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Oct
9
Veeam Vanguard Summit 2018 in Prague – Day 1 Summary
Posted by Thang Le Toan on 09 October 2019 09:40 AM

Today was our first day at the Veeam Vanguard Summit 2018 in Prague. All Vanguards were invited to join this special event. I can’t thank Veeam enough for this opportunity. I really appreciate your efforts to get all the Vanguards together, organize everything and sharing some real in-depth knowledge with us. Thank you very much!

Short intro about the Veeam Vanguard program

If you haven’t heard about the Veeam Vanguard program, then I can tell you something about it. There are a lot of expert and specialist programs in the tech community. Like VMware vExpert or Microsoft MVP to just name two of the bigger ones. All these programs are built on a strong and great community. People helping other people, learning, sharing knowledge. The Veeam Vanguard program goes in a similar direction, but from my personal point of view, this program is more exclusive. Currently, we’re roughly 60 people from all around the world, Australia, Germany, Liechtenstein, United States to just name a few countries. And chances are high that you might meet each Vanguard at least once in person. I really appreciate the time each one of the Vanguards is spending for the community, helping each other if there is an issue, or just having a nice chat.

But it’s not only the number of Vanguards. It’s also the way how a company like Veeam works together with the community, especially with the Vanguard community. We’ve got direct communication from the technologists at Veeam, we’re invited in several online conference calls to share knowledge and information about the product, some new and cool features. We’re also invited to give as much feedback as we like and as we can provide to probably make the product even better.

Veeam is sharing content and information with us Vanguards so that we are more or less on the same level of knowledge as their internal System Engineers. Sometimes we receive even a bit more information. But that’s highly NDA and we’re not allowed to share it. We have also the possibility to test some of the beta versions and give direct feedback to the team. And believe me when I say that Veeam is a company that listens to the customers and to the Vanguards!

But let’s now dive a little into the green content. There are three colors of content. Green which is fine to share, yellow which is embargoed (to be shared on a later date) and red which is highly NDA. I’m sorry folks, there’s only green content 

Day 1 summary

Rick Vanover welcomed us to the Vanguard Summit in Prague. He brought most of his team also to the summit so we can get the best information and many great discussions. There were many already known people in his team, but also some new members. Welcome at Veeam, ladies, and gentlemen!

As an icebreaker, Rick gave us a microphone to introduce our self to our Vanguard colleagues. There are so many great people here in this program, partners, customers, and vendors, all with an in-depth knowledge in the technical field of virtualization, storage, networking and so on.

Rick shortly mentioned some of the benefits (yes, there’s Vanguard swag too) of the program. Vanguards can get some NFR licenses of the Veeam products, but also other vendors like HPE and Nimble are offering some NFR stuff. That’s great if you’re running a home lab and you like to test some stuff (and perhaps blog about it).

After the icebreaker, we were searching a charter for our Vanguard program. How would you explain the program to others? That was the question. There were many great ideas and it’s now up to the Vanguard organizational team to put some of the best ideas together.

Veeam Backup for Microsoft Office 356

Mike Resseler was presenting us some stuff about Veeam Backup for Office 365. To be honest, there was much red content, so I’m sorry again, here’s only green content for you 

Version 2 of Veeam Backup for Office 365 is out and available. It supports OneDrive for Business, SharePoint Online and also Exchange Online. There are also new and improved Veeam Explorers integrated. It’s recommended that you install Veeam Backup & Replication and Veeam Backup for Microsoft Office 365 not on the same backup server because the Veeam Explorers are a little bit different between these two products. That could probably cause issues.

What is an object and what is a user? A user is a combination of four objects:

  • Mailbox
  • Archive
  • OneDrive for Business
  • Personal SharePoint site

In case you’re planning to setup Veeam Backup for Microsoft Office 365, hopefully, these numbers will help you with the sizing of your backup infrastructure.

In case you need help to size for Exchange Online, probably that “formula” can help you to do that. Just provide the correct numbers:

(current primary mailbox total size) + ((daily ChangeRate * 2) * (days of retention))
+ (10% working area)

Veeam Availability Suite

One of the coolest things in my point of view, which will come with update 4 of Veeam Backup & Replication 9.5 is the capacity tier. Yes, Veeam is soon able to auto-tier your backup files! How cool is that?

You can add any Azure Blob storage, Amazon S3 or other S3 compatible storage (for sure at Azure or Amazon or also on-premises) to Veeam as a capacity tier repository. That means that not all of your backups are stored on-premises, but you can offload them to Azure Blob storage or Amazon S3.

That, in turn, means that the Veeam Scale-out Backup Repository comes close to infinite storage space! You’ve got your small but very fast repositories onsite to have a fast restore option of the most recent version of a VM, for example. You’ve got probably also some slower repositories with more space with a little less performance. And you probably have also a deduplication appliance to have a long-term retention of (some of) your VMs.

