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advantages of using trading robots on quantitative hedge funds
Advantages of Using Trading Robots on Quantitative Hedge Funds

advantages of using trading robots on quantitative hedge funds

“The time will come when no human investment manager will be able to beat the computer,” David Siegel (co-founder Two Sigma)

Generally, hedge funds engage in investing for the long term rather than day trading. In that context, the investment requires developing a macro or microeconomic thesis, understanding the market, and utilizing this perception to employ a vision, building a position, and then comes the part of holding and managing that position for a while, for a few days to often months.

A quantitative analyst explores hundreds of different pieces of information to predict an eligible output to recognize and measure attractive long-term or short-term positions in the market. In most cases, an algorithm can process more information than human analysts and keep track of that information in its database. 

Likewise, there are some significant advantages the trading robots offer for quantitative hedge funds. They are:

Unbiased Trading Ability Based on Symmetrical Analysis:

advantages of using trading robots on quantitative hedge funds 1

Hedge funds fundamentally analyze and utilize the economic and financial data to evaluate the possible attempts. In the process, the entire investment method is a research-driven process that is completely based on the symmetric orientation of strategies. 

Trading robots are insensitive, impartial about information, and perform all the trades based on substantial and symmetrical data analysis. Therefore, nothing and nothing can halt trading robots from sticking to the algorithms.

The most challenging task for a regular trader is to stay on the course of discipline and maintain the strategy without getting distracted. However, a trading robot successfully remains on the trail of discipline and strategy. 

Here the hedge fund manager plays an indispensable role because the robots may burn the fund if the market responds differently than the program. In such cases, the manager makes the call and trades manually or upgrades the instructions to the robots considering the situation. Therefore, an experienced hedge fund manager with the assistance of effective trading robots can achieve a significant return.

 

Backtesting Capacity:

One of the most significant advantages of automated trading for hedge funds is Backtesting. It’s a method of making the robot perform on historical data. Thus, you can have the performance graph of the robot in multiple previous and various market scenarios from different times. 

In general, while Backtesting, the hedge fund managers operate the trading robot through the previous market Uptrends, Downtrends, or other sideway trends. Consequently, the outcome confers the strength of managing trades in comparable environments.

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Availability of Efficient Automated Trading Solutions 

 

Nowadays, many trading platforms offer complete automated solutions for hedge funds. But among them, the MetaTrader platform provides the most sophisticated and efficient automated trading capabilities to operate large amounts of funds tirelessly. And the accretion of similar automated solutions making automated hedge fund management more accessible than ever. 

The MQL Market provides a collection of more than 13000 pre-made trading robots and solutions for legitimate automated trading! Therefore if you are looking for a trading-related solution, trading robot, or anything related to automated trading, the MQL community is there to assist you. 

If you are using the MetaTrader 5 for hedge funds, you are about to get the advantages of choosing from thousands of different trading robots for a very efficient trading solution.

Characteristics of The Most Profitable Trading Robot

Numerous trading robots have helped users earn a lot of money through automated trading. Also, some robots promise profit and a proficient gain in the market, although they end up burning out all the cash. Likewise, there are thousands of similar disappointments where the trader lost the investment depending on either fraudulent or unprofitable robots. 

Running a trading robot can be tricky as its algorithm determines the most reliable results from simultaneous events, and concurrently all trading robots claim to be better than the others. Therefore, the traders usually use specific indicators to find the most profitable trading robot for them. 

There are no such standards set yet to determine the most profitable robots. However, several functionalities determine the performance of a trading robot. Therefore, at this point, we are about to discuss a few characteristics an ideal trading robot should contain:

 

Efficient Money Management: As a trading robot remains active 24/7 and the trader not being available always creates some space for the robot to manage money. One of the most vital responsibilities of a trading robot is to take profits and stop losses. Therefore, maintaining the take-in while gaining profit and saving the account balance performing hard stop loss while losing money becomes a full-time duty for the automated system. 

AI & Machine Learning: An expert robot should be capable of identifying versatile trading market situations using Artificial intelligence. As a result, the robot would apply different patterns in trading to adapt to the sudden changes in the trading market. Whether it’s the reality or the trading market, revolution is the key to survival. 

Sustainable Profit: A proficient trading robot will provide you a regular steady flow of profit rather than forming an asymmetrical growth. Usually, a prominent trading robot should generate an 8-12% monthly gain. Somewhat robots may gain 20% or 25%, but the more steady, the better it is. 

Fewer Drawdowns: When it comes to Drawdowns, anything less than 20% is excellent for an ideal trading robot. A robust applied strategy and risk management can keep the Drawdown level between 2% to 20%. 

Bug-free Lifespan: Some very efficient trading robots often start acting differently after six months to a year. That happens because of vulnerability to bugs. Therefore, a proficient trading robot should have strong protection against bugs. Otherwise, they could take you down or even become scammers!  

User friendly: A functional trading robot should be user-friendly considering the significant numbers of beginner automated traders. 

User Reviews: The better a trading robot, the better the users speak about it. In the MQL community, there are dozens of thousands pre-made trading robots available with plenty of user comments regarding their performance and efficiency. So choose the one that comes with more positive comments.

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selecting the best big data platform
Selecting the Best Big Data Platform

selecting the best big data platform

Introduction:

This article can help companies to step into the Hadoop world, move an existing Hadoop strategy into profitability or production status.

Though they may lack functionality to which we have become accustomed, scale-out file systems that can handle modern levels of complex data are here to stay. Hadoop is the epitome of the scale-out file system. Although it has been pivoted a few times, it’s simple file system (HDFS) persists, and an extensive ecosystem has built up around it.

While there used to be little overlap between Hadoop and a relational database (RDBMS) as the choice of platform for a given workload, that has changed. Hadoop has withstood the test of time and has grown to the extent that quite a few applications originally platformed on RDBMS will be migrated to Hadoop.

Cost savings combined with the ability to execute the complete application at scale are strong motivators for adopting Hadoop. This report cuts out all the non-value-added noise about Hadoop and presents a minimum viable product (MVP) for building a Hadoop cluster for the enterprise that is both

Cost savings combined with the ability to execute the complete application at scale are strong motivators for adopting Hadoop. Inside of some organizations, the conversion to Hadoop will be like a levee breaking, with Hadoop quickly gaining internal market share. Hadoop is not just for big data anymore.

With unprecedented global contribution and interest, Spark is moving quickly to become the method of choice for data access in HDFS (as well as other storage formats). Users have demanded improved performance and Spark delivers. While the node specification is in the hands of the users, in many cases Spark provides an ideal balance between cost and performance. This clearly makes Hadoop much more than cold storage and opens it up to a multitude of processing possibilities.

Hadoop has evolved since the early days when the technology was invented to make batch-processing big data affordable and scalable. Today, with a lively community of open-source contributors and vendors innovating a plethora of tools that natively support Hadoop components, usage and data are expanding. Loading Hadoop clusters will continue to be a top job at companies far and wide.

Data leadership is a solid business strategy today and the Hadoop ecosystem is at the center of the technical response. This report will address considerations in adopting Hadoop, classify the Hadoop ecosystem vendors across the top vectors, and provide selection criteria for the enormous number of companies that have made strides in towards adopting Hadoop, yet have trepidation in making the final leap.

This article cuts out all the non-value-added noise about Hadoop and presents a minimum viable product (MVP) for building a Hadoop cluster for the enterprise that is both cost-effective and scalable. This approach gets the Hadoop cluster up and running fast and will ensure that it is scalable to the enterprise’s needs. This approach encapsulates broad enterprise knowledge and foresight borne of numerous Hadoop lifecycles through production and iterations. 

Data Management Today

Due to increasing data volume and data’s high utility, there has been an explosion of capabilities brought into use in the enterprise in the past few years. While stalwarts of our information, like the relational row-based enterprise data warehouse (EDW), remain highly supported, it is widely acknowledged that no single solution will satisfy all enterprise data management needs.

Though the cost of storage remains at its historic low, costs for keeping “all data for all time” in an EDW are still financially material to the enterprise due to the high volume of data. This is driving some systems heterogeneity as well.

This section will explore the major categories of information stores available in the market, help you make the best choices based on the workloads. 

The key to making the correct data storage selection is an understanding of workloads – current, projected and envisioned. This section will explore the major categories of information stores available in the market, help you make the best choices based on the workloads, and set up the context for the Hadoop discussion.

Data Warehouse

Relational database theory is based on the table: a collection of rows for a consistent set of columns. The rest of the relational database is in support of this basic structure. Row orientation describes the physical layout of the table as a series of rows with comprising a series of values that form the columns, which are stored in the same order for each row.

selecting the best big data platform 1

By far, most data warehouses are stored in a relational row-oriented (storage of consecutive rows, with a value for every column) database. The data warehouse has been the center of the post-operational systems universe for some time as it is the collection point for all data interesting to the post-operational world. Reports, dashboards, analytics, ad-hoc access and more are either directly supported by or served from the data warehouse. Furthermore, the data warehouse is not simply a copy of operational data; frequently, the data goes through transformation and data cleansing before landing in the data warehouse.

Over time, the data warehouse will increasingly support buffering of data through solid-state components for high-use data and other means, reuse of previously queried results, and other optimizer plans.

Multidimensional Databases

Multidimensional databases (MDBs), or cubes, are specialized structures that support access by the data’s dimensions. The information store associated with multidimensional access is often overshadowed by robust data access capabilities. However, it is the multidimensional database itself (not the access) that is the source of overhead for the organization.

If a query is paired well with the MDB (i.e., the query asks for most columns of the MDB), the MDB will outperform the relational database. Sometimes this level of response is the business requirement. However, that pairing is usually short-lived as query patterns evolve. There are more elegant approaches to meeting performance requirements today.

Columnar Data

In columnar databases, each physical structure contains all the values of one or a subset of columns of one table. This isolates columns, making the column the unit of I/O and bringing only the useful columns into a query cycle. This is a way around the all-too-common I/O bottleneck that analytical systems face today. Columnar databases also excel at avoiding the I/O bottleneck through compression.

