[Michiaki Tanaka - View]
Unexpected B-to-B Tech Trends Produced by Privacy Protection

Tanaka: I think there are three main points.

First, they focus on the end-user customer experience. Second, they have formed an ecosystem of peers and built a platform. Third, their PDCA (Plan-Do-Check-Act) execution is extremely fast, even among large-sized companies. No matter how large the GAFA companies grow, their management speed has not slowed down.

In the B-to-B tech industry, the first point, customer experience, is most likely to be overlooked. B-to-B companies tend not to focus too much on end users because they are the customers of their customers, but without the success of end users, B-to-B companies cannot be successful.

I think one of the reasons why Amazon’s AWS cloud is successful is that Amazon itself is a user of cloud services, and the company designs AWS based on its understanding of the needs of end users.

I visit CES (Consumer Electronics Show) which is held in Las Vegas every year for research.

As its name suggests, it was originally an exhibition of consumer electronics. However, as of several years ago, it has become a place where the world’s leading companies show off their cutting-edge technologies, regardless of whether they are business-to-consumer or business-to-business companies. So, we can learn a lot from going there.

The trend that struck me at CES this year was the arrival of the “age of privacy.”

In recent years, regulatory action on the use of personal data has been accelerating in the EU, but the U.S. is also rapidly moving toward privacy, partly because of privacy violations on Facebook.

In California, the California Consumer Privacy Act (CCPA), which applies to all businesses, went into effect on January 1, 2020. The scope of the new act is broader than that of the Personal Information Protection Act of Japan and carries heavier penalties for violations.

Under these circumstances, the most high-profile session at CES this year was a roundtable session among chief privacy officers (CPOs).

The CPO of Facebook, which has been at the center of privacy issues, and the CPO of Apple, which normally doesn’t show up at these exhibitions, attended the roundtable. The roundtable was also attended by the commissioner of the Federal Trade Commission (FTC), which is equivalent to Japan’s Fair Trade Commission. This is why the roundtable attracted a lot of attention.

In the future, Internet services will be evaluated based on attitudes and efforts to protect the privacy of end users. That’s why the CPOs of renowned companies attended the roundtable to promote their efforts, and the session attracted a large audience of people who were keen to hear what they had to say.

I think that Apple is the most pro-privacy company in GAFA, or among the world’s top players. However, the CES roundtable highlighted the fact that even Apple’s efforts are not enough. I got the strong feeling that the world is beginning to demand an even higher level of privacy.

I feel a sense of crisis about this in Japan. The situation in Japan is very different from the situation in the U.S., and information banks have finally become a topic of conversation. In the first place, Japan’s use of data is behind other countries, and it is undeniable that Japan lags behind the U.S. in terms of privacy values and relevant laws and regulations.

Edge computers, and their component modules, will get even more attention.

Apple keeps your iPhone data on your iPhone as much as possible and doesn’t transfer it to the cloud. That’s because Apple doesn’t want to bring personal data into the company.

Edge computers are computers owned by users, such as smartphones and personal computers, and edge computing, a derivative of the term, means processing data on the user’s computer. It is attracting attention as a technique to eliminate the load and communication delay on higher systems such as clouds and servers, but I think the need will increase from the viewpoint of privacy.

Yes. If a company doesn’t collect data, it can’t invade users’ privacy. Businesses will have more digital contact points with users and it will become easier for businesses to access users’ data. It’s a valuable asset for satisfying users’ needs, but it could also become a risk if it is misused.

I think the demand for data processing on the edge side will increase, so semiconductors for AI are promising. While NVIDIA and Intel have taken the lead globally, service players like Apple, Google and Amazon are starting to build their own chips for AI. Even in the field of semiconductors, we cannot take our eyes off GAFA.

And the demand for memory will increase. This is basically a commoditized space, but as a differentiator, there are promising fields such as AI, IoT, automation, edge computing and 5G. Memory manufacturers will be able to make their presence felt if they can deliver products that fit these growing segments.

In addition, the speed of access to memory is becoming a bottleneck in overall processing amid the growing demand for greater computing power. So an increase in access speed is another factor for overcoming the competition.

In the U.S., use cases are said to be the key to technology. We might say that the growth strategy to realize KIOXIA’s mission is to form an open platform, together with players who can show use cases of memory, including experiences.

It is interesting that a company that has been in charge of infrastructure “points” in semiconductors has focused its mission on people in memory, and I think it’s an extremely good fit for this time in history. It’s a tall hurdle, but I hope to see good results from them. I think it’s a promising mission.

When it comes to memories and experiences, you have to think about what kind of experience value you will provide to end users, so I think it will be difficult without a truly customer centric perspective. I think KIOXIA’s mission is a sign of that determination.

The content and profile are current as of the time of the interview (March 2020).