And there’s the S3 capacity tier which will be introduced in update 4. This is a policy-driven repository where you can offload your backups for a long-term retention and also save costs. Just in case, it is possible to do an Instant VM Recovery directly from AWS to your infrastructure!

Conclusion

We received so much information today! At least some of my personal highlights are mentioned above, and I can’t wait to get my hands on the update as soon as it will be released. The support of Azure Blob storage or Amazon S3 is a great improvement. It can save you real money because you don’t have to buy a lot of (expensive) storage hardware, but you can just offload your backups to a nearly unlimited online storage.


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Oct
6
How to Parse Custom JSON Data using Excel
Posted by Thang Le Toan on 06 October 2019 01:42 PM

Parse Custom JSON data is to split out its name/value pairs into a more readable useable format.

Excel is a powerful tool that allows you to connect to JSON data and read it.  However sometimes this data might require a little manipulation to be fully understood and analysed in Excel. 

In this article you will learn

  • What is JSON Data
  • To Connect to JSON data from Excel
  • How to Parse simple JSON Data using Excels Power Query
  • To Parse complex JSON Data using Excels Power Query

This article contains data tables to download so you can practice along and master the art of parsing custom JSON data using Excel.  We are also powered with STEEM so you can earn while you learn .  If you are not familiar with Excel Power Tools you can find out about them here.

What is JSON Data?

JSON data is a way of representing objects or arrays.  It is easy to read, and it is easy to parse, even with Excel.  Many API calls will return JSON format and many web apps use JSON which easily moves information around the internet.

The syntax for JSON comes from JavaScript and can be summarized as follows:

  • Data is shown in name/value pairs separated by : For example “name” : ”paulag”
  • Data is separated by commas. For Example “name” : ”paulag” , “Sex” : “Female”
  • Curly brackets represent an object. An object being a name/value pair separated by a comma. For Example {“name” : ”paulag” , “Sex” : “Female”}
  • Square brackets hold arrays and contains a list of values separated by a comma.

For a simple example we are going to look at http://54.72.28.201/1.0/population/World/today-and-tomorrow/?format=json

If you enter this to your browser you will get something similar to the below:

How to Parse Custom JSON Data using Excel{“total_population”: [{“date”: “2019-01-02”, “population”: 7638335801}, {“date”: “2019-01-03”, “population”: 7638557789}]}

{“total_population”: This shows the first object, which is a name/value pair.  The name of the object is total_population

[{“date”: “2019-01-02”, “population”: 7638335801}, {“date”: “2019-01-03”, “population”: 7638557789}]}  This is the value for the total population. The [ represents an array.  This array contains two objects. The objects are defined within the curly brackets and separated with a comma. Each object contains 2 lots of data (name/value pair) also separated with a comma.  The data, shown in the name/value pairs, in this example is date and population.

Connecting to JSON data from Excel

In Excels Data ribbon, under GET and Transform Data, we have the option of connecting to data of multiple sources and multiple types. 

If we select Get data from file, we will then have the option to get data from a JSON file. 

In this example we have URL API endpoint, therefore, from the Data Ribbon we can select,  Get data from Web.  This will open a dialogue box in which you place the URL. Next,  Power query will then open.  Power query is a magic excel tool that will allow you transform data that you connect to into a usable format.

gif_1_Analysing Custom JSON Data in Excel

The JSON data will appear as a list or a record in Power Query. So, for excel to read this, we must convert a list to a table. We must select ‘Into table’ from the available option. Next, Power query will create a table and you will see this step appear on the right of the power query window under applied steps.

This new table contains a Name and a Values column.  The values column is comprised of a list. Therefore, We must expand the values in this list to access them.  To do this, right click on the arrows in the column header and select Expand to New Rows.

This will reveal there are two records. We must now right click on the arrows in the column header.  By doing so this will reveal the columns in the records.  Next Tick the boxes of the columns you want.

We now have 3 columns of data and two rows.  Each row being a separate record in the dataset, or the object total_population.

gif_2_Analysing Custom JSON Data in Excel

When working with Power Query, its important to make sure you have the correct data types set.  In this example we can see the data type for Value.date column is set to any.  From the transform ribbon, select Date from the data type dropdown.  We can also change the data type for Value.population to whole number.

To work with this data we must now move to from Power Query to Excel.  If we select File, and then select Close and load, this will load the data as a table in Excel.  Or, If we select or Close and Load to, the data will be loaded into a Power Pivot Model.  

How to Parse JSON Data in Excel

Very often when you access JSON data with Excel it appears in 1 column.  This can happen for many reasons and is often the design of a database.

Look at the image below.  We can see the json_metadata field is still in its JSON syntax

How to Parse Custom JSON Data using Excel

When we encounter data like this, we can easily parse the column into its components.  From the image below we see we have 4 components. We have An Array, an Object, the data, and one of the data fields contains an array.