The columnar information store has a clear ideal workload: when the queries require a small subset (of the field length, not necessarily the number of columns) of the entire row. Columnar databases show their distinction best with large row lengths and large data sets. Single-row retrievals in the columnar database will underperform those of the row-wise database, and since loading is to multiple structures, loading will take longer in a columnar database.

It must be the value of performance of that workload that differentiates the columnar database for it to make sense. Interestingly, upon further analysis, many enterprises, including most data warehouses, have substantial workloads that would perform better in a columnar database.

In-Memory Data

Storing a whole operational or analytic database in RAM as the primary persistence layer is possible. With an increasing number of cores (multi-core CPUs) becoming standard, CPUs are able to process increased data volumes in parallel. Main memory is no longer a limited resource. These systems recognize this and fully exploit main memory. Caches and layers are eliminated because the entire physical database is sitting on the motherboard and is therefore in memory all the time. I/Os are eliminated. And this has been shown to be nearly linearly scalable.

To achieve best performance, the DBMS must be engineered for in-memory data. Simply putting a traditional database in RAM has been shown to dramatically underperform an in-memory database system, especially in the area of writes. Memory is becoming the “new disk.” For cost of business (cost per megabyte retrieved per time measure), there is no comparison to other forms of data storage. The ability to achieve orders of magnitude improvement in transactional speed or value-added quality is a requirement for systems scaling to meet future demand. Hard disk drive (HDD) may eventually find its rightful spot as archive and backup storage. For now, small to midsize data workloads belong in memory when very high performance is required.

Fast Data

Data streams already exist in operational systems. From an architecture perspective, the fast data “data stream” has a very high rate of data flow and contains business value if queried in-stream. That is the value that must be captured today to pursue a data leadership strategy.

Identifying the workload for data stream processing is different than for any other information store described in this paper. Data stream processing is limited by the capabilities of the technology. The question is whether accessing the stream – or waiting until the stream hits a different information store, like a data warehouse – is more valuable. Quite often, the data flow volume is too high to store the data in a database and ever get any value out of it.

Fast data that will serve as an information store is most suitable when analysis on the data must occur immediately, without human intervention. The return on investment is quite high for those cases where companies treat fast data as an information store. 

If the stream data can be analysed while it’s still a stream, in-line, with light requirements for integration with other data, stream data analysis can be effectively added.

Cross-referencing the “last ten transactions” or the transactions “in the last five minutes” for fraud or immediate offer can pay huge dividends. If the stream data can be analysed while it’s still a stream, in-line, with light requirements for integration with other data, stream data analysis can be effectively added.

Hadoop

This all leads us to Hadoop. The next section will describe how Hadoop impacts and works with (and without) these main categories of information stores. 

Hadoop Use Patterns

Hadoop can be a specialized, analytical store for a single application, receiving data from operational systems that originate the data. The data can be unstructured data, like sensor data, clickstream data, system log data, smart grid data, electronic medical records, binary files, geolocation data or social data. Hadoop is a clear winner for unstructured batch data, which almost always tends to be high volume data — as compared to other enterprise data stores with access needs fully met by the Hadoop ecosystem today.

Hadoop can also store structured data as ‘data mart’ replacement technology. This use is more subjective and requires more careful consideration of the capabilities of the Hadoop infrastructure as it relates to performance, provisioning, functionality and cost. This pattern usually requires a proof of concept.

 Hadoop is a clear winner for unstructured batch data, which almost always tends to be high volume data — as compared to other enterprise data stores — with access needs fully met by the Hadoop ecosystem today.

Scaling is not a question for Hadoop.

Hadoop can also serve as a data lake. A data lake is a Hadoop cluster collecting point for data scientists and others who require far less refinement to data presentation than an analyst or

knowledge worker. A lake can collect data from many sources. Data can flow on to a data warehouse from the lake, at which point some refinement and cleansing of the data may be necessary.

Hadoop can also simply perform many of the data integration functions for the data warehouse with or without having any access allowed at the Hadoop cluster.

A successful Hadoop MVP means selecting a good-fit use pattern for Hadoop.

Finally, Hadoop can be an archive, collecting data off the data warehouse that is less useful due to age or other factors. Data in Hadoop remains very accessible. However, this option will create the potential for query access to multiple technical platforms, should the archive data be needed. Data virtualization and active-to-transactional data movement are useful in this, and other scenarios, and is part of modern data architecture with Hadoop.

A successful Hadoop MVP means selecting a good-fit use pattern for Hadoop.

Hadoop Ecosystem Evolution

Hadoop technology was developed in 2006 to meet the data needs of elite Silicon Valley companies which had far surpassed the budget and capacity for any RDBMS then available. The scale required was webscale, or indeterminate, large scale.

Eventually, the code for Hadoop (written in Java) was placed into open source, where it remains today.

Hadoop historically referred to a couple of open source products –- Hadoop Distributed File System (HDFS) (a derivative of the Google File System) and MapReduce –- although the Hadoop family of products continues to grow. HDFS and MapReduce were co-designed, developed and deployed to work together.

Upon adding the node, HDFS may rebalance the nodes by redistributing data to that node.

Sharding can be utilized to spread the data set to nodes across data centers, potentially all across the world, if required.

A rack is a collection of nodes, usually dozens, that are physically stored close together and are connected to a network switch. A Hadoop cluster is a collection of racks. This could be up to thousands of machines.

Hadoop data is not considered sequenced and is in 64 MB (usual), 128 MB or 256 MB block sizes (although records can span blocks) and is replicated a number of times (three is default) to ensure redundancy (instead of RAID or mirroring.) Each block is stored as a separate file in the local file system (e.g. NTFS). Hadoop programmers have no control over how HDFS works and

where it chooses to place the files. The nodes that contain data, which is well over 99% of them, are called datanodes.

Where the replicas are placed is entirely up to the NameNode. The objectives are load balancing, fast access and fault tolerance. Assuming three is the number of replicas, the first copy is written to the node creating the file. The second is written to a separate node within the same rack. This minimizes cross-network traffic. The third copy is written to a node in a different rack to support the possibility of switch failure. Nodes are fully functional computers so they handle these writes to their local disk.

Here are some other components worth having:

  • Hive – SQL-like access layer to Hadoop
  • Presto – Interactive querying of Hadoop and other platforms
  • MapReduce
  • Pig – Translator to MapReduce
  • HBase – Turns Hadoop into a NoSQL database for interactive query
  • ODBC – Access to popular access tools like Tableau, Birst, Qlik, Pentaho, Alteryx

MapReduce was developed as a tool for high-level analysts, programmers and data scientists. It is not only difficult to use, it’s disk-centric nature is irritatingly slow given that the cost of memory has recently had a steep decline. Enter Spark.

Spark allows the subsequent steps of a query to be executed in memory. While it is still necessary to specify the nodes, Spark will utilize memory for processing, yielding exponential performance gains over a MapReduce approach. Spark has proven to be the best tradeoff for most HDFS processing. 

Hadoop in the Cloud

Running your Hadoop cluster in the Cloud is part of the MVP approach. It is justifiable for some of the same reasons as running any other component of your enterprise information ecosystem in the Cloud. At the least, the cloud should be considered an extension of the data center, if not the eventual center of gravity for an enterprise data center.

Running your Hadoop cluster in the Cloud is part of the MVP approach.

Reasons for choosing the Cloud for Hadoop include, but are not limited to, the following:

  • Firing up large scale resources quickly. With Cloud providers like Amazon Web Services (AWS) you can launch a Hadoop cluster in the Cloud in half an hour or less. Hadoop cluster nodes can be allocated as Cloud instances very quickly. For example, in a recent benchmark, our firm was able to launch instances and install a three-node Hadoop cluster with basic components like HDFS, Hive, Pig, Zookeeper, and several others in less than 20 minutes, starting with launching an AWS EC2 instance through loading our first file into HDFS.
  • Dealing with highly variable resource requirements. If you are new to Hadoop, your use case is likely small at first, with the intent to scale it as data volumes and use case complexities increase. The Cloud will enable you to stand up a proof-of-concept that easily scales to an enterprise-wide solution without procuring in-house hardware.
  • Simplifying operations, administration, and cost management. Hadoop in the Cloud also greatly simplifies daily operations and administration (such as configuration and user job management) and cost management (such as billing, budgeting, and measuring ROI). Cloud providers like AWS bill monthly and only for the resources, storage, and other services your organization uses. This makes the cost of your Hadoop solution highly predictable and scalable as the business value of the solution increases.

Making the decision to take Hadoop to the Cloud is a process involving business and technology stakeholders. The process should answer questions like the following:

  • Will the Cloud provide ease of data access to developers and analysts?
  • Does the Cloud and the Hadoop distribution we choose comply with our organization’s information security policies?
  • How will Hadoop in the Cloud interweave with our enterprise’s current architecture?
  • Does our company have an actionable big data use case that could be enabled by a quick Cloud deployment that can make a big impact?

Getting Hadoop in the Cloud will require your organization to overcome some obstacles—particularly if this your first entrée into the Cloud. Whatever your big data needs and uses of information are, it is imperative to consider the value propositions of Hadoop and the Cloud. 

Hadoop Data Integration

Modern data integration tools were built in a world abounding with structured data, relational databases, and data warehouses. The big data and Hadoop paradigm shift have changed and disrupted some of the ways we derive business value from data. Unfortunately, the data integration tool landscape has lagged behind in this shift. Early adopters of big data for their enterprise architecture have only recently found some variety and choices in data integration tools and capabilities to accompany their increased data storage capabilities.

Even while reaching out to grasp all these exciting capabilities, companies still have their feet firmly planted in the old paradigm of relational, structured, OLTP systems that run their day-in-day-out business. That world is and will be around for a long time. The key then is to marry capabilities and bring these two worlds together. Data integration is that key —- to bring the transactional and master data from traditional SQL-based, relational databases and the big data from a vast array and variety of sources together.

