprise, but also to secure the entire energy ecosystem. With that lens, the urgency of applying artificial intelligence (AI) and machine learning capabilities for optimization and cybersecurity becomes clear, especially as threat actors increasingly target connected devices and operating systems, putting the oil and gas industry in collective danger. The year-over-year explosion in industry-specific attacks underscores the need for meaningful advancements and maturity in cybersecurity programs.

However, most companies don’t have the resources to implement sophisticated AI programs to stay secure and advance digital capabilities on their own. Irrespective of size, available budget, and in-house personnel, all energy companies must manage operations and security fundamentals to ensure they have visibility and monitoring across powerful digital tools to remain resilient and competitive. The achievement of that goal is much more likely in partnership with the right experts.

MIT Technology Review Insights, in association with Siemens Energy, spoke to more than a dozen information technology (IT) and cybersecurity executives at oil and gas companies worldwide to gain insight about how AI is affecting their digital transformation and cybersecurity strategies in oil and gas operating environments. Here are the key findings:

  • Oil and gas companies are under pressure to adapt to dramatic changes in the global business environment. The coronavirus pandemic dealt a stunning blow to the global economy in 2020, contributing to an extended trend of lower prices and heightening the value of increased efficiency to compensate for market pressures. Companies are now forced to operate in a business climate that necessitates remote working, with the added pressure to manage the environmental impact of operations growing ever stronger. These combined factors are pushing oil and gas companies to pivot to new, streamlined ways of working, making digital technology adoption critical.
  • As oil and gas companies digitalize, the risk of cyberattacks increases, as do opportunities for AI. Companies are adding digital technology for improved productivity, operational efficiency, and security. They’re collecting and analyzing data, connecting equipment to the internet of things, and tapping cutting-edge technologies to improve planning and increase profits, as well as to detect and mitigate threats. At the same time, the industry’s collective digital transformation is widening the surface for cybercriminals to attack. IT is under threat, as is operational technology (OT)—the computing and communications systems that manage and control equipment and industrial operations.
  • Cybersecurity must be at the core of every aspect of companies’ digital transformation strategies. The implementation of new technologies affects interdependent business and operational functions and underlying IT infrastructure. That reality calls for oil and gas companies to shift to a risk management mindset. This includes designing projects and systems within a cybersecurity risk framework that enforces companywide policies and controls. Most important, they now need to access and deploy state-of-the-art cybersecurity tools powered by AI and machine learning to stay ahead of attackers.
  • AI is optimizing and securing energy assets and IT networks for increased monitoring and visibility. Advancements in digital applications in industrial operating environments are helping improve efficiency and security, detecting machine-speed attacks amidst the complexity of the rapidly digitalizing operating environments.
  • Oil and gas companies look to external partners to guard against growing cyberthreats. Many companies have insufficient cybersecurity resources to meet their challenges head-on. “We are in a race against the speed of the attackers,” Repsol Chief Information Officer Javier García Quintela explains in the report. “We can’t provide all the cybersecurity capabilities we need from inside.” To move quickly and address their vulnerabilities, companies can find partners that can provide expertise and support as the threat environment expands.

Cybersecurity, AI, and digitalization

Energy sector organizations are presented with a major opportunity to deploy AI and build out a data strategy that optimizes production and uncovers new business models, as well as secure operational technology. Oil and gas companies are faced with unprecedented uncertainty—depressed oil and gas prices due to the coronavirus pandemic, a multiyear glut in the market, and the drive to go green—and many are making a rapid transition to digitalization as a matter of survival. From moving to the cloud to sharing algorithms, the oil and gas industry is showing there is robust opportunity for organizations to evolve with technological changes.

In the oil and gas industry, the digital revolution has enabled companies to connect physical energy assets with hardware control systems and software programs, which improves operational efficiency, reduces costs, and cuts emissions. This trend is due to the convergence of energy assets connected to OT systems, which manage, monitor, and control energy assets and critical infrastructure, and IT networks that companies use to optimize data across their corporate environments.

With billions of OT and IT data points captured from physical assets each day, oil and gas companies are now turning to built-for-purpose AI tools to provide visibility and monitoring across their industrial operating environments—both to make technologies and operations more efficient, and for protection against cyberattacks in an expanded threat landscape. Because energy companies’ business models rely on the convergence of OT and IT data, companies see AI as an important tool to gain visibility into their digital ecosystems and understand the context of their operating environments. Enterprises that build cyber-first digital deployments similarly have to accommodate emerging technologies, such as AI and machine learning, but spend less time on strategic realignment or change management.

