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Partnership with Palantir further unlocks IBM’s AI value

Since Arvind Krishna took the helm as CEO in April, IBM has engaged in a series of acquisitions and partnerships to support its transformative shift to fully embrace an open hybrid cloud strategy. The company is further solidifying the strategy with the announcement that IBM and Palantir are coming together in a partnership that combines AI, hybrid cloud, operational intelligence and data processing into an enterprise offering. The partnership will leverage Palantir Foundry, a data integration and analysis platform that enables users to easily manage and visualize complex data sets, to create a new solution called Palantir for IBM Cloud Pak for Data. The new offering, which will be available in March, will leverage AI capabilities to help enterprises further automate data analysis across a wide variety of industries and reduce inherent silos in the process.

Combining IBM Cloud Pak for Data with Palantir Foundry supports IBM’s vision of connecting hybrid cloud and AI

A core benefit that customers will derive from the collaboration between IBM (NYSE: IBM) and Palantir (NYSE: PLTR) is the easement of the pain points associated with adopting a hybrid cloud model, including integration across multiple data sources and the lack of visibility into the complexities of cloud-native development. By partnering with Palantir, IBM will be able to make its AI software more user-friendly, especially for those customers who are not technical by nature or trade. Palantir’s software requires minimal, if any, coding and enhances the accessibility of IBM’s cloud and AI business.

According to Rob Thomas, IBM’s senior vice president of software, cloud and data, the new offering will help to boost the percentage of IBM’s customers using AI from 20% to 80% and will be sold to “180 countries and thousands of customers,” which is “a pretty fundamental change for us.” Palantir for IBM Cloud Pak for Data will extend the capabilities of IBM Cloud Pak for Data and IBM Cloud Pak for Automation, and according to a recent IBM press release, the new solution is expected to “simplify how businesses build and deploy AI-infused applications with IBM Watson and help users access, analyze and take action on the vast amounts of data that is scattered across hybrid cloud environments, without the need for deep technical skills.”

By drawing on the no-code and low-code capabilities of Palantir’s software as well as the automated data governance capabilities embedded into the latest update of IBM Cloud Pak for Data, IBM is looking to drive AI adoption across its businesses, which, if successful, can serve as a ramp to access more hybrid cloud workloads. IBM perhaps summed it up best during its 2020 Think conference, with the comment: “AI is only as good as the ecosystem that supports it.” While many software companies are looking to democratize AI, Red Hat’s open hybrid cloud approach, underpinned by Linux and Kubernetes, positions IBM to bring AI to chapter 2 of the cloud.

For historical context, it is important to remember that the acquisition of Red Hat marked the beginning of IBM’s dramatic transformation into a company that places the values of flexibility, openness, automation and choice at the core of its strategic agenda. IBM Cloud Paks, which are modular AI-powered solutions that enable customers to efficiently and securely move workloads to the cloud, have been a central component of IBM’s evolving identity.

After more than a year of messaging to the market the critical role Red Hat OpenShift plays in IBM’s hybrid cloud strategy, Big Blue is now tasked with delivering on top of the foundational layer with the AI capabilities it has been tied to since the inception of Watson. By leveraging the openness and flexibility of OpenShift, IBM continues to emphasize its Cloud Pak portfolio, which serves as the middleware layer, allowing clients to run IBM software as close or as far away from the data as they desire. This architectural approach supports IBM’s cognitive applications, such as Watson AIOps and Watson Analytics, while new integrations, such as those with Palantir Foundry will support the data integration process for customers’ SaaS offerings.

The partnership will provide IBM and Palantir with symbiotic benefits in scale, customer reach and capability

The partnership with IBM is a landmark relationship for Palantir that provides access to a broad network of internal sales and research teams as well as IBM’s expansive global customer base. To start, Palantir will now have access to the reach and influence of IBM’s Cloud Paks sales force, which is a notable expansion from its current team of 30. The company already primarily sells to companies that have over $500 million in revenue, and many of them already have relationships with IBM. By partnering with IBM, Palantir will not only be able to deepen its reach into its existing customer base but also have access to a much broader customer base across multiple industries. The partnership additionally provides Palantir with access to the IBM Data Science and AI Elite Team, which helps organizations across industries address data science use cases as well as the challenges inherent in AI adoption.