Many data integration vendors have recognized this key and have stepped up to the plate by introducing big data and Hadoop capabilities to their toolsets. The idea is to give data integration specialists the ability to harness these tools just like they would the traditional sources and transformations they are used to.

 With many vendors throwing their hat in the big data arena, it will be increasingly challenging to identify and select the right/best tool. The key differentiators to watch will be the depth by which a tool leverages Hadoop and the performance of the integration jobs. 

With many vendors throwing their hat in the big data arena, it will be increasingly challenging to identify and select the right/best tool. The key differentiators to watch will be the depth by which a tool leverages Hadoop and the performance of the integration jobs. As volumes of data to be integrated expand, so too will the processing times of integration jobs. This could spell the difference between a “just-in-time” answer to a business question and a “too-little-too-late” result.

There are incomparable advantages to leveraging Spark directly through the chosen data integration tool, as opposed to through another medium (i.e., Hive), which is futile due to lack of support by even enterprise distributions of Hadoop.

Traditionally, data preparation has consumed an estimated 80% of analytic development efforts. One of the most common uses of Hadoop is to drive this analytic overhead down. Data

preparation can be accomplished through a traditional ETL process: extracting data from sources, transforming it (cleansing, normalizing, integrating) to meet requirements of the data warehouse or downstream repositories and apps, and loading it into those destinations. However, as in the relational database world, many organizations prefer ELT processes, where higher performance is achieved by performing transformations after loading. Instead of burdening the data warehouse with this processing, however, Hadoop handles the transformations. This yields high-performance, fault-tolerant, elastic processing without detracting from query speeds.

In Hadoop environments, you also need massive processing power because transformations often involve integrating very different types of data from a multitude of sources. The analyses might encompass data from ERP and CRM systems, in-memory analytic environments, and internal and external apps via APIs. You might want to blend and distill data from customer master files with clickstream data stored in clouds and social media data from your own NoSQL databases or accessed from third-party aggregation services.

Due to increasing, not decreasing, levels of safe harbor privacy restrictions, many multi-national companies will find Hadoop deployments becoming more distributed. As a result, we can expect a need to keep a level of data synchronized across the cluster.

Query patterns will eventually necessitate the use of data virtualization in addition to data integration. The SQL-on-Hadoop set of products have integrated data virtualization capability.

Hadoop Ecosystem Categories 

Hadoop Distribution

While you could download the Hadoop source tarballs from Apache yourself, the main benefit of commercial distributions for Hadoop is that they assemble the various open source projects from Apache and test and certify the countless new releases together. These are presented as a package. This saves businesses the cost of the science project of testing and assembling projects, since it will take more than HDFS and MapReduce to really get Hadoop-enabled in an enterprise.

Given version dependencies, the process of assembling the components will be very time- consuming.

Distributions provide additional connectors with availability, scalability, and reliability as other enterprise systems.

Vendors also provide additional software or enhancements to the open source software, support, consulting, and training. One area lacking for enterprises in the open source-only software is software that helps administrators configure, monitor, and manage Hadoop. Another area needed for the enterprise is in enterprise integration. Distributions provide additional connectors with availability, scalability, and reliability as other enterprise systems.

These are well covered by the major commercial distributions. Some of the vendors push their wares back into the open source en masse, while others do not. Neither approach presents a “Top 10 Mistake” if you follow the approach but be aware.

Some expenditure for a commercial distribution is worth it and part of an MVP approach.

When selecting how to deploy Hadoop for the enterprise, keep in mind the process for getting it into production. You could spend equal time developing and productionizing if you do not use a commercial distribution. You are already saving tremendous dollars in data storage by going with Hadoop (over a relational database). Some expenditure for a commercial distribution is worth it and part of an MVP approach. 

Cloud Service

An alternative to running and managing Hadoop in-house—whether on-premises or in the Cloud—is to take advantage of big data as a service. As with any as-a-service model, Hadoop as a service makes medium-to-large-scale data processing more stand-up accessible to businesses without in-house expertise or infrastructure, easier to execute, faster to realize business value, and less expensive to run. Hadoop as a service is aimed at overcoming the operational challenges of running Hadoop.

Decoupled Storage from Compute

Data is decoupled from the data platform by taking advantage of Cloud providers’ persistent low-cost storage mechanism (i.e., Amazon S3, Google Cloud Storage, and Microsoft Azure Blob Store) and data connectors to fluidly move data from passive storage to active processing and back to storage again. This way, you only pay for processing resources when they are actually processing data. When data is at rest, you are only paying for its storage, which is significantly cheaper in terms of cost per hour than a running instance—even if its CPUs are idling.

This way, you only pay for processing resources when they are actually processing data

For example, imagine you have a big data transformation job that runs once a week to turn raw data into an analysis-ready data set for a data science team. The raw data could be collected and stored on Amazon S3 until it’s time to be processed. Over the weekend, a Hadoop cluster of EC2 instances is launched from a pre-configured image. That cluster takes the data from S3, runs its transformation jobs, and puts the resultant dataset back on S3 where it awaits the data science team until Monday morning. The Hadoop cluster goes down and terminates once the last byte is transferred to S3. You, as the big data program director, only pay for the Hadoop cluster while it is running its assigned workload and no more!

Automated Spot Instant Management

Hadoop workloads can take advantage of a unique feature that can significantly reduce costs—bidding for Cloud services. Just like any commodity market, Cloud providers, like AWS, offer their computing power based on the supply and demand of their resources. During periods of time when supply (available resources) is high and demand is low, Cloud resources can be procured on the spot at much cheaper prices than quoted instance pricing. AWS calls these spot instances. Spot instances let you bid on unused Amazon EC2 instances—essentially allowing you to name your own price for computing resources! To obtain a spot instance, you bid your price, and when the market price drops below your specified price, your instance launches. You get to keep running at that price until you terminate the spot instance or the market price rises above your price.

While bidding for Cloud resources offers a significant cost savings opportunity, therein lies a problem. Bidding for resources is a completely manual process—requiring you to constantly monitor the spot market price and adjust your price accordingly to get the resources you need when you need them. Most Hadoop program managers can’t sit and wait for the “right price.” It’s actually quite difficult to bid on spot instances and constantly monitor spot market prices to try to get the best price.

Hadoop Data Movement

Data architect and integration professionals are well versed in the methods of moving and replicating data around and within a conventional information ecosystem. They also know the inherent value of having powerful and robust data integration tools for change data capture, ETL, and ELT to populate analytical databases and data warehouses. Those conventional tools work well within the traditional on-premises environments with which we are all familiar.

However, what does data movement look like in the big data and hybrid on-premises and cloud architectures of today? With blended architecture, the Cloud, and the ability to scale with Hadoop, it is imperative that you have the capability to manage the necessary movement and replication of data quickly and easily. Also, most enterprises’ platform landscapes are changing and evolving rapidly. Analytical systems and Hadoop are being migrated to the Cloud, and organizations must figure out how to migrate the most important aspect—the data.

There are multiple methods to migrate data to (and from) the Cloud—depending on the use case. One use case is a one-time, massive data migration. One example of this is the use of DistCp to backup and recover a Hadoop cluster or migrate data from one Hadoop cluster to another.

DistCp is built on MapReduce, which of course is a batch-oriented tool. The problem with this is method is the poor performance and the costs. For example, if you needed to migrate 1TB of data to the cloud over a 100Mbps internet connection with 80% network utilization, it would take over 30 hours just to move the data. As an attempt to mitigate this huge time-performance lag for slower internet connections (1TB over a 1.5Mbps T1 would require 82 days!), Amazon offers a service called Snowball where the customer actually loads their data onto physical devices, called “Snowballs,” and then ship those devices to Amazon to be loaded directly onto their servers. In 2016, this seems archaic. Neither option is attractive.

Another use is the ongoing data migration from on-premises to the Cloud. One method is the use of a dedicated, direct connection to the Cloud that bypasses the ISP. Cloud providers, such as Amazon, have their own dedicated gateways that can accomplish a direct connection for minimal network latency through an iSCSI connection through the local storage gateway IP address. This is typical of the solutions out there. There are some performance benefits with this method, but in all likelihood, you will need a third party tool to manage the complexity of the data movement.

Another method is the use of a third-party migration tool to monitor for change data capture and regularly push this data up to the Cloud. Most tools in this space use periodic log-scanning and picks the data up in batches. The downside is it creates a lot of overhead. The scheduled batch data replication process requires the source system to go offline and/or be read-only during the replication process. Also, the data synchronization is one-way and the target destination must be read-only to all other users in order to avoid divergence from the original source. This makes the target Cloud source consistent…eventually. Other problems with these tools include the lack of disaster recovery (requires manual intervention) and the complexities when more than one data centers are involved.

The number one problem is, to replicate or migrate data up to (or down from) the Cloud, using any of these methods requires both the source and target to “remain still” while the data is transferred—just like you have to pause when having your photograph taken. The challenge with data migration from on-premises to the Cloud—particularly with Hadoop—is overcoming “data friction.” Data friction is caused by the batch-orientation of most tools in the arena. Furthermore, batch-orientation tends to dominate the conventional thinking in data integration spheres. For example, most data warehouse architects have fixed windows of extraction when a bulk of data is loaded from production systems to staging. This is batch thinking. In the modern, global big data era, data is always moving and changing. It is never stagnant.

If your organization needed to quickly move data to a Hadoop cluster in the Cloud and offload a workload onto it, the time-cost of replicating the needed data would be high. When “data friction” is high, a robust hybrid Cloud cannot exist.

With active-transactional, data is pumped directly to the Cloud as it is changed on-premises or vice versa, making it ideal for hybrid cloud elastic data center deployments as well as migration.

SQL on Hadoop

It’s not just how you do something that’s important; rather, it’s whether you’re doing something that matters. Your Hadoop project should not store data “just in case.” Enterprises should integrate data into Hadoop because the processing is critical to business success.

Wherever you store data, you should have a business purpose for keeping the data accessible. Data just accumulating in Hadoop, without being used, costs storage space (i.e., money) and clutters the cluster. Business purposes, however, tend to be readily apparent in modern enterprises that are clamoring for a 360-degree view of the customer made intelligently available in real time to online applications.