How to Parse Custom JSON Data using Excel

STEP by STEP

Download this file.  It contains a table as shown below.  (do not copy and paste the table as the JSON field will not be recognised.) 

tx_id

tid

json_metadata

timestamp

647524676

follow

[“follow”,{“follower”:”mervin-gil”,”following”:”jarvie”,”what”:[“blog”]}]

43466.89097

647524682

follow

[“follow”,{“follower”:”steliosfan”,”following”:”michealb”,”what”:[“blog”]}]

43466.89097

647524833

follow

[“follow”,{“follower”:”eugenezh”,”following”:”zentricbau”,”what”:[“blog”]}]

43466.89097

647524855

follow

[“follow”,{“follower”:”bitcoinportugal”,”following”:”manuellevi”,”what”:[]}]

43466.89097

647525074

follow

[“follow”,{“follower”:”eugenezh”,”following”:”adriellute”,”what”:[“blog”]}]

43466.89167

647525089

follow

[“follow”,{“follower”:”bigbigtoe”,”following”:”hoxly”,”what”:[“blog”]}]

43466.89167

647525121

follow

[“follow”,{“follower”:”mervin-gil”,”following”:”loveon”,”what”:[“blog”]}]

43466.89167

647525159

follow

[“follow”,{“follower”:”mervin-gil”,”following”:”pechichemena”,”what”:[“blog”]}]

43466.89167

647525233

follow

[“follow”,{“follower”:”imealien”,”following”:”pataty69″,”what”:[“blog”]}]

43466.89167

647525652

follow

[“follow”,{“follower”:”mervin-gil”,”following”:”kamile”,”what”:[“blog”]}]

43466.89236

647525818

follow

[“follow”,{“follower”:”bitcoinportugal”,”following”:”drmake”,”what”:[“blog”]}]

43466.89236

647525886

follow

[“follow”,{“follower”:”mervin-gil”,”following”:”bradfordtennyson”,”what”:[“blog”]}]

43466.89236

647525980

follow

[“follow”,{“follower”:”a0i”,”following”:”shoemanchu”,”what”:[“blog”]}]

43466.89236

647526007

follow

[“follow”,{“follower”:”voteme”,”following”:”kostyantin”,”what”:[“blog”]}]

43466.89236

648215552

follow

[“follow”,{“follower”:”ansie”,”following”:”hoxly”,”what”:[“blog”]}]

43467.75833

648215582

follow

[“follow”,{“follower”:”ashokcan143″,”following”:”abcor”,”what”:[]}]

43467.75833

648215691

follow

[“follow”,{“follower”:”ashokcan143″,”following”:”abasinkanga”,”what”:[]}]

43467.75903

648215820

follow

[“follow”,{“follower”:”nongvo.piy”,”following”:”acidyo”,”what”:[]}]

43467.75903

648215859

follow

[“follow”,{“follower”:”grid9games”,”following”:”yeninsfer”,”what”:[“blog”]}]

43467.75903

648215945

follow

[“follow”,{“follower”:”nongvo.piy”,”following”:”acidyo”,”what”:[“blog”]}]

43467.75903

Click on any of the cells that contain the data and from the Data Ribbon select FROM Table/Range

How to Parse Custom JSON Data using Excel

If your data is not in table format, Excel will then prompt you to create a table.  Select the cells the contain the data and tick the box to say that your table has headers.

How to Parse Custom JSON Data using Excel

Power Query editor window will open. On the canvas you can see your data and, on the right, you can see any transformation steps that have taken place.

How to Parse Custom JSON Data using Excel

To parse the json column, first select the column, then on the Transform Ribbon select Parse and select JSON

How to Parse Custom JSON Data using Excel

Power query will recognise the first [ and create a list format.  Next, we need to expand this list to new rows.  To do this click on the arrows on the top of the column and select Expand to New Rows.

How to Parse Custom JSON Data using Excel

What is returned is two lines for each tx-id.  The json column now has a row for the name of the array, which is follow, and a record.  The record will contain the data.

How to Parse Custom JSON Data using Excel

As we do not need the name of the array, we can use the filter to remove all the follow rows

How to Parse Custom JSON Data using Excel

We are now left with the records. We can expand this record, by pressing the arrow on the column.  From here we see we have the names of 3 data fields, Follower, Following and What

How to Parse Custom JSON Data using Excel

When we select OK, we get a new column in our data table for each data field.

However, the field named what contains an array, which is again shown as a list (or array) which needs to be expanded

How to Parse Custom JSON Data using Excel

Once we expand this, we are at the end of the JSON data and have extracted the relevant columns.  You can now use this data for further analysis in Excel or Power Pivot.  To load it back to excel, select File and Close & Load.