Partners such as Palantir support IBM, including by helping the company scale Red Hat software and double down on industry cloud efforts

As a rebrand of its partner program, IBM unveiled the Public Cloud Ecosystem program nearly one year ago, onboarding key global systems integrators, such as inaugural partner Infosys, to push out IBM Cloud Paks solutions to customers on a global scale. As IBM increasingly looks up the technology stack, where enterprise value is ultimately generated, the company is emphasizing the IBM Cloud Pak for Data, evidenced by the November launch of version 3.5 of the solution, which offers support for new services.

In addition, IBM refreshed the IBM Cloud Pak for Automation while integrating robotic process automation technology from the acquisition of WDG Automation. Alongside the product update, IBM announced there are over 50 ISV partners that offer services integrated with IBM Cloud Pak for Data, which is also now available on the Red Hat Marketplace. IBM’s ability to leverage technology and services partners to draw awareness to its Red Hat portfolio has become critical and has helped accelerate the vendor’s efforts in industry cloud following the launch of the financial services-ready public cloud and the more recent telecommunications cloud. New Cloud Pak updates such as these highlight IBM’s commitment to OpenShift as well as its growing ecosystem of partners focused on AI-driven solutions.

Palantir’s software, which serves over 100 clients in 150 countries, is diversified across various industries, and the new partner solution will support IBM’s industry cloud strategy by targeting AI use cases. Palantir for IBM Cloud Pak for Data was created to mitigate the challenges faced by multiple industries, including retail, financial services, healthcare and telecommunications — in other words, “some of the most complex, fast-changing industries in the world,” according to Thomas. For instance, many financial services organizations have been involved in extensive M&A activity, which results in a fragmented and dispersed environment involving multiple pools of data.

Palantir for IBM Cloud Pak for Data will remediate associated challenges with rapid data integration, cleansing and organization. According to IBM’s press release, Guy Chiarello, chief administrative officer and head of technology at Fiserv (Nasdaq: FISV), an enterprise focused on supporting financial services institutions, reacted positively to the announcement, stating, “This partnership between two of the world’s technology leaders will help companies in the financial services industry provide business-ready data and scale AI with confidence.” 

Cloud vendors go deep with industry solutions

Google Cloud and SAP are flagship examples of vendors building vertically oriented strategies with the introduction of industry cloud solutions

Over the last year, as more organizations accelerated the migration to the cloud, it has become evident that a horizontal cloud does not always meet the specific needs of certain industries, especially highly regulated ones such as banking or healthcare. In response to the increasing complexity of certain industries and the regulations that they are governed by, along with the overall uptick in cloud adoption during the era of COVID-19, cloud vendors are investing in the development of clouds that cater to industry-specific nuances and the demands of safely distanced or remote work. The narrowing of focus is part of broader strategic objectives that extend beyond just the immediate commercialization of opportunity and revenue impact.

Initiatives by SAP and Google highlight how innovation and technological advancements in AI and machine learning (ML) factor into the evolution of industry clouds. With recent rollouts and announcements, both vendors have highlighted the importance of creating new types of data-driven cloud solutions powered by AI and ML, augmented by networks of customers and partners. While SAP and Google currently participate in fruitful partnerships together, it will be interesting to watch the common goal of delivering vertical-specific capabilities to their customers unfold to see whether the two companies align or compete in this new chapter of cloud defined by industry.

Google leads with innovation in ML and AI to augment, rather than replace, legacy solutions

In February Google Cloud CEO Thomas Kurian emphasized that Google Cloud’s top priority is to develop a new generation of applications, which will be able to extract data from traditional line-of-business (LOB) applications such as those used for CRM and use technologies like AI and ML to optimize outcomes. Kurian reinforced the strategy of veering away from the development of traditional enterprise applications in favor of industry-specific apps that are designed to extract data from these traditional applications.

