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Smartening Watson: IBM Supercomputer Bolsters Cybersecurity Job Gap

Skynet isn’t becoming self-aware, but IBM ‘s ( IBM ) supercomputer, Watson, aims to become more aware … of cybersecurity attacks. To combat a growing number of Black Hats and a shortfall in their counterpart White Hats — the company says forecasts see as many as 1.5 million unfilled cybersecurity positions by 2020 — IBM was set early Tuesday to announce a year-long project with eight universities to smarten Watson. Watson is already filtering Big Data to bolster cancer research, create learning tools and improve business operations. The next frontier? Teaching Watson to scour the 80% of unstructured online data to suss out cyberthreats. IBM’s security operations center (SOC) already receives 20 billion pieces of raw data per day detailing potential cyber mischief, says Caleb Barlow, IBM Security vice president. On average, companies spend $1.3 billion annually, or 21,000 hours, chasing false positives. “Some can be mundane, like a user was locked out after 10 password tries,” Barlow told IBD. “Or, we could get data about an ATP (advanced threat protection) attacker. … It’s not a matter of looking for the needle in the haystack. It’s a matter of a looking for the needle in a stack of needles.” Enter Watson On Unstructured-Data Front Watson is capable of digesting structured data, Barlow says. He likens it to a paramedic responding to a car accident. Watson can take the vitals, but it cannot look for the crack in the windshield where the victim hit his head (unstructured data). It’s the difference between analysis and insights, Barlow says. Humans can do both, but the sheer volume of data is overwhelming. “Security data is in unstructured data — blogs, wikis, articles, white papers, presentation notes,” he said. “How do we take that experiential data, data we can only get from a human and apply that to this challenge?” First, IBM will team up with students from California State Polytechnic University, Pennsylvania State University, Massachusetts Institute of Technology, New York University, University of Maryland, University of New Brunswick, University of Ottawa and University of Waterloo. There will be 200 IBM staff members and students working on the project. “The partnership between IBM and Penn State is an ideal opportunity for our students to experience the kinds of bleeding edge knowledge management that will drive technology in the next century,” Penn State professor Patrick McDaniel said via email. “At the same time, it is a wonderful chance for Penn State to showcase its exceptional student engineers.” Under instruction from IBM experts, the students will process 15,000 documents per month including threat intelligence reports, cybercrime strategies and threat databases. Watson will slowly begin to learn that unstructured data. It’s almost childlike, Barlow says. “You have to sit down with Watson and explain the language,” he said. “Then, we go through, ‘Here, you were right,’ or ‘Here, you were wrong.’” The difference is that Watson won’t forget, he says. Still, a human analyst remains necessary to respond to developing attacks — whether that’s blocking the hacker, watching malware inside the network or plugging holes. “Watson is not replacing the analyst,” he said. “But if I can get Watson to ask all those questions and prioritize that, I can be asking millions of questions (to suss out legitimate cyberattacks) I would not be able to ask otherwise.” Demand Outstrips New Talent That’s more valuable than finding the needle, Barlow says. More than 10,000 security research papers and 60,000 security blogs are published each year and each month, respectively. The National Vulnerability Database has received reports of 75,000-plus software vulnerabilities. Coupled with that, varying reports place the current paucity in cybersecurity skilled employees at 200,000 to 1 million. It was a huge topic at the RSA Conference in February in San Francisco. But it’s not that students aren’t interested, Barlow says. “Universities have shown me their growth statistic,” he said. “It’s a hockey stick. Their challenge is, they are running out of facility space.” The problem is immediacy. Twenty years ago, cybersecurity wasn’t at the forefront of IT concerns. They, today there aren’t enough skilled professionals. The chief information security officer (CISO) is newest entrant to the C-Suite. “These are not skills people have historically had,” Barlow says. “It’s IT-centric computer science skills. It requires a collision of those traditional computer science skills with forensics and investigative skills.” He added: “No matter how aggressively universities turn out new talent, they won’t be able to meet the demand.”