How to Parse Custom JSON Data using Excel

More complex JSON data extractions in Excel

So far, we have looked at getting JSON data into Power Query using an Excel table and directly from a URL.  There are other ways you can connect to JSON data including connecting directly to a JSON file.  Connecting is the easy part.  Things get more complicated when you have JSON columns where the strings are different in each row.  One might start with an array and so return a list, but some might start with an object and return a record.  

In Power Query lists are expanded to new rows in the table and records are expanded to new columns. Parsing custom JSON data in Excel can require some thinking.

Learn and Earn Activity

Look at this small table of data.  You can download the file with this link to carry out this Learn and Earn Activity.  This is more complex custom JSON data that can be parsed in Excel with Power query.

The JSON column has varied lengths and objects and strings.  How would you go about parsing this custom JSON data so that it is all available in one table?

It does require logical thinking and little more Power Query knowledge than what we have covered here but I know you can get it.  Also, there is more than one way to come up with the solution.

Post your solutions in the comments section below.  If you get stuck, post a comment letting me know where you are stuck and what problems you encounter.

The video below shows how you can parse simple JSON data using Excel Power Query and how you can parse custom JSON data as detailed in the activity.


Read more »



Sep
27
Annual Report 2018 - JPMorgan Chase & Co
Posted by Thang Le Toan on 27 September 2019 03:26 AM
Chairman and CEO Letter to Shareholders

Dear Fellow Shareholders,

Once again, I begin this annual letter to shareholders with a sense of pride about our company and our hundreds of thousands of employees around the world. As I look back on the last decade — a period of profound political and economic change — it is remarkable how much we have accomplished, not only in terms of financial performance but in our steadfast dedication to help clients, communities and countries all around the world.

In 2018, we continued to accelerate investments in products, services and technology. For example, for the first time in nearly a decade, we extended our presence in several states with new Chase branches (we plan to open another 400 new branches in the next few years). In addition, we started a new digital investing platform: You Invest; we launched our partnership with Amazon and Berkshire Hathaway in healthcare; we broadened our commitment to create opportunities for jobs and prosperity and reduce the wealth gap for black Americans with Advancing Black Pathways (announced in February 2019); and we launched our AdvancingCities initiative to support job and wage growth in communities most in need of capital. While it is too soon to assess the impact of these efforts, we’re seeing terrific results so far.

2018 was another strong year for JPMorgan Chase, with the firm generating record revenue and net income, even without the impact of tax reform. We earned $32.5 billion in net income on revenue footnote1 of $111.5 billion, reflecting strong underlying performance across our businesses. Adjusting for the enactment of the Tax Cuts and Jobs Act, we now have delivered record results in eight of the last nine years, and we have confidence that we will continue to deliver in the future. Each line of business grew revenue and net income for the year while continuing to make significant investments in products, people and technology. We grew core loans by 7%, increased deposits in total by 3% and generally grew market share across our businesses, all while maintaining credit discipline and a fortress balance sheet. In total, we extended credit and raised capital of $2.5 trillion for businesses, institutional clients and U.S. customers.

In last year’s letter, we emphasized how important a competitive global tax system is for America. Over the last 20 years, as the world reduced its tax rates, America did not. Our previous tax code was increasingly uncompetitive, overly complex, and loaded with special interest provisions that created winners and losers. This drove down capital investment in the United States, which reduced domestic productivity and wage growth. The new tax code establishes a business tax rate that will make the United States competitive around the world and frees U.S. companies to bring back profits earned overseas. The cumulative effect of capital retained and reinvested over many years in the United States will help cultivate strong businesses and ultimately create jobs and increase wages.

For JPMorgan Chase, all things being equal (which they are not), the new lower tax rates added $3.7 billion to net income. For the long term, we expect that some or eventually most of that increase will be erased as companies compete for customers on products, capabilities and prices. However, we did take this opportunity in the short term to massively increase our investments in technology, new branches and bankers, salaries (we now pay a minimum of $31,000 a year for full time entry-level jobs in the United States), philanthropy and lending (specifically in lower income neighborhoods).

Earnings, Diluted Earnings per Share and Return on Tangible Common Equity 2004–2018 graph
Tangible Book Value and Average Stock Price per Share 2004–2018 graph

As you know, we believe tangible book value per share is a good measure of the value we have created for our shareholders. If our asset and liability values are appropriate — and we believe they are — and if we can continue to deploy this capital profitably, we think we can continue to exceed 15% return on tangible equity for the next several years (and potentially at or above 17% in the near term), assuming there is not a significant downturn. If we can earn these types of returns, our company should ultimately be worth considerably more than tangible book value. The chart above shows that tangible book value “anchors” the stock price.