Leading up to 2020, the migration timelines for the 80% of companies that had not yet made the move to the cloud rested on comfortably planned milestones that indicated an evolution versus an urgent call to change. Looking back over the last six months, organizations suddenly found themselves in the thick of the impetus to migrate to the cloud and to do so quickly. Even organizations whose cloud journeys were well underway prior to the COVID-19 outbreak are narrowing their strategies and turning to clouds that cater to the specific requirements and compliance standards that industries, especially those that are highly regulated, including the government, require. As a result, a number of leading cloud vendors such as IBM (NYSE: IBM), Google (Nasdaq: GOOGL) and SAP (NYSE: SAP) have recently made strides in building out and refining their cloud strategies to cater to the specific requirements and demands of certain industries.  

Atos gains AI consulting expertise through the Miner & Kasch acquisition to enable digital transformations

Miner & Kasch’s deep AI expertise in North America helps Atos extend global reach and scale

According to Atos SVP of Big Data & Security Jerome Sandrini, Miner & Kasch’s appeal included raw talent — “pure data scientists, real PhDs, not citizen data scientists” — and reusable components, particularly assets that will work with Atos’ Edge servers. Listening to Miner & Kasch co-founder Niels Kasch walk through several use cases, TBR understood both of Sandrini’s points, as the technical expertise was matched with examples of applying distinct approaches and solutions across multiple industries. Sandrini also noted Atos’ commitment to ensuring Miner & Kasch is integrated fully into the larger Atos but not diluted, retaining its agility and culture. Miner & Kasch resources were merged with resources gained from the zData acquisition in 2017. The Miner & Kasch acquisition accelerates Atos’ Data Science as a Service offering and improves the company’s ability to deploy edge and next-generation data science platforms for industry solutions.

Since the beginning of 2019, Atos has been following a bolt-on acquisitions approach to gain capabilities and intellectual property and support its expansion in areas with growth potential. In 2019 Atos made two purchases with 100 employees each, IDnomic in identity and access management and X-perion Consulting in energy and utilities consulting. In 2020 Atos announced six acquisitions, three in the U.S. and three in France, ranging from 50 to 800 employees, targeting new areas of expansion for Atos and offering small-scale capabilities with IP: Maven Wave (U.S.) in Google Cloud; Miner & Kasch (U.S.) in AI and data science; Paladion (U.S.) in AI-driven cybersecurity and risk analytics; AliA Consulting (France) for SAP S/4 HANA; EcoAct (France) in decarbonization; and digital.security (France) in cybersecurity services.

In April Atos announced the acquisition of Maryland-based data analytics consulting boutique Miner & Kasch, folding it into Atos’ zData business group to create a team of more than 100 AI consultants. TBR spoke with Miner & Kasch co-founders Donald Miner and Niels Kasch, zData CEO Dan Feldhusen, and Atos SVP of Big Data & Security Jerome Sandrini about Atos’ strategy behind the acquisition and expectations for the zData business group heading into 2021.

COVID-19 pushes automation to the forefront of business strategies

Automation shifts from a discussion to an imperative across all industries

The decision to embrace automation typically requires an organization to engage in careful strategic planning and analysis over a period of time. On one hand, automation enables a level of efficiency, consistency and quality that manual deployment alone cannot achieve. On the other hand, skeptics have long questioned the point at which automation can go too far and how to find balance and decide which tasks should and should not be automated. That debate is now over, as the deployment of automated processes and technology is imperative to fill in the innumerable voids in a new reality where COVID-19 is not just part of our vocabulary but a new abnormal in which we all live. 

Past discussions of whether to automate were typically highly dependent upon factors like industry vertical, whereby sectors with a heavy manufacturing arm, for instance, were much more likely to embrace automation than others. Massive staffing shortages are now the primary driver behind the call for widespread automation, and the interest has manifested itself in multiple forms, such as the deployment of robots, drones and AI — technologies that are being leveraged by industry verticals across the board.

Staffing shortages have affected every grocery store and pharmacy, and many are relying on robots to transport goods from warehouses and stores to delivery vehicles. In agriculture, there has been an increase in the use of terrain-based robots to convert agricultural units into disinfectant sprayers. In manufacturing and delivery, Baidu (Nasdaq: BIDU) has partnered with Neolix to deliver critical items such as food and supplies to hospitals in Beijing with the use of the Apollo autonomous vehicle. Baidu has additionally applied AI algorithms to track the spread of infection and predict where the next hot zone may crop up so that local facilities are better prepared. While the number of riders of public transport has plummeted, railways, buses and subways still must operate even if on a skeleton schedule. The deployment of automated technology such as self-driving trains has increased dramatically, as has the use of robots to disinfect and clean cars.