Tesla ‘Cousin’ SolarCity Trims 2016 View On Nevada, ITC Effect

Nevada’s net-metering decision torched Tesla Motors ( TSLA ) “cousin” SolarCity ( SCTY ) late Monday, after the No. 1 residential solar installer cut 2016 installation guidance and reported a 150-megawatt dip in expected Q1 bookings. SolarCity also reported a wider-than-expected Q1 loss and was in the red, minus items, for the 13th consecutive quarter. Revenue, however, topped the expectations of 18 analysts polled by Thomson Reuters, and SolarCity beat its own installation forecast. In after-hours trading following the earnings release, SolarCity stock crashed more than 15%, after rising 3.1% in Monday’s regular session, at 22.51. As of Monday’s close, shares are down 56% this year. For Q1, SolarCity reported $123 million in sales, up 82% vs. the year-earlier quarter, and smashing Wall Street expectations for $108.4 million. But losses per-share minus items deepened to $2.56 vs. consensus views for $2.31. Last year, SolarCity pledged to curb its annual 80% growth rate in order to turn around profits. During Q1, SolarCity installed 214 megawatts, up 40% year over year and beating its own guidance for 180 MW. For Q2, SolarCity expects 185 MW in installations, which would be down 2% vs. Q2 2015. SolarCity also guided to $2.70-$2.80 losses per share ex items, widening from $1.61 in the year-earlier quarter and missing the consensus for $2.13. For the year, SolarCity now expects 1 gigawatt to 1.1 GW in installations vs. earlier views for 1.25 GW, noting that Q1 bookings were about 150 MW lower than anticipated and are unlikely to be made this year. SolarCity said Nevada averaged about for 20 MW in quarterly installations. The company exited the state in December after Nevada regulators opted to cut net-metering payments to solar customers, which makes the economics of installing solar energy systems less attractive to users. Top rival Sunrun ( RUN ) also exited Nevada. Spooked by Nevada’s move, some potential customers have backed off booking solar installations, SolarCity said Monday. And the extension of the U.S. Investment Tax Credit (ITC), a key solar subsidy, beyond what had been a 2016 deadline — good in the long run — removed the urgency to get projects done right away. “Pending regulatory decisions in California, Massachusetts and New Hampshire (which have since been largely resolved) further delayed solar purchasing decisions,” SolarCity wrote in its earnings release. Tesla CEO Elon Musk is chairman of SolarCity, whose CEO is his cousin, Lyndon Rive. The two companies have a battery-technology partnership.

After Hours: SolarCity, Gap Crash, Stamps.com, MaxLinear Rise

SolarCity ( SCTY ), Gap ( GPS ), Stamps.com ( STMP ) and  MaxLinear ( MXL ) were among those reporting quarterly earnings or preliminary figures after the close on Monday. SolarCity SolarCity’s per-share loss deepened to $2.56, worse than an expected loss of $2.32. GAAP revenue surged to around $123 million, topping estimates for $109.8 million. But the residential solar-energy systems installer expects a second-quarter loss that was far worse than investors expected. SolarCity cut its full-year installation forecast to 1.0-1.1 gigawatts from 1.25 gigawatts and said first-quarter bookings were weak Shares tumbled 14% in late trading after closing up 3.1% on the stock market today . The company in a Q1 review cut its full-year installation forecast to 1.0-1.1 gigawatts from 1.25 gigawatts and said first-quarter bookings were weak. The company, whose chairman is Tesla ( TSLA ) CEO Elon Musk, also said regulatory decisions, pending or resolved, hindered potential decisions on purchases. Gap Gap expects first-quarter EPS of 31 to 32 cents, below analysts’ consensus for 33 cents after saying that sales fell 6% to $3.44 billion, well below Wall Street’s $3.54 billion target. April same-store sales fell 7%. The struggling apparel retail also said it’s evaluating its Banana Republic and Old Navy chains, mainly outside the U.S. Gap shares plunged 11% in extended trading after closing up 0.7% at 21.81. Gap will report full Q1 results on May 19. Stamps.com Stamps.com earned $1.72 a share in its Q1, up 139% vs. a year earlier. Revenue rose 86% to $81.8 million. Wall Street had expected EPS of $1.06 on revenue of $65.61 million. Stamps.com now sees full-year EPS of $6-6.50 and revenue of $310 million-$330 million. Analysts had forecast EPS $5.28 and revenue of $301.8 million. Stamps.com stock leapt 17% in late trading. Shares closed up 4.7% to 88.34, trying to break a 2-month downtrend since hitting a record high of 123.75 on May 4. MaxLinear MaxLinear ( MXL ) stock rose late Monday after the wireless chipmaker reported strong first quarter earnings growth and said it will buy the wireless infrastructure backhaul business of Broadcom ( AVGO ) for $80 million. On April 28, MaxLinear announced that it had bought assets related to Microsemi’s ( MSCC ) wireless business, which was previously part of PMC-Sierra, for $21 million plus some assumed liability. MaxLinear’s Q1 EPS minus one-time items shot up to 45 cents vs. 9 cents a share in the same quarter a year ago, beating analyst estimates by 2 cents. Revenue grew 190% to $102.7 million, edging views for $102.2 million, partly on strong early ramp sale of its high-speed optical interconnect products. MaxLinear shares rose 3% late.