Bank One/JPMorgan Chase & Co. tangible book value per share performance vs. S&P 500 Index

In the last five years, we have bought back almost $55 billion in stock or approximately 660 million shares, which is nearly 20% of the company’s common shares outstanding. In prior letters, I explained why buying back our stock at tangible book value per share was a no-brainer. Seven years ago, we offered an example of this: If we bought back a large block of stock at tangible book value, earnings and tangible book value per share would be substantially higher just four years later than without the buyback. While we prefer buying back our stock at tangible book value, we think it makes sense to do so even at or above two times tangible book value for reasons similar to those we’ve expressed in the past. If we buy back a big block of stock this year, we would expect (using analysts’ earnings estimates) earnings per share in five years to be 2%–3% higher and tangible book value to be virtually unchanged. We want to remind our shareholders that we much prefer to use our capital to grow than to buy back stock. I discuss stock buybacks later in this letter.

Stock total return analysis

While we don’t run the company worrying about the stock price in the short run, in the long run our stock price is a measure of the progress we have made over the years. This progress is a function of continual investments, in good and bad times, to build our capabilities — our people, systems and products. These important investments drive the future prospects of our company and position it to grow and prosper for decades. Whether looking back over five years, 10 years or since the JPMorgan Chase/Bank One merger (approximately 14 years ago), our stock has significantly outperformed the Standard & Poor’s 500 Index and the Standard & Poor’s Financials Index. And this growth came during a time of unprecedented challenges for banks — both the Great Recession and the extraordinarily difficult legal, regulatory and political environment that followed.

JPMorgan Chase stock is owned by large institutions, pension plans, mutual funds and directly by individual investors. However, it is important to remember that in almost all cases, the ultimate beneficiaries are individuals in our communities. Well over 100 million people in the United States own stock, and a large percentage of these individuals, in one way or another, own JPMorgan Chase stock. Many of these people are veterans, teachers, police officers, firefighters, retirees, or those saving for a home, school or retirement. Your management team goes to work every day recognizing the enormous responsibility that we have to perform for our shareholders.

In the first section of this letter, I try to give a comprehensive understanding of how we run our company, including how we think about building shareholder value for the long run. In that section, I highlight our strong belief that building shareholder value can only be done in conjunction with taking care of employees, customers and communities. This is completely different from the commentary often expressed about the sweeping ills of naked capitalism and institutions only caring about shareholder value.

In the second section of this letter, I comment on important forward-looking issues. While we remain optimistic about the long-term growth of the United States and the world, the near-term economic and political backdrop is increasingly complex and fraught with risks — both known and unknown. And we face a future with less overall confidence in virtually all institutions, from corporations to governments to the media. The extremely volatile global markets in the fourth quarter of 2018 might be a harbinger of things to come — creating both risks for our company and opportunities to serve our clients.

The third section of this letter is about public policy, specifically American public policy, which is a major concern for our country and, therefore, our company. Again, I try to give a comprehensive, multi-year overview of what I see as some of our problems and suggest a few ways they can be addressed. One consistent theme is completely clear: Businesses, governments and communities need to work as partners, collaboratively and constructively, to analyze and solve problems and help strengthen the economy for everyone’s benefit.

I. JPMorgan Chase Principles and Strategies

  1. First and foremost, we look at our business from the point of view of the customer.
  2. We endeavor to be the best at anything and everything we do.
  3. We will maintain a fortress balance sheet — and fortress financial principles.
  4. We lift up our communities.
  5. We take care of our employees.
  6. We always strive to learn more about management and leadership.
  7. We do not worry about some issues.

II. Comments on Current Critical Issues

  1. We need to continue to restore trust in the strength of the U.S. banking system and global systemically important financial institutions.
  2. We have to remind ourselves that responsible banking is good and safe banking.
  3. We believe in good regulation — both to help America grow and improve financial stability.
  4. We believe stock buybacks are an essential part of proper capital allocation but secondary to long-term investing.
  5. On the importance of the cloud and artificial intelligence, we are all in.
  6. We remain devoted and diligent to protect privacy and stay cyber safe — we will do what it takes.
  7. We know there are risks on the horizon that will eventually demand our attention.
  8. We are prepared for — though we are not predicting — a recession.

III. Public Policy

  1. The American Dream is alive — but fraying for many.
  2. We must have a proper diagnosis of our problems — the issues are real and serious — if we want to have the proper prescription that leads to workable solutions.
  3. All these issues are fixable, but that will happen only if we set aside partisan politics and narrow self-interest — our country must come first.
  4. Governments must be better and more effective — we cannot succeed without their help. The rest of us could do a better job, too.
  5. CEOs: Your country needs you!
  6. America’s global role and engagement are indispensable.

I. JPMorgan Chase Principles and Strategies

In this section, I want to give the reader a comprehensive view of how we run the company. We manage the company consistently with these principles in mind – and they have stood the test of time. We also strive to satisfy, and even exceed, the requirements of our regulators and governments around the globe – and we think these principles are a critical component of that.