The best way, in MVP fashion, to provide the access to Hadoop data is from the class of tools known as SQL-on-Hadoop. With SQL-on-Hadoop, you access data in Hadoop clusters by using the standard and ubiquitous SQL language. Knowledge of APIs is not necessary.

You should grow the data science of your organization to the point that it can utilize a large amount of high-quality data for your online applications. This is the demand for the data that will be provided by Hadoop.

 The best way, in MVP fashion, to provide the access to Hadoop data is from the class of tools known as SQL-on-Hadoop. With SQL-on-Hadoop, you access data in Hadoop clusters by using the standard and ubiquitous SQL language. Knowledge of APIs is not necessary.

SQL-on-Hadoop helps ensure the ability to reach an expansive user community. With the investment in a Hadoop cluster, you do not want to limit the possibilities. Putting a SQL interface layer on top of Hadoop will expand the possibilities for user access, analytics, and application development.

There are numerous options for SQL-on-Hadoop. The original, Apache Hive, is the de facto standard. The Hive flavor of SQL is sometimes called HQL. Each of the major three Hadoop enterprise distributions discussed earlier (Hortonworks, Cloudera, and MapR) includes their own SQL-on-Hadoop engine. Hortonworks offers Hive bolstered by Tez and their own Stinger project. Cloudera includes Apache Impala with their distribution. MapR uses Apache Drill.

The list only begins there. The large vendors—IBM, Oracle, Teradata, and Hewlett-Packard each have their own SQL-on-Hadoop tools—BigSQL, Big Data SQL, Presto, and Vertica SQL On Hadoop, respectively. Other not-so-small players have offerings, like Actian Vortex and Pivotal’s Apache HAWQ. And of course, Spark proponents tout Spark SQL as the go-to choice.

Besides the vendor-backed offerings, two additional open source projects—Phoenix, a SQL engine for HBase, and Tajo, an ANSI SQL compliant data warehousing framework that manages data on top of HDFS with support for Hive via HCatalog.

Look for a complement of features to your current architecture and appetite for proofs of concept. 

Evaluation Criteria for Hadoop in the Cloud

The critical path for evaluating Hadoop in the Cloud solutions for your organizations is to set yourself on a path to take action. The need for big data is only going to get bigger and the use cases and business problems to solve will only get more varied and complex. Therefore, we leave you with the following criteria to consider as you build a business case for Hadoop in the Cloud, a key component of a Hadoop MVP implementation.

selecting the best big data platform 2

Conclusions

Data leadership must be part of company strategy today and Hadoop is a necessary part of that leadership. The use patterns Hadoop supports are many and are necessary in enterprises today. Data lakes, archiving data, unstructured batch data, data marts, data integration and other workloads can take advantage of Hadoop’s unique architecture.

The ability to fire up large scale resources quickly, deal with highly variable resource requirements and simplify operations, administration and cost management make the cloud a natural fit for Hadoop. It is part of a minimum viable product (MVP) approach to Hadoop.

Selecting a cloud service, or big data as a service, should put you in the best position for long- term, low total cost of ownership.

The challenge with data migration from on-premises to the Cloud—particularly with Hadoop—is overcoming “data friction”. There are multiple methods to migrate data to (and from) the Cloud—depending on the use case. WANdisco Fusion sets up your MVP for the inevitable data movement (migration and replication) required in a heterogeneous modern enterprise data architecture.

Finally, round out your use case, distribution, cloud service and data movement selections with SQL-on-Hadoop to provide access to the data assets and enable a MVP of Hadoop to accede to its role in data leadership. 

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the top 5 reasons why most ai projects fail
The Top 5 Reasons Why Most AI Projects Fail

the top 5 reasons why most ai projects fail

Due to the pandemic, most businesses are increasing their investments in AI. Organizations have accelerated their AI efforts to ensure their business is not majorly affected by the current pandemic.

Though the implementation is a positive development in terms of AI adoption, organizations need to be aware of the challenges in adopting AI. Building an AI system is not a simple task. It comes with challenges at every stage.

Related Reading: A Step By Step Guide To AI Model Development

Even though you build an AI project, there are high chances of it failing upon deployment, which can be attributed to numerous reasons. This blog post will cover the top five reasons on why AI projects fail and mention the solutions for a successful AI project implementation.

1. Improper Strategic Approach

There are two facets to a strategic approach. The first is being over-ambitious, and the second is the lack of a business approach.

When it comes to adopting an AI project, most organizations tend to start with a large-scale problem. One of the main reasons is the false belief people have about AI. 

Currently, AI is overhyped but under-delivered. Most people believe AI to be that advanced piece of technology that is nothing short of magic. Though AI is potent enough to be such a technology, it is still at a very nascent stage. 

Furthermore, adopting AI in an organization is a considerable investment of time, money, resources, and people. Since companies make that huge investment, they also expect higher returns.

But as mentioned before, AI is still too narrow to drive such returns in one go. Does that mean you cannot get a positive ROI? Not at all.

AI adoption is a step-by-step process. Every AI project you build is a step forward to making AI the core of your business. So start with smaller projects like gauging demand for your products, predicting credit score, personalizing marketing, etc. As you build more projects, your AI will better understand your needs (with all the data), and you will start seeing much better ROI.

Moving on to the second facet of the problem – When companies decide to build an AI project, they usually see the problem statement from a technical perspective. This approach prevents them from measuring their true business success.

Companies have to start seeing a problem from a business perspective first. Ask yourself the following questions:

  • What business problem are you trying to solve?
  • What are the metrics that define success?

Once you have answered these questions, move on to decide what technology you would use to solve the problem. Remember, AI is an ocean that covers multiple technologies like machine learning, neural networks, deep learning, computer vision, and so much more.

Understand which technology would be most suitable for the problem at hand and then start building an AI solution.

2. Lack of Good Talent 

Most people forget that AI is a tool created by humans. Of course, data is the crucial ingredient, but humans are the ones who use it to develop AI. And currently, there is a shortage of talented professionals who can build effective AI systems.

In its Emerging Jobs 2020 report, LinkedIn ranked AI specialists in the first position. However, the supply does not seem to match the demand yet.

The shortage dips further when you consider quality and experience as well. Mastering AI or becoming an expert in AI takes years. Before becoming an AI expert, one needs to master the various underlying skills like statistics, mathematics, and programming. Also, AI practitioners have to constantly keep updating themselves as AI is a continuously evolving field.

According to Gartner, 56% of the organizations surveyed reported a lack of skills as the main reason for failing to develop successful AI projects. 

Organizations can solve this problem in two ways. 

First, they need to identify talent within their workforce and start upskilling them. They can gradually extend this process to the rest of the organization.

Second, organizations need to partner with universities to bridge the gap between academia and the industry. With a clear picture of the skills needed and the right resources, universities can train students with the skills required in the industry.

While pedagogical changes will boost AI upskilling, it is still a long term approach. What about now? There is a third approach which is slowly gaining traction, which is, dedicated AI companies that have the right talent, building AI models and offering AI-as-a-Service. 

3. Data Quality and Quantity

Having addressed the issue of the people who make AI, let’s now talk about the ingredient that makes this technology possible – data.

AI, as a concept, was first introduced in the decade of 1950. But at that time, the researchers did not have enough data to bring the technology to reality. However, in the last decade, the situation has drastically changed.

With technology and gadgets being a close companion of humans, most gadgets and software have garnered the ability to collect zillions of data. And with this rising data collection, AI started gaining traction.

But then a new problem arose – the quality of the data.

Data is one of the two most crucial requirements to create an effective AI system. Though companies had started to collect tons of data, issues like unwanted data, unstructured data persisted.

Data usually gets collected in multiple forms – structured, unstructured or semi structured. It is usually unorganized and contains various parameters that may or may not be essential for your AI project specifically.

For example, if you are building a recommendation system, you would want to avoid collecting unnecessary data like mail id, customer picture, phone number, etc. This data would not help you solve the problem of understanding your customer preferences. Worse, you might face the issue of overfitting where there is a ton of unnecessary data.

In the above example, if you had data like web browsing history, previous purchases, interests, location, then your AI system would give you much better results.

To solve the data issue, consider involving all the stakeholders before starting an AI project – the business heads, data analysts, data scientists, ML engineers, IT analysts, and DevOps engineers. You can then have a clear picture of what data is required to build the AI model, what quantity, and what form. Once you have an understanding of this, you can clean and transform your data as required.

Also, while you prepare the data, make sure you keep aside a part of it as testing data to ensure the AI you build works as you intend it to work.

4. Lack of AI Awareness in Employees

Most people believe artificial intelligence would replace them in their jobs. However, this is certainly not the case. 

As companies adopt AI, they will also have to concurrently educate their workforce on how AI is an “augmentor”. This education which is rightly termed as “data literacy” is crucial if you want your organization to have an enterprise-wide AI adoption.

Data literacy needs to be prioritized for two reasons

  1. To ensure that your workforce(especially non-tech) are aware of what AI does and the capacity in which it helps them
  2. To ensure that upon successful education, they do not blindly rely on AI for the decisions it makes

There have been scenarios where even though companies have deployed AI in their day-to-day operations, the workforce has rejected it. This indicates that employees have trust issues with the technology.

Alternatively, you do not want your workforce to blindly accept all the decisions made by your AI. You need to ensure the decisions are justified and make sense.

Due to these reasons, as and how your organization starts adopting AI, you will also have to start educating your workforce on the technology. Promote AI as a technology that takes up tasks and not jobs. Let your workforce understand that the sole purpose of AI is to free up human time so that they can focus on complex problems. It is pertinent that people understand AI as not just artificial intelligence but augmented intelligence.

5. Post-Deployment Governance and Monitoring

Consider you bought a car. It has all the necessary features that you wanted. It drives smoothly, helps you get to work in a matter of minutes, and even customizes the ambiance as per your preferences. But does that mean it does not need any attention or maintenance from your end? Absolutely not.