The healthcare industry faces the most pressing challenges as it seeks to employ remote workforce programs and develop scalable solutions on an emergency-fueled time line. While some degree of on-site presence is unavoidable, the risk is being mitigated, in some cases, by the use of disinfection robots, which were deployed by Xenex Corp. to over 500 hospitals in China and are also now being shipped to Italy. Drone delivery of medication is anticipated to be the next wave of automation, and companies like Drone Delivery Canada (DDC) Corp. predict that they will become commonplace, and soon. DDC President and CEO Michael Zahra stated, “The company is in dialogue with governments at various ministries and levels emphasizing that the current situation is an ideal use case for our proven drone logistics solution to limit person-to-person contact; bring needed medical and pharmaceutical supplies to remote, rural, and suburban communities; transport blood samples to laboratories for testing; and deliver other relevant supplies.”

The application of automated technologies is clearly not confined to one area and will continue to ease the burden that COVID-19 has placed on all of our lives. When the pandemic eventually subsides, the silver lining to the shortages, panic and crippling effect on the economy will be that healthcare providers, companies and individuals will be more apt to embrace the use of automated technology in almost every aspect of their daily lives.

Click here to listen to this audio clip, COVID-19 Business Impacts | Remote Work, in its entirety.

Leading CSPs and webscales implement new ICT architecture to fully capitalize on digital era

Insights from TBR’s 2020 Telecom Predictions

Key technologies, most notably cloud, virtualization, 5G, edge computing, AI and machine learning (ML), are coalescing to usher in a new era, commonly referred to as the digital era, but also referred to as the 5G era or the fourth industrial revolution (Industry 4.0). It is widely expected that during this era, industries will be fundamentally transformed, people’s lives will be greatly enhanced, and productivity will enter a new phase of sustained growth, all of which will contribute to an economic boom and improved standard of living. Communication service providers (CSPs) have a golden opportunity to play a critical role in the digital era by providing not only ubiquitous, intelligent connectivity but also value-added services that participate in and enable this economic development.

TBR’s research suggests 2020 will be a springboard year for the telecom industry’s development of the new architecture, with spend in the key markets of 5G, network virtualization and edge computing poised to ramp up significantly through the middle of the next decade. TBR also anticipates that systems integrators will play a much broader and key role in helping CSPs transform their businesses and networks and that webscales will increasingly encroach on CSP turf as they concurrently pursue new value created from the aforementioned technologies.

Join Principal Analyst Chris Antlitz on Feb. 12 as he provides leading-edge analysis on where the telecom industry is heading and how the digital era will impact stakeholders in the telecom ecosystem.

Don’t miss topics including:

  • Why webscales are building out the edge
  • How the open RAN and vRAN markets are developing
  • Why systems integrators will play a key role in CSP transformations

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

TBR 2020 Telecom Predictions: Leading CSPs and webscales implement new ICT architecture to fully capitalize on digital era

Leading CSPs tackle business and network transformation to capture value created in the digital era

Key technologies, most notably cloud, virtualization, 5G, edge computing, AI and machine learning (ML), are coalescing to usher in a new era, commonly referred to as the digital era, but also referred to as the 5G era or the fourth industrial revolution (Industry 4.0). It is widely expected that during this era, industries will be fundamentally transformed, people’s lives will be greatly enhanced, and productivity will enter a new phase of sustained growth, all of which will contribute to an economic boom and improved standard of living. Communication service providers (CSPs) have a golden opportunity to play a critical role in the digital era by providing not only ubiquitous, intelligent connectivity but also value-added services that participate in and enable this economic development.

While the future looks bright for participants in the digital era, especially for CSPs, the reality is that CSPs’ traditional business models, established ways of working and current network systems are not relevant in this new era, meaning these companies must transform into digital service providers (DSPs) and become more webscale-like in nature. As part of this imperative to evolve, leading CSPs are transitioning their networks to a virtualized, container- and microservices-based, cloud-native architecture. This cloud-centric network architecture will enable CSPs to participate in new value creation stemming from new technologies, such as 5G and edge computing, and adopt next-generation network operations based on data as well as AI and ML for continuous automation. This new architecture will also enable CSPs to take advantage of network slicing and low latency to more effectively support use cases in areas such as autonomous transportation, video analytics, robotic process automation, AR/VR solutions, advanced healthcare applications and cloud-based gaming.