Importantly, for oil and gas companies, AI, which may have once been reserved for specialized applications, is now optimizing everyday operations and providing critical cybersecurity defense for OT assets. Leo Simonovich, vice president and global head of industrial cyber and digital security at Siemens Energy, argues, “Oil and gas companies are becoming digital companies, and there shouldn’t be a trade-off between security and digitalization.” Therefore, Simonovich continues, “security needs to be part of the digital strategy, and security needs to scale with digitalization.”

To navigate today’s volatile business landscape, oil and gas companies need to simultaneously identify optimization opportunities and cybersecurity gaps in their digitalization strategies. That means building AI and cybersecurity into digital deployments from the ground up, not bolting them on afterward.

Download the full report.

This content was produced by Insights, the custom content arm of MIT Technology Review. It was not written by MIT Technology Review’s editorial staff.

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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Freemium isn’t a trend — it’s the future of SaaS

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As the COVID-19 lockdowns cascaded around the world last spring, companies large and small saw demand slow to a halt seemingly overnight. Enterprises weren’t comfortable making big, long-term commitments when they had no clue what the future would hold.

Innovative SaaS companies responded quickly by making their products available for free or at a steep discount to boost demand.

While Zoom gets all the attention, there were hundreds of free SaaS tools to help folks through the pandemic. Pluralsight ran a #FreeApril campaign, offering free access to its platform for all of April. Cloudflare made its Teams product free from March until September 1, 2020. GitHub went free for teams in April and slashed the price of its paid Team plan.

A selection of new free, free trial and low-priced offerings from leading SaaS companies. Image Credits: Kyle Poyar/OpenView.

The free products were aimed squarely at end users — whether it be a developer, individual marketer, sales rep or someone else at the edge of an organization. These end users were stuck at home during the pandemic, yet they desperately needed software to power their working lives.

End users prefer to do the vast majority of their research online before ever talking to a sales rep, making free products the ideal way to reach them.

End users prefer to do the vast majority of their research online before ever talking to a sales rep, making free products the ideal way to reach them. Many end users want to jump straight into a product, no hassle or credit card or budget approval required.

After they’ve set up an account and customized it for their workflow, end users have essentially already made a purchase decision with their time — all without ever feeling like they were in an active buying cycle.

An end user-focused free offering became an essential SaaS survival strategy in 2020.

But these free offerings didn’t go away as lockdowns loosened up. SaaS companies instead doubled down on freemium because they realized that doing so had a real and positive impact on their business. In doing so, they busted the outdated myths that have held 82% of SaaS companies back from offering their own free plan.

Myth: A free offering will cannibalize paying customers

GoDaddy is a digital behemoth, known for being a ’90s-era pioneer in web domains as well as for their controversial Super Bowl ads. The company has steadily diversified into business software, now generating roughly $700 million in ARR from its business applications segment and reaching millions of paying customers. There are very few businesses that would see greater potential revenue cannibalization from launching a free product than GoDaddy.

But GoDaddy didn’t let fear stop them from testing freemium when lockdowns set in. Freemium started out as a small-scale experiment in spring 2020 for the websites and marketing product. GoDaddy has since increased the experiment to 50% of U.S. website traffic, with plans to scale to 100% of U.S. traffic and open availability to other markets in 2021.

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Metafy adds $5.5M to its seed round as the market for games coaching grows

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This morning Metafy, a distributed startup building a marketplace to match gamers with instructors, announced that it has closed an additional $5.5 million to its $3.15 million seed round. Call it a seed-2, seed-extension or merely a baby Series A; Forerunner Ventures, DCM and Seven Seven Six led the round as a trio.

Metafy’s model is catching on with its market. According to its CEO Josh Fabian, the company has grown from incorporation to gross merchandise volume (GMV) of $76,000 in around nine months. That’s quick.

The startup is building in public, so we have its raw data to share. Via Fabian, here’s how Metafy has grown since its birth:

From the company. As a small tip, if you want the media to care about your startup’s growth rate, share like this!

When TechCrunch first caught wind of Metafy via prior seed investor M25, we presumed that it was a marketplace that was built to allow esports pros and other highly capable gamers teach esports-hopefuls get better at their chosen title. That’s not the case.

Don’t think of Metafy as a marketplace where you can hire a former professional League of Legends player to help improve your laning-phase AD carry mechanics. Though that might come in time. Today a full 0% of the company’s current GMV comes from esports titles. Instead, the company is pursuing games with strong niche followings, what Fabian described as “vibrant, loyal communities.” Like Super Smash Brothers, its leading game today in terms of GMV generated.