Similarly, for simplicity, building and deploying an AI is like having a car. You will also have to maintain the AI after deployment. However, maintaining AI is a far bigger undertaking than maintaining a vehicle.

AI systems make myriad decisions based on the data that are fed to them. If people cannot understand how an AI arrives at a particular decision, then that AI system can be labeled as a “black box AI.”

Ensuring your AI does not turn into a black box is crucial, especially when it makes decisions like processing loans, suggesting medical treatments, accepting applications for universities, and so on. Many governments are realizing the black box issue and are considering regulating the technologies. Even if they are not bound legally, it becomes an ethical responsibility of the developers to ensure AI is fair and just.

An additional challenge here is the dynamic nature of data and the business scenario. It is unlikely for data to remain static throughout the lifetime of an AI project. As the data changes, the AI also needs to be recalibrated to ensure it does not drift from its performance.

This process of recalibrating AI systems is mostly similar to building an all-new model. And like any AI project, it takes time and resources. For this purpose, most companies try to stretch their models for a long time without “maintaining” them and accommodating the business changes in the model. But you cannot time when the model will start drifting and lead to unnecessary implications.

To address these problems, organizations will have to constantly monitor their AI systems. The AI needs to be regularly updated with the changing data and business scenarios. To make this process a little less difficult, you can use an AI observability tool that helps you monitor your models and report unnecessary drifts.

AI Adoption Is A Journey

AI is a powerful technology that is changing the way we do business today. However, like every good thing, it needs time and effort to uncover and function to the best of its abilities.

As AI enablers, we recommend organizations adopt AI in a step-by-step fashion. The returns on AI investments are not linear – it compounds as you start utilizing it in your organization. Once you have specific AI use cases, you can extend the AI system to an enterprise-wide level adoption.

Interested in discussing your next AI project? Get in touch with our AI experts. 

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ai for business communication how effective is it really
AI for Business Communication: How Effective Is It Really?

ai for business communication how effective is it reallyAI for business communication.

Never heard of it?

I don’t blame you. Until now, artificial intelligence has majorly been used to streamline manufacturing, customer support, documentation, and logistics. Business communication has largely been a stronghold of humans.

But all that is poised to change now. With AI tools getting more advanced and “human-like” by the day, they are more than ready to handle your internal and external business communication single-handedly.

Don’t believe me? Check out the use cases explained in this post. I’m sure you will be ready to embrace AI for business communication once you know how other businesses are taking advantage of its superhuman capabilities.

4 Ways to Use AI for Business Communication

There are many applications of AI for business communication. Check out the top four below:

1. Chatbots

A great business communication strategy focuses on providing a stellar customer experience (CX). 

 

Why so? Because CX is a priority for 80% of modern consumers, according to Salesforce’s “State of the Connected Customer” survey.
ai for business communication how effective is it really

Image via Salesforce

AI-powered chatbots can help your business deliver a memorable CX and ensure customer satisfaction. These virtual assistants can be embedded on your website, app, and other touchpoints to provide prompt and personalized service to your customers.

Let’s take a look at how AI chatbots can optimize business communication and CX.

Chatbots Are Efficient and Cost-Effective

AI enables bots to converse with multiple customers simultaneously, thus reducing customer service costs. They can handle mundane, repetitive user requests at scale, without any human intervention. The best part here is that they can respond to their messages instantly too.

Chatbots Are “Almost” Human

Chatbots seem efficient and all, but what if they mess your CX with robotic, inappropriate responses? Such “robots” are designed to catch and assimilate the nuances of human language by virtue of natural language processing (NLP). They can mimic humans and even use humor to pacify hassled customers. 

Chatbots Delight Users with Personalized Responses

Powered by AI, chatbots can offer hyper-personalized responses that are tailored to each user’s unique needs and interests. They draw on previous conversations and historical CRM/sales data for each user to gather insights about them. After that, it’s just a matter of joining the dots and giving contextual answers.

That’s the mechanism chatbots use to offer “intelligent” product recommendations to shoppers. It’s no wonder that chatbots are one of the most popular AI ecommerce solutions.

 

For a better sense of how such a chatbot works in the real world, check out how Bank of America’s chatbot reminds customers about pending bills, overdrafts, etc. making their lives easier. 

ai for business communication how effective is it really 1

Image via Bank of America

 

This way, it streamlines business communication for the bank and cements its customer relationships.

2. Smart Call Centers

According to BrightLocal, 60% of customers who find a business online tend to call them. That means call centers are still vital for business communication.

 

ai for business communication how effective is it really 2

Image via BrightLocal

No matter what kind of call center you choose to hire (inbound, outbound, or virtual), AI can augment the performance of your call centers.in four distinct ways:

  • Data capturing: Virtual call centers use AI-powered VoIP phone services that integrate seamlessly with your CRM systems to fetch user data faster, thus reducing response delay.
  • Customer service: After assimilating the above data, AI algorithms help craft personalized responses or transfer tickets to live agents, according to issue severity.
  • Forecasting customer support trends: Using predictive analysis, AI tools can decipher the kind of support (manual/live) that can deliver the highest satisfaction.
  • Sentiment analysis: AI chatbots can be trained to decipher the emotional state of callers over live customer calls and on a scale – something that wasn’t possible earlier.

In a nutshell, powering your call centers with AI can ensure quick issue resolution, which, in turn, reduces your customer churn and labor costs.

3. Smart Ad Campaigns

If you leverage advertising for business communication, AI can help you maximize its ROI. For instance,  Albert, an AI-powered platform has helped Harley-Davidson increase their monthly lead volume by 2930%. Out of all their monthly sales, HD attributes 40% to Albert’s smart ad campaigns. 

 ai for business communication how effective is it really 3

Image via Albert 

 

Albert crafted personalized ad copy and coupled that with laser-focused ad targeting. That helped the motorcycle brand retarget lost customers and convert them into hot leads. To that end, AI tools have the potential to capture and assimilate millions of data points, which can be used to create accurate user personas for your ad targeting.

You can use AI-based editors to predict ad copy that has a good performance history with your target audience. These tools can go really granular and even optimize minute ad elements like CTA button colors. Moreover, predictive analysis can forecast ad performance and costs by analyzing historical data. They can even pinpoint bidding spots that can get maximum visibility and ROI for your ads. 

By leveraging these tools, you can effectively launch your marketing or retargeting campaigns and generate leads and sales.

4. Intelligent Meeting Schedulers 

On average, a typical office-goer attends 62 internal and external meetings per month. Meetings are unavoidable for business communication. But that doesn’t negate the fact that a lot of productive work time gets wasted in scheduling meetings. From checking attendee availability to sending meeting updates, everything consumes a lot of time and effort. 

 

AI-powered email marketing tools can help you schedule meetings over emails in seconds. They sync calendars, check attendee availability, and send scheduling updates – all without any human intervention. Plus, they have a near-zero failure or flaw rate.

There are tools like ActiveCampaign that have native integrations with AI-powered scheduling solutions. ActiveCampaign’s x.ai sends pre-meeting materials to attendees, maintains minutes of meetings, and assigns action items too. ai for business communication how effective is it really 4

Image via ActiveCampaign

 

With AI tools scheduling meetings in the background, you can focus on more cognitive tasks and get more out of your workday.

Ready to Leverage AI for Business Communication?

Business communication is the lifeblood of modern businesses. It governs how a business looks in front of its stakeholders – employees, customers, and investors. AI can optimize your business communication on all major outbound touchpoints like chatbots, call centers, ads, and meetings. 

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dsc weekly digest 7 september 2021
DSC Weekly Digest 7 September 2021
dsc weekly digest 7 september 2021

In the last year or so, I’ve been watching the emergence of a new paradigm in application development, one that is shifting the way that we not only process data but is also changing the view of what an application is.

This change necessitates a critical idea: the notion that you can represent any information as a graph of relationships. This idea goes a long way back – Database pioneer Ted Codd, alluded to graph-based data systems in the 1970s, though he felt (likely for legitimate reasons) that the technology of the time was insufficient to be able to do much with the notion.

In the early 2000s, Tim Berners-Lee explored this notion more fully with RDF and the Semantic Web, which made use of an assertion-based language as a way of building inferential knowledge graphs. This technology waxed and waned and waxed again throughout the next twenty years, but even as such systems have become part of enterprise data implementations, the relatively static nature of these relationships hampered adoption.

In the mid-2010s, Facebook released a new language called GraphQL, making it open source. GraphQL was intended to primarily to deal with the various social graphs that were at the heart of the social media giant’s products, but it also provided a generalized way of both discovering and retrieving data through a set of abstract interfaces. 

Discovery has long been a problem with Service APIs, primarily because it put the onus of how data would be structured on the provider, often with complex parameterizations. and poorly defined output sets. What’s more, any query often necessitated multiple steps to retrieve hierarchical data, reducing performance and necessitating deeply nested asynchronous calls (which ultimately necessitated the development of a whole promise infrastructure for web applications).

GraphQL, on the other hand, lets a client process retrieve the model of how information is stored in the graph and uses that to help construct a query that can then short-circuit the need for multiple calls to the server. Moreover, while a GraphQL server can take advantage of an abstract query language to write simplified queries, resolvers can also be written that can calculate assertions dynamically as well (a major limitation of RDF).

For instance, with GraphQL it is possible to pass a parameter indicating a time zone to a property and the system would then retrieve the current time in that time zone, pulled not from a database but from a function on a clock, even with everything else coming from a database. This ability to create dynamic and contextual properties (at both the atomic and structural levels) may also provide a mechanism to interact consistently with machine learning models as if they too were databases, and may, in turn, be used to simplify updating reinforcement learning-based systems in a consistent manner without the need to write complicated scripts in Python or any other language.

As GraphQL becomes more pervasive, application development will become simpler – connect to an endpoint, build a query, bind it to a web component (in React, Angular, or the emerging Web Components framework), and act upon the results. Because the GraphQL endpoint is an abstraction layer, actions get reduced to traditional CRUD operations, with the difference being that a GET operation involves passing a query construct rather than a parameterized URL, while a POST operation involves passing a mutational construct. Rather than trying to support hundreds of microservice APIs, organizations can let users connect to a single GraphQL endpoint, providing both access to data and protection against exposing potentially dangerous data, the holy grail of application developers and database managers alike.