TBR’s research suggests 2020 will be a springboard year for telecom industry development toward the new architecture, with spend in the key markets of 5G, network virtualization and edge computing all poised to ramp up significantly through the middle of the next decade. TBR’s research also suggests that systems integrators will play a much broader and key role in helping CSPs transform their businesses and networks and that webscales will increasingly encroach on CSP turf as they concurrently pursue new value created from the abovementioned technologies.

2020 Predictions:

  • Webscales start building out the edge
  • Leading CSPs begin commercial deployments of open RAN and vRAN in 2020
  • Systems integrators will assume prime role in new architecture build

Register for TBR’s 2020 Telecom Predictions webinar, Leading CSPs and webscales implement new ICT architecture to fully capitalize on digital era, Feb. 12, 2020.

Technology Business Research 2020 Predictions is a special series examining market trends and business changes in key markets. Covered segments include telecom, cloud, devices & commercial IoT, data center, and services.

HPE’s CMS unit reemerges as a software-centric contender in the new network architecture

TBR perspective  

TBR believes HPE’s CMS unit has the potential to become a significant disruptor in the telecom space. CMS, which had been marginalized in prior years while Hewlett Packard Co. split into HP Inc. and HPE and as HPE executed divestitures, restructurings and developed a new strategy, has received new life after obtaining corporate sponsorship from HPE’s relatively new CEO, Antonio Neri, and CFO, Tarek Robbiati, who was formerly the CFO at Sprint (NYSE: S). CMS leadership reports directly to Robbiati. With the C-Suite and board of directors providing corporate support, the telecom vertical will become a key growth pillar for HPE going forward, given the technology transformation and business model transformation that is being prompted by 5G, edge computing, AI and automation. 

The CMS unit represents only a small percentage of HPE’s total revenue, but the unit is a key gateway into emerging opportunities that are impacting the telecom vertical. CMS is reestablishing itself in the market as a growth engine for HPE corporate and is receiving the funding and support required to drive its portfolio, particularly in the management and orchestration (MANO), 5G core, and digital identity spaces. TBR believes CMS is positioned to be a key vendor in the new network architecture, which will be microservices-based, cloud-native and distributed.

CMS faces some notable hurdles, including the negative perception of its capabilities that followed the bad press it received as a supplier and the prime systems integrator for Telefonica’s (NYSE: TEF) software-defined transformation initiative back in 2015. The company was eventually replaced by several other suppliers. TBR believes the lingering effects of this situation have hindered CMS’ growth over the past few years, but notes that CMS has put the incident in its rearview mirror and is making significant headway moving forward.

CMS’ mindshare and credibility are moving in a positive direction, and the unit is gaining significant traction in CSP accounts, particularly for its Service Orchestrator and NFV Director MANO offerings. CMS has an impressive roster of CSP customers and has played a behind-the-scenes role in several significant network transformation projects, including SK Telecom (NYSE: SKM) and Vodafone (Nasdaq: VOD). These reference wins will be critical to positioning HPE as a contender in new RFPs, particularly in disruptive areas such as MANO and 5G core.

CMS is challenged by OSS domain incumbents like Amdocs (Nasdaq: DOX) and Ericsson (Nasdaq: ERIC), which CSPs will be reluctant to move on from due to possible migration and integration issues. This hesitancy could also prohibit the majority of CSPs from altering their procurement models to adopt more modular solutions, as webscales have done. CMS’ portfolio is increasingly aligned to this trend. The most difficult challenge may be delivering on helping CSPs become more than the connectivity provider or “dumb pipe” in a 5G world. Vendors will be jockeying to deliver this dream, but HPE may be better served focusing on providing the solutions that will enable CSPs to run the most efficient, cost-effective networks possible.

