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According to IBM’s 2020 “Cost of a Data Breach” report, Canada placed third, behind the Middle East and the United States. The average cost in Canada is $6.35 million, an increase of 6.7 per cent from 2019. (The Logic)

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Talking point: IBM’s report, which included 26 Canadian companies and examined six years of historical data, found that 80 per cent of the breaches studied resulted in the compromise of customers’ personally identifiable information. The top three sectors impacted in Canada were financial, technology and services, with 42 per cent of the data breaches being attributed to malicious attacks, 35 per cent to a system glitch and 23 per cent from human error. “Canada having one of the world’s highest average costs for data breaches shows an urgent need for businesses to make cyber resiliency a top priority,” said Ray Boisvert, IBM Canada security expert and former CSIS assistant director.

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In a letter to Congress, CEO Arvind Krishna, who took the role in April, said the company opposes any technology used “for mass surveillance, racial profiling, violations of basic human rights and freedoms,” and called for a “national dialogue” on how domestic law enforcement agencies use the technology. (The Verge)

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Talking point: IBM’s decision comes as technology companies face increased scrutiny over their contracts with police amid violent crackdowns on peaceful protests over the killing of George Floyd. Experts have long said facial recognition systems are biased. A study by the U.S. National Institute of Standards and Technology last year confirmed that the majority of facial recognition algorithms performed worse on non-white faces. Last year, 2.4 per cent of Amazon shareholders voted in favour of banning the sale of its facial recognition technology to government agencies. Amazon, whose founder Jeff Bezos came out in support of the Black Lives Matter movement last week, has refused to answer questions on the topic. Krishna’s letter also called for new federal rules to crack down on police misconduct, and more training and education for in-demand skills to improve economic opportunities for people of colour.

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Rometty will depart in April after four decades with the company. She will be succeeded by Arvind Krishna, currently senior vice-president of cloud and cognitive software. Jim Whitehurst, chief executive of recent IBM acquisition Red Hat, has been appointed president. IBM’s shares were up four per cent following the announcement. (The Wall Street Journal)

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Talking point: Rometty leaves the company after a challenging eight years as chief executive. During her tenure, IBM’s shares fell more than 25 per cent, while many other tech companies saw massive growth. The new leadership appointments further highlight IBM’s hopes of reviving the company by betting on cloud computing. Following the July 2019 Red Hat acquisition, IBM reported its cloud and computing software segment brought in US$7.2 billion in revenue in the fourth quarter, while Red Hat revenue was up 24 per cent. Still, the 108-year-old company faces stiff competition in one of technology’s hottest sectors, of which Amazon owns nearly half—ahead of Microsoft, Alibaba and Google.

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The Calgary-based integrated oil and gas company is partnering with Amazon and IBM Services to help boost its digital transformation. That includes moving its data out of two local centres and into Amazon Web Services’ cloud, and the use of Amazon’s cloud computing services to analyze large amounts of data and employ reservoir simulations, as well as modeling greenhouse gas improvements for oilsands projects. (Financial Post)

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Talking point: Canadian oil companies are following in the footsteps of their global counterparts like U.S.-based Anadarko Petroleum and the U.K.’s BP, who have partnered with Silicon Valley firms to improve performance using data. Cenovus’s announcement comes weeks after Suncor forged a deal with Microsoft for a digital transformation of its own. A recent analysis by EY Canada and American Express Canada found that digital technology “offers the greatest impact and highest returns to oil and gas companies” in helping boost efficiency and reduce cash leakage. Cenovus seems aware of this, with Ian Enright, the company’s vice-president and chief information officer, telling the Financial Post, “I don’t want this to be our grandfather’s industry.”

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The company’s Project Debater, a data-driven computer designed to debate humans, turned its sights inward for a Cambridge University-hosted debate over the benefits and perils of artificial intelligence. It took about a minute for the system to determine which side Cambridge students’ crowdsourced contributions were on, then rank and present arguments on both sides—though it didn’t serve drinks or tidy the croquet pitch. (Associated Press)

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Talking point: The self-hating side of the AI computer project presented a bleak, Skynet-like vision of the future: “It cannot make moral decisions easily and can lead to disasters. AI can cause a lot of harm,” it said. The pro-AI side was decidedly more cheery, saying it would rid humankind of “mundane and repetitive tasks.” The winner, picked by the Cambridge audience, came down solidly on the side of AI. Cleary, Project Debater knows how to read a crowd.