In media res,

Kurt Cagle
Community Editor,
Data Science Central

To subscribe to the DSC Newsletter, go to Data Science Central and become a member today. It’s free! 

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technology firms are racing to make their own chips
Technology Firms Are Racing to Make Their Own Chips

technology firms are racing to make their own chips

Photo Credit: Unsplash

As programming students and data science enthusiasts, it’s interesting to know what is going on in the world of chips and the changes we are witnessing. In this article I’m going to summarize what I’ve noticed in the sector and how major technology companies are pivoting with the times.

With a global chip shortage and a new emphasis on AI chips many BigTech companies are taking chip production into their own hands. In November 2020 Apple broke its 15-year partnership with Intel. As Intel fell behind in manufacturing, Taiwan’s Taiwan Semiconductor Manufacturing Company, or TSMC, has gained in strategic importance.

In 2021 this trend is accelerating. Apple, Amazon, Facebook, Tesla and Baidu are all shunning established chip firms and bringing certain aspects of chip development in-house. China is also racing to develop its own chip supply so as to not be dependent on third parties or the U.S.

Apple’s chips are based on ARM technology as opposed to the x86 architecture that Intel’s chips use. ARM was originally designed for mobile devices and chips built with ARM designs are consistently more efficient, leading to longer battery life. 

Taiwan’s TSMC and Nvidia Gaining In Relative Importance

Meanwhile Nvidia’s new Ampere AI chip sets the bar that other companies will try to follow. Since 2020 Nvidia has also benefited from this digital transformation. And since Deep learning relies on GPU acceleration, both for training and inference, NVIDIA delivers GPU acceleration across distributed computing now — from data centers to desktops, laptops and the world’s fastest supercomputers.

For companies like TSMC and Nvidia, their market cap value has increased tremendously since these changes and the relative collapse in the manufacturing prowess of Intel and its ability to keep up. Then there is also AMD and others. According to CNBC, at this stage, none of the tech giants are looking to do all the chip development themselves. Setting up an advanced chip factory or foundry like TSMC’s in Taiwan costs around $10 billion and takes several years.

Tesla is boasting to be an AI-company in its own vein working with so much data. Each major tech company is building its own chip for its specific use cases.  These specialized and customized chips can help to reduce energy consumption for devices and products from the specific tech company. We are witnessing a chip explosion in the early 2020s, with a host of established companies and fledgling startups racing to build special-purpose chips to push the capabilities of artificial intelligence technology to a new level.

A BigTech DIY Moment in Computing

Increasingly, these companies want custom-made chips fitting their applications so it’s a BigTech DIY moment in the history of chips and computing. As major technology companies are battling in the Cloud also with AI and machine learning software for companies, specialized chips are starting to matter more.

China, which monetizes facial recognition at scale, even has specialized chip companies for that sector. Artosyn Microelectronics for instance, a Shanghai-based chipmaker, has released a new generation of AI camera chips, the AR9341. Earlier this year, Chinese chip startup Enflame released its second generation of Deep Thinking Unit (DTU), designed to process huge amounts of data to train AI systems.

BigTech and Chinese innovation is going to push AI chips to new levels in the 2020s. The Cloud, facial recognition, new NLP models and more demand for AI makes this somewhat inevitable. Vastai Technologies released its first cloud AI inference chip, which has a peak performance of 200 TOPS (INT8). To get an idea how dominant Nvidia has become even in China, in terms of AI chips, NVIDIA still dominates the Chinese market with a share of over 80 percent.

The ongoing chip shortage appears rather serious and is likely another major reason why BigTech firms are thinking twice about where they get their chips from. Also with a renewed emphasis on cybersecurity, BigTech firms want to be more careful than ever. Tesla also added hype to the AI-train bandwagon when it announced it’s building a “Dojo” chip to train artificial intelligence networks in data centers. In 1919 the automaker started producing cars with its custom AI chips that help onboard software to make decisions in response to what’s happening on the road.

As you can see, this makes the chip sector particularly dynamic in the new normal. Behind the spate of designs is the expectation that AI is the next technological gold rush, and now AI is helping to design its own chips. Google is using machine learning to help design its next generation of machine learning chips and other firms will follow. It’s somewhat ironic that Google’s own TPU (tensor processing unit) chips are now optimized for AI computation by machine learning designs.

Nor should Chinese BigTech be discounted. Baidu last month launched an AI chip that’s designed to help devices process huge amounts of data and boost computing power. Baidu said the “Kunlun 2” chip can be used in areas such as autonomous driving and that it has entered mass production. Autonomous driving companies need their own specialized chips.

The AI Chip Revolution of the 2020s

The new generation of Kunlun AI chips, using 7 nm process technology, achieved a top computational capability two-to-three times that of the previous generation. China is speeding ahead to reduce its dependence on Qualcomm and Nvidia.

Apple has invested heavily in its silicon department, including major purchases, starting with a $278 million purchase of P. A. Semi in 2008, which started the department, and most recently, $1 billion for part of Intel’s modem business in 2019. Taiwan Semiconductor Manufacturing Co. has succeeded by just focusing on production and leaving the design to other companies. Its factories have passed Intel in capabilities and it’s shaken up the entire industry.

So with the future of chips you can see many moving parts. To give you an idea on how vital Taiwan’s TSMC has become, the world’s largest chipmaker, Taiwan Semiconductor Manufacturing Company, has overtaken Chinese tech behemoth Tencent to become Asia’s most valuable firm. That’s rather surprising to many analysts and technology folk. It places Taiwan’s strategic importance in geopolitics as more critical than it appears in China’s push for territory, technology and talent.

The Era of Specialized Chips and the Chip Shortage

As far back as 2018 BigTech’s entry into AR and VR also has needed specialized chip sets. For instance Microsoft created a co-processor for its HoloLens headset (known as a Holographic Processing Unit, or HPU) that handles the information provided by HoloLens sensors. Apple’s foray into AR glasses likely has needed much the same. With AI becoming even more ubiquitous in this decade, chip supply chains are having their own revolution and everyone wants in.

As for supply chains in chip shortages, one of the biggest industries that has been hard hit is the automobile sector that doubts whether it will easily end in 2021. This may also complicate the transition plan of major car markers to EVs. Industry leaders are saying that the shortage is thought to have been exacerbated by the move to electric vehicles. Interestingly Bosch, which is the world’s largest car-parts supplier, made a bold statement. It basically said it believes semiconductor supply chains in the automotive industry are no longer fit for purpose.

The chip shortage is so severe for automakers that it’s shifting the entire industry in the race to EVs. Germany’s Volkswagen, Europe’s largest carmaker, has lost market share in China in 2021 as a result of the chip shortage. It’s not overly clear how much longer semiconductor shortages will last. Daimler CEO predicts the auto industry could struggle to source enough of them throughout next year and into 2023.

In 2021 with Advanced Micro Devices Inc. and Apple Inc. forging ahead with their own capable designs and TSMC’s more advanced production technology and Intel’s stunning lack of manufacturing execution, it’s a brave new world for the future of chips. BigTech has been making their own chips for at least the last 3 to 4 years but this year is like no other.

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what is devops and how can it give a boost to software development
What is DevOps and How can it give a Boost to Software Development?

what is devops and how can it give a boost to software development

Developing and implementing software in today’s fast-paced business environment requires the best software development techniques and solutions to ensure your customers get the best service and experience while using your software. 

what is devops and how can it give a boost to software development
According to a survey, 51% of DevOps users today apply DevOps to new and existing applications.  By 2026, its market will undergo a dynamic transition as advancements in automated software development and zero-touch automation technologies drive the DevOps tools’ demand.

The use of DevOps has been proven to help increase the efficiency of the software development process, leading to faster release cycles and ultimately better customer satisfaction with the products you are delivering.

If you’re considering adopting DevOps practices into your organization,  then take some time now to learn more about what exactly DevOps is and how it can benefit your business.

What is DevOps?

what is devops and how can it give a boost to software development 1
Adopting a DevOps culture within your organization will help you to accelerate software development. A recent Puppet survey found that companies with a mature DevOps practice have grown over four times faster than those without it. It is mainly due to their ability to experiment and implement changes quickly and easily by building more stability into each release and deploying new updates and features much more rapidly than before.

This increased deployment frequency enables organizations to capitalize on market trends or consumer demand more quickly, ensuring they remain competitive in an increasingly fast-paced marketplace.  Now, let’s dive into the reasons why DevOps is essential for software development.

The Top Benefits of Using DevOps in Software Development:

1) Improved Testing Capabilities

In addition to testing for functional bugs, there’s also a variety of non-functional testing. For example, you can test your system to ensure it’s fast and reliable at a high volume of users—no matter how many people are on your website. Using automated testing will help you scale your systems as needed.

Testing is a vital part of DevOps because its success depends so much on speed and reliability. Your platform needs to handle peak traffic with ease to be genuinely operational, which means frequent regression testing.

2) Increased Quality Products

If you’re struggling to turn software products around promptly, it may be time to adopt a new approach. Using DevOps software solutions can help you produce high-quality products quickly, cutting down on waste and costly mistakes. Even if you have your product development dialed in, these tools might still be worth considering to scale up your business operations.

Deploying even a simple change could take days or weeks under traditional development models. If someone screwed up along the way, everything had to start from scratch. With DevOps practices, once you build software from source code, you can push it out immediately without approval from any of your stakeholders. So long as it meets all relevant criteria (e.g., load tests), anyone on your team can instantly deploy any new feature they want.

3) Better Deployment Processes

When you cannot quickly push out new features and bug fixes, you might find that users aren’t even taking notice of your updates. Adding a DevOps element to your software development process can accelerate deployment and get new features to your customers sooner. It will get them more engaged with your platform, which is something we all want. 