HPE (NYSE: HPE) hosted its first ever North America Communications and Media Solutions (CMS) Analyst Summit in Boston, bringing along top leadership from the company’s CMS business, who delved into CMS’ strategy and portfolio as well as key customer wins and success stories. Following executive presentations, which were interactive in nature, with industry analysts able to pose questions to presenters, analysts received one-on-one time with CMS VP and General Manager Phil Mottram, CMS Chief Technology Officer Jeff Edlund, CMS VP of R&D and Delivery Mark Colaluca, and CMS VP of Product Strategy and Lifecycle Management Domenico Convertino.

With CMS recently emerging from the shadows of HPE’s Pointnext business and retooling its portfolio to align with demand from communications service providers (CSPs), executives were upbeat about CMS’ ability to take market share and compete with highly entrenched incumbent vendors and startups alike.

Technological complexity could become a major impediment to realizing the promise and potential of 5G

TBR perspective

The 5G ecosystem remains in a pressure cooker. There is pressure on standards bodies and their constituencies, including vendors, operators, enterprises and governments, to rush forward with technology development and hurry infrastructure into the field. There is also pressure on these same stakeholders to figure out how to not only get that gear into the field at scale but how to monetize this new infrastructure.

Though the 5G bandwagon has remained cohesive thus far, increasing technological complexity could become a major impediment to realizing the promise and potential of 5G. Additionally, increased influence by enterprises and governments is adding more complexity to the fold.

It will likely take another year for the dust to settle on the specifications for 5G NR and the 5G core, two foundational technologies for 5G networks. A key takeaway from the 5G Summit is that, despite complexity challenges, incremental progress continues to be made in the development of 5G, and the 3GPP’s Release 16 remains on track to be completed by the end of this year, fulfilling the initial promise of 5G by providing a fully stand-alone system. Release 16 will also address some of the feature limitations in the Release 15 specifications.

The sixth annual 5G Summit, which was hosted by Nokia and New York University Tandon School of Engineering in Brooklyn, provided an overview of what happened in the 5G ecosystem over the past 12 months and delivered a forward-looking view into where companies and academia think the ecosystem is headed, even out to 6G.

5G market development (2017-2030)

5G market development (2017-2030) graphic

CSPs accelerate 5G deployment for traditional network use cases to realize the significant cost-efficiencies that are inherent in the technology

Though a viable business case for operators to grow revenue from 5G has yet to materialize (with the exception of fixed wireless broadband), the main driver to deploy 5G is to realize the efficiency gains the technology provides over LTE.

Operators in lead markets (U.S., China, Japan and South Korea) as well as a growing list of key operators in other developed markets have accelerated their 5G deployment timetables over the past year, primarily because 5G is a significantly more cost-effective solution to handle rising data traffic in their traditional connectivity businesses but also to remain competitive in their respective markets.

TBR expects most Tier 1 and some Tier 2 and Tier 3 wireless operators will have begun deployment of 5G by the end of 2022. This will be driven by the need to add capacity to support growing data traffic and to tap into new revenue opportunities brought on by emerging use cases for the network that materialize in the 5G era.

TBR expects new, economically supported use cases for the network will arise in the early to mid-2020s, particularly around advanced IoT services, which will drive another wave of 5G investment.

Customers care less, vendors buy more, and both sides become more intelligent

An exclusive review of TBR’s 2019 Cloud Predictions

The entire cloud market is becoming more defined, consolidated and focused on the business value being delivered. This increasing maturity is prompting acquisitions by leading vendors, which will intensify in 2019. Not only are big purchases being integrated, but more large purchases will be announced in the race to meet rising customer investment in cloud solutions. Even as customers spend more on cloud, they increasingly care less about the specific delivery method, resulting in widespread hybrid implementations. Lastly, the rise of integrated analytics, artificial intelligence (AI) and machine learning will move customers further along in their journeys to transform their processes and technology to become more intelligent businesses.

Join Allan Krans, Cassandra Mooshian, Meaghan McGrath and Jack McElwee as they dig into developments in the cloud market through 2018 and expectations for 2019.

Don’t miss:

  • The risk and reward for additional cloud acquisitions
  • How customer decision making is evolving to focus more on outcomes than delivery methods
  • How the integration of emerging analytics and AI technologies is helping customers implement more intelligent solutions and growing revenue streams for vendors

 

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed at anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].