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Red Hat will join IBM’s hybrid cloud division, but will retain its independence and focus on open source. Red Hat’s management team will remain in place, with CEO Jim Whitehurst reporting to IBM CEO Ginni Rometty. (The Logic)

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Talking point: IBM’s cloud revenue is up from four per cent in 2013 to 25 per cent. However, the firm has a fraction of the global market. In 2018, first-place Amazon had 31.7 per cent of the global cloud market, while fifth-place IBM had just 3.6 per cent. The company was in fourth place in 2017, but has now fallen behind Alibaba. The Red Hat acquisition is designed to reverse that trend. IBM expects it to add about two points of compound annual revenue growth over a five-year period. Hitting that target will partially depend on IBM being able to grow Red Hat’s revenues without alienating its current customers, many of whom use other cloud service providers, including Amazon and Microsoft, integrated with Red Hat’s services. For now, IBM is heavily emphasizing its desire to leverage Red Hat’s connections in the open source community to scale, with a focus on the hybrid cloud.

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George McDonald will monitor tech companies and help the bureau use technology to gather more information on firms it suspects of engaging in anti-competitive behaviour. “The appointment of a Chief Digital Enforcement Officer is part of the Bureau’s ongoing efforts to keep pace with today’s rapidly changing digital economy,” said Kelly Clarke, senior speechwriter at the bureau. “McDonald will also develop policies and advise the Bureau on effective digital enforcement, and evaluate emerging technologies for potential adoption by the Bureau.” He will serve for up to two years, after which the bureau will decide whether to make the digital enforcement position permanent. McDonald spent the past nine years at IBM working on artificial intelligence and analytics. He will report directly to the competition commissioner. (The Logic)

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Talking point: McDonald has frequently raised concerns about how technology impacts privacy and touted the benefits of ethical AI. “Facebook is a perfect example of a large organization failing to put basic data governance, data ownership and executive accountability in place,” he wrote on LinkedIn, after news broke that the social media giant had stored hundreds of millions of passwords in plain text. When IBM endorsed the EU’s ethics guidelines on trustworthy AI in April, McDonald highlighted that his firm was an outlier among large tech companies. “I am shocked at the absence of support from the big players. These are guidelines and not legally binding so there shouldn’t be much controversy,” he wrote. McDonald’s appointment is the latest sign of the bureau’s enhanced focus on digital enforcement. In June, the bureau moved to force Thoma Bravo, a private equity firm, to sell one of its software products over antitrust concerns. The same month, Anthony Durocher, deputy commissioner of monopolistic practices, gave a Toronto speech detailing a new approach focused on encouraging data portability. 

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Mayor Frank Scarpitti announced the hub, which will provide office space for startups, at the Collision Conference in Toronto as part of a pitch to get companies to set up north of Toronto. (CBC)

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Talking point: Markham isn’t the only Canadian municipality trying to attract some of the over 25,000 people from 125 countries at Collision to relocate. Most city delegations at the conference—including Brampton, Sault Ste. Marie, Barrie, Richmond Hill, Vaughan, Hamilton, Kitchener and Pickering—are located near Toronto. Some are looking to attract people farther distances, including Summerside, P.E.I.; Edmonton and Calgary. Last week, The Logic’s editor David Skok wrote about Calgary’s attempts to foster economic growth by growing their local tech ecosystem.

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The study of 2,300 executives and professionals identified three key reasons for the lack of prioritization: firms don’t see the financial value (despite evidence proving otherwise), men underestimate the extent of workplace gender bias and companies do not have a sense of urgency on the issue. (IBM)

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Talking point: The firms that did lead in gender equality—identified in the study as “First Movers”—did so because they took a systematic approach to solving the issue. They set measurable goals to advance women in their workplaces and allocated budget and resources to do so. Another factor was creating a culture of inclusion: women tend to leave male-dominated fields like STEM due to continued discrimination. In Canada, organizations like the 30% Club and Catalyst are pushing companies to adopt goals and policies to put more women on boards and in executive roles.