After all, there are plenty of alternatives for them if they don’t like what you have to offer. If they start getting bored or disappointed in what you have on offer, it won’t be long before they go elsewhere—and it could be hard to win them back once they leave for greener pastures.

4) Faster Time to Market

Studies have shown a strong correlation between using DevOps software solutions and getting to market faster. DevOps aims to promote cooperation among developers, sysadmins, testers, and other IT professionals, resulting in an accelerated time-to-market for new products.

Nowadays, every business wants to get to market faster. Using DevOps software solutions is one way to get there. Instead of having each group work independently (as they would with traditional development processes), working together means information gets passed back and forth quickly so things can be changed as soon as they’re discovered. For example, if testing reveals bugs, it’s easier to fix them before deploying than after.

5) Better Security

Security is one of those things that can be hard to measure. It’s also one of those things people tend to only talk about when something wrong happens. Despite all that, it’s essential—especially as we move toward a cloud-based future. Given all that, using DevOps principles and tools will improve your organization’s security and harden your systems and applications against vulnerabilities and weaknesses. That goes for both your custom solutions and any off-the-shelf software you use. Once you start looking at things from a DevOps standpoint, improving security will become easier until someone launches another round of attacks.

6) Streamlined Operations Team Management

One of my favorite things about DevOps is that it forces teams to get creative about optimizing their customer relationships. In a traditional software development cycle, there’s typically a handoff from marketing and sales to development. It works well for some projects—but can cause problems on more complex initiatives.

When DevOps is included from day one, they develop a symbiotic relationship where team members depend on one another throughout every phase of product development. Not only does including your whole team ensure you have access to all relevant perspectives upfront, but it also saves time. It allows your engineers to continue collaborating through delivery instead of becoming siloed when one passes off work to another group.

7) Optimized Customer Relationships

The conventional way of interacting with customers is changing. Businesses are more and more moving towards adopting customer relationship management (CRM) solutions for better managing and monitoring relations with customers. As a result, they can cater to their clients on a one-to-one basis and provide them with an experience that is personalized and fast. This makes it all that much easier to keep your existing clients happy and find new ones.

Companies who use CRM will also make better business decisions thanks to having detailed information about their products or services. There are opportunities for growth or areas where things need improvement. Such systems provide businesses with invaluable data and help save time while making data easy to retrieve at any given point in time.

8) No Fear of Change

Doing software development as a service will help you save money and time by ensuring your project runs smoothly. Since you can easily outsource, you’ll never be short of developers when you need them. And, since freelancers work with many clients at once, they tend to handle their tasks more efficiently than those who do it as a full-time job. They also have no fear of change—meaning that if your company’s new direction requires a different approach from what was initially planned, they won’t complain or put up roadblocks.

9) Improved Communication Between Teams & Stakeholders

The most crucial benefit of DevOps software solutions is that it saves money. It is an efficient way to gain project delivery speed while saving time, money, and effort. It allows businesses to be agile so that they can meet their clients’ demands quickly. It also means developers are more likely to produce better-quality code more quickly, which will save you loads of time later on down the line when looking for someone to maintain your product or service.

A company that knows how to use DevOps can outdo its competitors easily due to lower costs. Another great advantage of hiring talented staff like skilled professionals instead of generalists is that everyone becomes an expert at something specific; not many companies can boast of having staff experts in marketing, development, management, etc. If they do have staff experts at one thing, then chances are there isn’t anyone who knows how to handle things outside their field of expertise.

10) Costs Less Money & Saves Time

Before a company implements a DevOps strategy, it has first to know its current software development process. Then it can more easily figure out where time and money are being lost. By switching to a more efficient method of developing software, companies save money and time from those two primary resources and resources on top of them, such as employee morale.

Ultimately saving all of these different resources means extra money back into everyone’s pockets; if employees’ hands aren’t tied up with administrative tasks. Everyone who works for or with that business will save both time and money because it will waste less through inefficient software development. They’ll also be able to put their minds toward other innovative ideas which could earn even more revenue for your business.


11) Improved Focus on What Matters Most

An effective DevOps pipeline can increase productivity and allow for easier collaboration between teams—which means developers can focus on what matters most. With a seamless process from code to production, developers can iterate more quickly and deliver better products in less time. A strong focus on automation leads to greater efficiency and consistency of product releases while reducing human error.

Wrapping it Up

If you want to accelerate your software development process, DevOps could be a smart way to do so. With these top reasons and much more below, we hope you can now see how using DevOps can help to propel your company into a much-needed position of dominance. 

Now is not too late; there is still time for you to get ahead before your competitors—start today!

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Eight Reasons Why Custom Web Application Development Should be the Focus of Your Business

eight reasons why custom web application development should be the focus of your business

The use of the internet has penetrated the areas such as availing information, purchasing products, acquiring services, and any aspect a consumer can think of from a business. With the internet taking over almost every business sector today, making your business stand out of the box has become essentially critical for your company’s growth.

Distinguishing your business from others allows you to let your customers identify your brand, build trust, explore your services, and finally engage with your offerings. Hence, having a solid online presence is essential for the business.

It is equally crucial for your business to make the brand presence appealing and engaging. This is where custom web applications development comes in handy for companies.

Developing a custom web application has become much more convenient than it was a decade ago. Thanks to robust web application development platforms like WordPress and Liferay that can build the website without coding.

However, being a business leader, you need to have a proper strategy before developing your website or even mobile application for your business.

To make an impeccable online brand presence, you can choose custom web application development, as it offers out-of-the-box custom solutions to cater to the unique demands of your customers. It can be a perfect solution that can be developed while considering your business’s prerequisites, services, and functionality. In other words, a custom web application development service can entertain all the demands of your customers.

Since we now know the importance of custom web applications development, let’s have a look at eight reasons why every business must have their custom web application:

Eight Reasons for Custom Web Application Development

Stand Out of the Box

The web and application development companies’ custom web application development services offer robust and unique capabilities to your web application. This allows you to make your brand stand out of the box in the market. Moreover, the web application also helps you connect with your consumers personally, making engagement easy and smooth.

Security At Its Prime

Having an online presence brings challenges of security to the table. The risk of losing confidential information via malicious attacks and spyware is something that every business must undertake while planning their web application.

However, the custom web application development service providers keep these challenges in mind and use effective firewalls to keep the data safe. This, as a result, ensures the security of your application and business.

Flexible and Scalable Applications

With the growth of your business, the application needs upgrades. However, predesigned websites and applications are neither flexible nor scalable, limiting their lifespan. The custom web applications are designed with scalability and flexibility to ensure they can adjust to future demands and requirements.

This attribute of the custom web application helps you save tonnes of money and resources. Moreover, with the advent of cloud-native apps, the scalability and flexibility of your business application can further be enhanced adding additional value to your business.

Complete Functionality Control

While designing a web or mobile application, optimization should also be kept in mind along with marketing and branding. Optimization allows the custom web application to operate smoothly and can help you cope with prevailing drawbacks such as unexpected breakdowns and delay in output delivery.

Seamless Journey of the Customer

With the availability of functionalities and several design options, the search efforts for the required products should also be kept to a minimum. It is where custom web application development helps you to make your customer’s journey easy. This improves the customer experience and attracts them to visit your application repeatedly.

Better Business Function Automation

Having a tailor-made or custom web application improves the customer experience. It also helps businesses to optimize internal and external functions. A customized web application will help you with lead generation and attracting prospects, but it will also trim down the efforts of data organization. Moreover, an automated delivery system can share this data with the sales team to convert prospects into customers.

Creative and Attractive Designs

Custom web application development allows you to have a creative and attractive design for your application. This will enable you to attract more customers to the application enhancing the brand value and business growth.

Custom Back-End for Seamless Control

Backend plays a vital role in the smooth operations of your business. Therefore it is equally essential for your business to have a robust backend. Moreover, it should be maintained by someone who possesses knowledge of the details of the application.

The custom web application development service providers allow you to have an expert who monitors and manages your web application’s backend, making it easier for your business to focus on the operations.

To Sum Up

The migration of businesses from brick and mortar to the digital marketplace has allowed the internet to penetrate almost every industry vertical. To cope up with today’s competitive environment, it is critical to have a strong online presence. To achieve this presence, custom web application development is one of the best solutions for your business.

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image distribution
Image Distribution

image distribution

As your team invests significant time and resources developing models, it is imperative that processes are put into place to protect and maximize the return on that investment. To that end, in this installment of the ModelOps Blog Series we’ll discuss leveraging functionality provided by continuous integration/continuous deployment (CI/CD) frameworks such as Jenkins, CircleCI, and GitHub Actions to automate the push of model container images to production container registries. As your team develops and containerizes models, it’s important that they don’t just live on your R&D servers or model developers’ laptops where events like hardware failures or accidental reformats could wipe away capabilities in the blink of an eye. In addition, using a CI/CD pipeline to deploy your models to container registries allows you to do the following in an automated fashion every time you want to release a new version of a model:

  • Test the model’s functionality and scan for security issues
  • Store and control access to the model image in a persistent, secure, organized, and scalable fashion 
  • Trace the model image back to its original source code

If configured correctly, this type of automation minimizes the amount of labor required and mitigates the risk of human error through the model deployment process. The starting point for the image push process is a model container image successfully built by a CI/CD server. Make sure you are up to speed on what it takes to produce a model by responsibly sourcing data, following best practices for model training and versioning, and automating model container builds using CI/CD frameworks by checking out the previous posts in this series.

Leveraging container registries

Containerization is important to ensuring models function properly once they are deployed into production. Containerizing models ensures that they will execute in the same way regardless of infrastructure.

  • A container is a running software application comprised of the minimum requirements necessary to run the application. This includes an operating system, application source code, system dependencies, programming language libraries, and runtime.
  • A container repository is a collection of container images with the same name, but with different tags.
  • A container registry is a collection of container repositories.

When working with containerized model images, the container registry might be a collection of numerous container repositories, with each repository corresponding to a particular model. Each of these repositories might contain multiple images corresponding with multiple versions of the model tagged accordingly. 