1. First and foremost, we look at our business from the point of view of the customer.

Customer needs are what gets our attention. We believe that in a hyper-competitive world (from competitors known and unknown), the best strategy – both offensive and defensive – is to give the customer more: something better, faster or more efficiently. We are always on a quest to improve our products and services, and, for the most part, this is done with enhancements in technology and through the continual training of our people. Most fundamental of all is doing the right thing for our customers – in all cases.

We energetically drive organic growth.

We continue to drive good and healthy organic growth (meaning good customers, products and services they need and want at fair and reasonable prices), and while we are happy with our progress, we recognize that we won’t meet every goal we set for ourselves and can always do better. In past letters, we have identified many areas of organic growth. Our achievements with these initiatives are detailed in the CEO letters in this Annual Report, but a few of the critical strategies are highlighted in the sidebar below.

Organic growth opportunities across our lines of business

Consumer & Community Banking

  • By 2022, we expect 93% of the U.S. population to be in our Chase footprint as we expand our branch network to new markets with an integrated physical and digital approach. In addition to entering the Washington, D.C., Philadelphia and Boston markets in 2018, we recently announced nine new markets for 2019, including Charlotte, Minneapolis, Nashville and St. Louis.
  • The onboarding experience for new customers is being simplified. Customers can open a new deposit account digitally in three to five minutes, functionality that added approximately 1.5 million new accounts since its February 2018 launch; we’re expanding this functionality inside our branches as well. We also recently announced Chase MyHome, our new digitally enabled mortgage fulfillment process that prefills applications for our existing customers. It’s 20% faster than our paper-based process, allowing us to close a mortgage within three weeks. Our confidence in our enhanced approach is reflected in our money-back guarantee.
  • Customers recently began receiving personalized merchant offers and discounts from ChaseOffersSM. This program ramped up rapidly, with customers activating 25+ million offers across 7 million cards in the initiative’s first three months. CreditJourneySM, with more than 15 million users enrolled, has also been a tremendously successful way to engage customers through access to credit score information and identity protection.
  • And later this year, we’ll make it easier for our credit card customers to borrow on their existing lines through two new products — My Chase PlanSM, allowing customers to finance a specific purchase at a reasonable cost at the point of sale; and My Chase LoanSM, letting customers borrow against their unused credit limit and pay back their debt in fixed amounts at a competitive rate. These products enable us to compete for the approximately $250 billion in card loans that our existing customers have with competitors.

Corporate & Investment Bank

  • We have been #1 in investment banking for the past decade and finished 2018 with 8.7% of global wallet share, the industry’s best. Still, we believe we can increase our share over time as we continue to add bankers selectively and leverage technology to provide better data and insights to our clients.
  • Our Treasury Services business grew revenue by 13% last year. As we further implement our wholesale payments model, which includes merchant services, we will be able to deliver a unique value proposition to our clients. We see opportunities in every customer segment from middle market and small businesses to large corporate clients and their business outside of the United States.
  • We have consistently grown share in Markets — including in businesses where the wallet has shrunk. We are prioritizing investments in products and technology to stay ahead of our clients’ needs. As companies expand their businesses and acquire assets — increasingly across borders — our global expertise in hedging risks and protecting capital can be as important to them as the actual acquisition.
  • Our Securities Services business has transformed itself into an industry powerhouse, and it sits alongside the world’s leading trading businesses. As asset managers face ongoing pressures from passive investing and margin compression in the coming years, we think we have a unique opportunity to help them become more efficient by outsourcing support functions and using our innovative technology platforms.
  • Our Corporate & Investment Bank is one of the few truly global businesses in the financial services industry. As emerging countries take their place on the global stage, we will be there to support them. The investments we are making in China and in other emerging markets today will result in our international growth for years to come.

Commercial Banking

  • Being able to deliver the broad-based capabilities of JPMorgan Chase at a very local level is a key competitive advantage. Since launching our Middle Market expansion efforts, we are now local in 39 new markets and have added 2,800 clients, resulting in 22% compounded revenue growth over the last three years. Our growth potential for Middle Market business isn’t just limited to our expansion markets. Through data-driven analysis, we’ve identified nearly 38,000 prospective clients nationally. Some of our most exciting opportunities are within our legacy markets like New York, Chicago, Dallas and Houston, where we have been for over a century.
  • Chase’s retail branch expansion amplifies our opportunity to deepen relationships with clients who already are in those markets by giving them access to branches and the additional resources that come with that access. In addition, the expansion opens the opportunity to serve more public sector customers in new U.S. markets through our Government Banking business, deepening community engagement and broadening our work with cities, states, public universities and other municipal clients.
  • Commercial Banking’s partnership with the Corporate & Investment Bank continues to be highly successful and is a key growth driver for both businesses. Being able to deliver the #1 investment bank locally enhances our strategic dialogue with our clients and separates us from our competitors. In 2018, 39% of the firm’s North America investment banking fees came from Commercial Banking clients, totaling $2.5 billion in revenue, up from $1 billion 10 years ago. We expect that number to continue to grow.

