TIBCO’s Vivek Ranadivé on the “Death of Science,” the Rise of Pattern Recognition, and the Power of Data in Basketball

8/10/11Follow @wroush

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use TIBCO’s cybersecurity platform, which doesn’t try to build a bigger lock but looks for suspicious activity. If A, B, and C happen, it knows there is a bad guy in the neighborhood. This is a fundamentally different way of thinking; it says that the information exists, and what you have to do is connect A, B, and C to find out what happens next and avoid terrorism, financial crises, pandemics.

I feel this idea is coming into its own, because there is more and more information available every day. I wrote a paper recently about how the Federal Reserve should be run. Why do you have a bunch of old fogeys going through reports and, six months after the fact, making an adjustment in interest rates? Why not make tiny constant adjustments? You don’t turn on the heater in your house once every three months; if you did you would always underheat or overheat the house. This is why the Federal Reserve has had only one soft landing [after a recession] since World War II. If I had that kind of track record as a CEO, I would have been fired a long time ago.

The data is available. We can see how many cars are being sold, how many houses, what merchandise is going where. All of that information is beginning to be available in real time. So that is an agenda we are driving hard.

X: Is this idea that “science is dead” one of the themes in your book?

VR: Yes, I am continuing to drive this agenda in my book. If you can get just a little of the right information just a little bit beforehand, you can make a big difference. I collaborated with Kevin Maney on this book. He is of the mindset that people who can do that kind of pattern recognition in their heads succeed. It’s like Wayne Gretzky’s famous quote about skating to where the puck is going to be. Whether you are looking at a great CEO, a venture capitalist, or an athlete, that pattern recognition theme emerges. In parallel, I was thinking about how you make companies and governments more successful. It turns out to be the same thing, so we collaborated on this book.

X: A big part of your message is that TIBCO’s software can actually do this dot-connecting that you’re talking about, this pattern recognition. Can you give me a real-world example?

VR: Look at Reliance, the largest telephone company in India. They add four to five million customers every month, but they also lose 1.5 million every month. It’s the world’s most competitive telco market. You can spend hundreds of millions of dollars on twentienth-century database technology from Oracle and Salesforce and you won’t solve the problem—you know that five million will sign on and a million and a half will sign off. With TIBCO, you can move from looking at historical transactions to looking at real-time events. You have 50 million users and every time one of them makes a call, it creates a fingerprint on the network. When a call is dropped, that’s a fingerprint. Well, it turns out that if you drop six calls in any 24-hour period, the customer is going to switch carriers. With our infrastructure, we pick up every event, and we provide an alert that says, “After the fifth dropped call, give him free SMS messages.” Problem solved.

This applies everywhere. In retailing, we want to make you an offer before you leave the aisle, not six months after you leave the store. We know that if you buy garden fertilizer, there is a 90 percent chance you will also buy seeds, and a 40 percent chance you will also buy garden furniture. Furniture is a big-ticket item, so before you leave the aisle we will send an offer to your mobile.

X: There still have to be human analysts in the loop to spot these kinds of patterns, right? You’re not saying that the software itself can detect them.

VR: We have a visual analytics tool called Spotfire that makes these connections pop out. I’m using it to manage my basketball team. I can see that there are some people who … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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