There are numerous options as far as container registries go, including Amazon Web Services (AWS) Elastic Container Registry (ECR), Microsoft Azure Container Registry, and Google Container Registry. Automating the deployment of model container images to these container registries using CI/CD yields a number of benefits. Container registries allow you to easily store, secure, and manage model images. By automating deployment of container images, you can run unit tests to ensure correct model functionality or detect issues early in the deployment process; this includes scanning model images for potential security vulnerabilities. Additionally, if model images are deployed in an automated fashion using CI/CD, tagged model images within repositories within container registries can be traced back to their original source code.

Pushing models to registries using CI/CD

In the previous blog post in this series, we discussed using CI/CD frameworks such as Jenkins, CircleCI, and GitHub actions to automate the building, scanning, and testing of model container images. These CI/CD frameworks also offer support for automating the tagging and pushing of model container images to container registries. For some CI/CD frameworks and container registries, there is built-in compatibility, but for others, additional plugins/configurations are required to successfully automate the push process. Although the process differs in certain ways, container image pushes can be automated using most combinations of popular CI/CD frameworks and container registries.

The Modzy data science team implements a similar process for the models we develop, relying on Github for version control throughout the model development and containerization processes. Every time code is merged to a model repository’s master branch, CircleCI builds, scans, tests, tags, and pushes a new container image to an AWS ECR registry. In this way, bugs or vulnerabilities can be detected prior to the push of the image to the registry, and each image in each repository within the registry can be traced back to its source code using its tag.

What’s next

Now that we have scanned and tested model images built and pushed to a container registry, stay tuned for our next blog post which will discuss the process of deploying models into production.

Visit modzy.com to learn more.

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a step by step guide to ai model development
A Step By Step Guide To AI Model Development

a step by step guide to ai model development

In 2019, Venturebeat reported that almost 87% of data science projects do not get into production. Redapt, an end-to-end technology solution provider, also reported a similar number of 90% ML models not making it to production.

However, there has been an improvement. In 2020, enterprises realized the need for AI in their business. Due to COVID-19, most companies have scaled up their AI adoption and increased their AI investment.

According to the 2020 State Of The ML Report by Algorithmia, AI model development has become much more efficient. It reported that almost 50% of the enterprises deployed an ML model between 8 to 90 days.

This statistic shows the improvement in enterprise AI adoption. Yet, to completely harness the power of AI in your business, you need to build and deploy multiple models.

In this article, we will be discussing the steps in AI model development. We will also shed light on AI model development challenges and discuss how you can accelerate your enterprise AI adoption.

AI model development involves multiple stages interconnected to each other. The block diagram below will help you understand every step.

a step by step guide to ai model development

We will now break down each block in detail.

Step 1: Identification Of The Business Problem

Andrew Ng, the founder of deeplearning.ai always prefers seeing AI applications as a business problem. Instead of asking how to improve your artificial intelligence, he suggests asking how to improve your business. 

So, in the first step of your model development, define the business problem you are looking to solve. At this stage, you need to ask the following questions.

  • What results are you expecting from the process?
  • What processes are in use to solve this problem?
  • How do you see AI improving the current process?
  • What are the KPIs that will help you track progress?
  • What resources will be required?
  • How do you break down the problem into iterative sprints?

Once you have answers to the above questions, you can then identify how you can solve the problem using AI. Generally, your business problem might fall in one of the below categories.

  1. Classification: As the name suggests, classification helps you to categorize something into type A or type B. You can use this to classify more than two types as well(called multi-class classification).
  2. Regression: Regression helps you to predict a definite number for a defined parameter. For example, predicting the number of COVID-19 cases in a particular period in the future, predicting the demand for your product during the holiday season, etc.
  3. Recommendation: Recommendation analyzes past data and identifies patterns. It can recommend your next purchase on a retail site, a video based on the topics you like, etc.

These are some of the basic questions you need to answer. You can add more questions here depending on your business objective. But the focus should be on business objectives and how AI can help achieve them.

Step 2: Identifying And Collecting Data

Identification of data is one of the most important steps in AI model development. Since machine learning models are only as accurate as the data fed to them, it becomes crucial to identify the right data to ensure model accuracy and relevance.

At this stage, you will have to ask questions like:

  • What data is required to solve the business problem – customer data, inventory data, etc.
  • What quantity of the data is required? 
  • Do you have enough data to build the model?
  • Do you need additional data to augment current data?
  • How is the data collected and where is it stored?
  • Can you use pre-trained data?

In addition to these questions, you will have to consider whether your model will operate in real-time. If your model is to function in real-time, you will need to create data pipelines to feed the model.

You will also have to consider what form of data is required to build the model. The following are the most common formats in which data is used.

Structured Data: The data will be in the form of rows and columns like a spreadsheet, customer database, inventory database, etc.

Unstructured Data: This type of data cannot be put into rows and columns(or a structure, hence the name). Examples include images, large quantities of text data, videos, etc.

Static Data: This is the historical data that does not change. Consider your call history, previous sales data, etc.

Streaming Data: This data keeps changing continuously, usually in real-time. Examples include your current website visitors.

Based on the problem definition, you need to identify the most relevant data and make it accessible to the model.

Step 3: Preparing The Data

This step is the most time-consuming in the entire model building process. Data scientists and ML engineers tend to spend around 80% of the AI model development time in this stage. The explanation is straightforward – model accuracy majorly depends on the data quality. You will have to avoid the “garbage in, garbage out” situation here.

Data preparation depends on what kind of data you need. The data collected in the previous step need not be in the same form, the same quality, or the same quantity as required. ML engineers spend a significant amount of time cleaning the data and transforming it into the required format. This step also involves segmenting the data into training, testing, and validation data sets. 

Some of the things you need to consider at this stage include:

  • Transforming the data into the required format
  • Clean the data set for erroneous and irrelevant data
  • Enhance and augment the data set if the quantity is low

Step 4: Model Building And Training

At this step, you have gathered all the requirements to build your model. The stage is all set and now the solution modeling begins.

In this stage, ML engineers define the features of the model. Some of the factors to consider here are:

  1. Use the same features for training and testing the model. Incoherence in the data at these two stages will lead to inaccurate results once the model is deployed in the real world.
  2. Consider working with Subject Matter Experts. SMEs are well equipped to direct you on what features would be necessary for a model. They will help you reduce the time in reiterating the models and give you a head start in creating accurate models.
  3. Be wary of the curse of dimensionality, which refers to using multiple features that might be irrelevant to the model. If you are using unnecessary features, then the model accuracy takes a dip.

Once you define the features, the next step is to choose the most suitable algorithm. Consider model interpretability when selecting an algorithm. You do not want to end up with a model whose predictions and decisions would be hard to explain.

Upon selecting the appropriate algorithm and building a model, you will have to test it with the training data. Remember, the model will not give the expected result in the first go. You will have to tune the hyperparameters, change the number of trees of a random forest, or change the number of layers in a neural network. At this stage, you can also use pre-trained models and reuse them to build a new model.

Each iteration of the model should ideally be versioned so that you can monitor its output easily.

Step 5: Model Testing

You train and tune the model using the training and the validation data sets respectively. However, the model would mostly behave differently when deployed in the real world, which is fine.

The main objective of this step is to minimize the change in model behavior upon its deployment in the real world. For this purpose, multiple experiments are carried out on the model using all three data sets – training, validation, and testing.

In case your model performs poorly on the training data, you will have to improve the model. You can do it by selecting a better algorithm, increasing the quality of data, or feeding more data to the model.

If your model does not perform well on testing data, then the model might be unable to extend the algorithm. There might be the issue of overfitting where the model is too closely fit with a limited number of data points. The best solution then would be to add more data to the model.

This stage involves carrying out multiple experiments on the model to bring out its best abilities and minimize the changes it undergoes post-deployment.

Step 6: Model Deployment

Once you test your model with different datasets, you will have to validate model performance using the business parameters defined in Step 1. Analyze whether the KPIs and the business objective of the model are achieved. In case the set parameters are not met, consider changing the model or improving the quality and the quantity of the data.

Upon meeting all defined parameters, deploy the model into the intended infrastructure like the cloud, at the edge, or on-premises environment. However, before deployment you should consider the following points:

  • Make sure you plant to continuously measure and monitor the model performance
  • Define a baseline to measure future iterations of the model
  • Keep iterating the model to improve model performance with the changing data

A Note On Model Governance

Model governance is not a defined step in an AI model lifecycle. But it is necessary to ensure the model adapts to the changing environment without many changes in its results.

When a model is deployed in the real world, the data fed to it becomes very dynamic. Apart from the data, there might be changes in the technology, business goals, or a drastic real-world change like a pandemic.

While monitoring the model performance, it is also crucial to analyze how the above changes affect the model. Accordingly, you will have to reiterate the model. Consider monitoring the model for the following parameters:

  • Deviations from the pre-defined accuracy of the model
  • Irregular decisions or predictions
  • Drifts in the data affecting the model performance

Remember, model deployment is only the first step in the AI model lifecycle. You will have to continuously keep iterating the model to keep up with the changes in data, technology, and business.

The above steps gave a detailed approach to building an AI model. However, these steps do not factor in two crucial aspects of a business – time and people.

Like mentioned before, AI models need time to be developed. Even though the efficiency in deploying models has increased, not all companies can deploy efficient models. Most organizations also have a limited number of data scientists and ML engineers. Additionally, a smooth model development involves a combined effort from data engineers, data scientists, ML engineers, and DevOps Engineers.

Considering all these factors, the easy solution would be hiring AI experts who have well-defined processes to build and deploy models at a pace. At Attri, we do just that.

We have a well-defined process to build models which involve all the steps mentioned above. We also create a RACI chart where the role of each person is defined. This helps us to accelerate the model-building process. Additionally, along with the model handover, we provide Knowledge Transfer to our clients so that they can independently manage, monitor, and create multiple iterations of the deployed model.

Every deployed model is delivered with reports of the performance and SOPs to empower our client workforce and democratize AI in their enterprise. You can learn more about our model building expertise here

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