Asset & Wealth Management

  • We are using data and technology to transform how we interact with clients. By integrating our human expertise with distinctive digital offerings like You Invest, we have been able to attract new clients, 89% of whom are first-time investors with Chase.
  • We are expanding our footprint to capture more of the opportunity across the U.S. wealth management spectrum — from mass affluent ($500,000 to $3 million) to high-net-worth ($3 million to $10 million) to ultra-high-net-worth ($10 million or greater). By the end of 2019, we expect to have 6,500 advisors globally on the ground where our clients need us most.
  • We have continued to innovate our product lineup by adding 47 index funds and exchange-traded funds (ETF) over the last three years.

The charts below show JPMorgan Chase’s fairly consistent growth over the years. This kind of growth only comes from happy, repeat customers. They have plenty of other choices.

Client Franchises Built Over the Long Term
New and Renewed Credit and Capital for Our Clients at December 31
Assets Entrusted to Us by Our Clients at December 31, Deposits and client assets, Assets under custody
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2. We endeavor to be the best at anything and everything we do.

While we never expect to be best-in-class every year in every business, we normally compare well with our best-in-class peers. The chart below shows our performance generally, by business, versus our competitors in terms of efficiency and returns.

JPMorgan Chase Is in Line with Best-in-Class Peers in Both Efficiency and Returns

On an ongoing basis, we analyze and compare ourselves with our competitors at a very detailed level. The analysis we do is on more than 50 sub-lines of business and hundreds of products, incorporating not just financial data but also operational data, customer satisfaction and many other measures. Our management will always be very critical of its own performance: Acknowledging our shortcomings and mistakes and studying them intensely and learning from them make for a stronger company.

We also never lose sight of the fact that we have an extraordinary number of strong competitors – we cannot be complacent. There are many capable financial technology (fintech) companies in the United States and around the world – technology always creates opportunities for disruption. We have acknowledged that companies like Square and PayPal have done things that we could have done but did not. They looked at clients’ problems, improved straight through processing, added data and analytics to products, and moved quickly. We recently sent one of our senior teams to China to study what’s being achieved there with artificial intelligence (AI) and fintech, and it’s hard not to be both impressed and a little worried about the progress China has made – it made our management team even more motivated to move quickly. Suffice it to say, no matter what our current performance is, we cannot rest on our laurels.

3. We will maintain a fortress balance sheet — and fortress financial principles.

A fortress company starts with a fortress balance sheet.

You can see in the chart below that our balance sheet is extraordinarily strong.

Our Fortress Balance Sheet at December 31

We have an incredibly well-capitalized bank with enormous liquidity.

But a fortress balance sheet isn’t enough.

To be a fortress company, we believe that you also need to have strong, properly diversified earnings and margins. It is capital and liquidity combined with strong earnings and margins that provide the ability to withstand extreme stress. I want to remind shareholders that we run hundreds of stress tests internally each month, some of which are far more severe than the Federal Reserve’s (the Fed) annual stress test. We also believe that we should have strong earnings after making investments for the future – which may reduce earnings in the short run. We are cost- and capital-efficient; we rigorously allocate our capital; and we continually analyze our businesses, both to maximize their individual performance and to make sure they are contributing to the health of the whole company.

We like to use our capital to grow.

We much prefer to use our capital to grow than to buy back stock. We believe buying back stock should be considered only when either we cannot invest (sometimes as a result of regulatory policies) or we are generating excess capital that we do not expect to use in the next few years. Buybacks should not be done at the expense of investing appropriately in our company. Investing for the future should come first, and at JPMorgan Chase, it does.

However, when you cannot see a clear use for your excess capital over the short term, buying back stock is an important capital tool – as long as you are buying it back at a reasonable price. And when companies buy back stock (which we only do when it is at a price that we think adds value to our remaining shareholders), the capital is redistributed to investors who can put it to good use elsewhere. It does not disappear. We currently have excess capital, but we hope in the future to be able to invest more of it to grow our businesses.

Good financial management is also critical.