Why pursue those titles instead of the most competitive games? Metafy’s CEO explained that his startup has a particular take on its market — that it focuses on coaches as its core customer, over trainees. This allows the startup to focus on its mission of making coaching a full-time gig, or at least one that pays well enough to matter. By doing so, Metafy has cut its need for marketing spend, because the coaches that it onboards bring their own audience. This is where the company is targeting games with super-dedicated user bases, like Smash. They fit well into its build for coaches, onboard coaches, coaches bring their fans, GMV is generated model.

Metafy has big plans, which brings us back to its recent raise. Fabian told TechCrunch any game with a skill curve could wind up on Metafy. Think chess, poker or other games that can be played digitally. To build toward that future, Metafy decided to take on more capital so that it could grow its team.

So what does its $5.5 million unlock for the startup? Per its CEO, Metafy is currently a team of 18 with a monthly burn rate of around $80,000. He wants it to grow to 30 folks, with nearly all of its new hires going into its product org, broadly.

TechCrunch’s perspective is that gaming is not becoming mainstream, but that it has already done so. Building for the gaming world, then, makes good sense, as tools like Metafy won’t suffer from the same boom/bust cycles that can plague game developers. Especially as the startup becomes more diversified in its title base.

Normally we’d close by noting that we’ll get back in touch with the company in a few quarters to see how it’s getting on in growth terms. But because it’s sharing that data publicly, we’ll simply keep reading. More when we have a few months’ more data to chew on.

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Snap to launch a new Creator Marketplace this month, initially focused on Lens Creators

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Snap on Wednesday announced its plan to soon launch a Creator Marketplace, which will make it easier for businesses to find and partner with Snapchat creators, including Lens creators, AR creators and later, prominent Snapchat creators known as Snap Stars. At launch, the marketplace will focus on connecting brands and AR creators for AR ads. It will then expand to support all Snap Creators by 2022.

The company had previously helped connect its creator community with advertisers through its Snapchat Storytellers program, which first launched into pilot testing in 2018 — already a late arrival to the space. However, that program’s focus was similar to Facebook’s Brand Collabs Manager, as it focused on helping businesses find Snap creators who could produce video content.

Snap’s new marketplace, meanwhile, has a broader focus in terms of connecting all sorts of creators with the Snap advertising ecosystem. This includes Lens Creators, Developers and Partners, and then later, Snap’s popular creators with public profiles.

Snap says the Creator Marketplace will open to businesses later this month to help them partner with a select group of AR Creators in Snap’s Lens Network. These creators can help businesses build AR experiences without the need for extensive creative resources, which makes access to Snap’s AR ads more accessible to businesses, including smaller businesses without in-house developer talent.

Lens creators have already found opportunity working for businesses that want to grow their Snapchat presence — even allowing some creators to quit their day jobs and just build Lenses for a living. Snap has been further investing in this area of its business, having announced in December a $3.5 million fund directed toward AR Lens creation. The company said at the time there were tens of thousands of Lens creators who had collectively made over 1.5 million Lenses to date.

Using Lenses has grown more popular, too, the company had noted, saying that more than 180 million people interact with a Snapchat Lens every day — up from 70 million daily active users of Lenses when the Lens Explorer section first launched in the app in 2018.

Now, Snap says that over 200 million Snapchat users interact with augmented reality on a daily basis, on average, out of its 280 million daily users. The majority (over 90%) of these users are 13 to 25-year-olds. In total, users are posting over 5 billion Snaps per day.

Snap says the Creator Marketplace will remain focused on connecting businesses with AR Lens Creators throughout 2021.

The following year, it will expand to include the community of professional creators and storytellers who understand the current trends and interests of the Snap user base and can help businesses with their ad campaigns. The company will not take a cut of the deals facilitated through the Marketplace, it says.

This would include the creators making content for Snap’s new TikTok rival, Spotlight, which launched in November 2020. Snap encouraged adoption of the feature by shelling out $1 million per day to creators of top videos. In March 2021, over 125 million Snapchat users watched Spotlight, it says.

Image Credits: Snapchat

Spotlight isn’t the only way Snap is challenging TikTok.

The company also on Wednesday announced it’s snagging two of TikTok’s biggest stars for its upcoming Snap Originals lineup: Charli and Dixie D’Amelio. The siblings, who have gained over 20 million follows on Snapchat this past year, will star in the series “Charli vs. Dixie.” Other new Originals will feature names like artist Megan Thee Stallion, actor Ryan Reynolds, twins and influencers Niki and Gabi DeMartino, and YouTube beauty vlogger Manny Mua, among others.

Snap’s shows were watched by over 400 million people in 2020, including 93% of the Gen Z population in the U.S., it noted.

 

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