We have always believed that a deep and detailed understanding of a company’s financial and operational statements, including all assets and liabilities and all revenue and expenses (without netting and regardless of whether they are on- or off-balance sheet), is critical to running a safe and sound organization. However, accounting, and therefore earnings, is not a perfect measure of performance or economics. I would like to discuss a few reasons why:

  • Accounting rules can be counterintuitive, but you can't make business decisions based on them. While we are rigorous about proper accounting and disclosure, sometimes accounting can distort the actual economics of a business. A few examples will suffice. In credit card accounting, for instance, new card customer costs are expensed over the course of a year and inexplicably as a contra-revenue item (i.e., as a reduction of revenue rather than an expense). In addition, under upcoming accounting rules, losses that are expected over the life of the card balance are accounted for upfront. Meanwhile, the earnings from the card are booked over the life of the card, which averages approximately seven years. In connection with mortgage loans we don’t own but instead service (i.e., by sending statements and receiving payments on behalf of the mortgagor), the accounting standard requires that we present-value expected revenue and expenses and book everything upfront. But in cash management, asset management and many other products that have a similar, somewhat predictable annuity-like revenue stream, the practice is different. The reason I am making this point is that you need to understand the economics of decisions. Accounting can easily make people do silly things.
  • Conservative accounting is better. While we always try to make intelligent economic decisions, I do believe that appropriately conservative accounting is a better way to manage your business. For example, recognize problems early, write off software that is not valuable, don’t book revenue that is uncertain and so on. Aggressive accounting leads to trouble, and while it may help increase performance measures in the short run, it will most certainly be uncovered and reversed at precisely the wrong time.
  • Earnings guidance can be very damaging. Let’s be very clear: Transparency with shareholders, proper disclosures and guidance on certain revenue, expense and balance sheet items all are good. However, earnings themselves in any one quarter are a function of decisions made over many, many years. Quarterly earnings are dependent upon many factors, like cost of goods sold and market prices, which often change, as well as unexpected events, the weather, and wage and gross domestic product (GDP) growth. No CEO can predict all of those things, and any analyst with an earnings estimate has made his or her own specific assumptions around them.

    The real damage to an organization comes from the cumulative corrosiveness of trying to “make” its numbers. This can be exacerbated by compensation deals and models that can be manipulated to change quarterly results. It’s easy to change earnings in a quarter by doing stupid things that help earnings in the short term but are bad in the long term. Examples include asking customers to inappropriately buy more products before the end of the quarter so you can show revenue growth, reducing marketing, not opening that new branch or not investing in technology that won’t have a payback for a year or two. I could go on and on. And this could spiral within a company, as loyal, well-meaning employees do what they can to help a company meet its "earnings goal."

Importantly, in the next section, I speak in detail about responsible banking, client selection and intensive risk management. Proper management is as critical as anything else we do, but I did not want to repeat the messages here.

4. We lift up our communities.

We will never forget that the most important thing we do is to run a healthy and vibrant company that is here to constantly serve our clients with responsible banking. But we want our shareholders and all of our constituents to understand the tremendous amount we do, in addition to traditional banking, to help the communities in which we operate.

Our effort is substantial, permanent and supported by the whole company.

One of the reasons for JPMorgan Chase’s enduring success is we have always recognized that long-term business success depends on community success. When everyone has a fair shot at participating in and sharing in the rewards of growth, the economy will be stronger and our society will be better. We are making significant, long-term, data-driven business and philanthropic investments aimed at opening doors to opportunity for those being left behind.

Most people consider corporate responsibility to be enhanced philanthropy. While we are devoted to philanthropy (we are on our way to spending $350 million a year on these efforts), corporate responsibility is far more than just that. We finance more than $2 billion in affordable housing each year; we do extensive lending in low- and moderate-income neighborhoods; we lend to and finance small businesses around the country; and we design products and services in financial education for lower income individuals. And importantly, these efforts are supported by senior leadership, managed by some of our best people (these efforts are not an afterthought) and are sustainable. We try to be creative, but we analyze everything, including philanthropy, based on expected results.

We are huge supporters of regional and community banks, which are critical to many cities and small towns around the country.

In an op-ed published by The Wall Street Journal in 2016, I wrote: "In this system, regional and smaller community banks play an indispensable role. They sit close to the communities they serve; their highest-ranking corporate officers live in the same neighborhoods as their clients. They are able to forge deep and long-standing relationships and bring a keen knowledge of the local economy and culture. They frequently are able to provide high-touch and specialized banking services." JPMorgan Chase, as a traditional “money center bank” and “bankers’ bank,” in fact, is the largest banker in America to regional and community banks. We bank approximately 530 of America’s 5,200 regional and community banks. In 2018, we made loans to them or raised capital for them totaling $4 billion. In addition, we process payments for them, we finance some of their mortgage activities, we advise them on acquisitions, and we buy and sell securities for them. We also provide them with interest rate swaps and foreign exchange both for themselves – to help them hedge some of their exposures – and for their clients.

Over the past five years, we have developed and refined a model that may be a blueprint for urban revitalization and inclusive growth. Our head of Corporate Responsibility describes our significant measures in more detail in his letter, but I highlight a few examples here, including the sidebar below that describes our focused effort to support black advancement in a number of the communities we serve:

  • Detroit exemplifies the challenges many cities wrestle with, as well as the strategies for solving them. Since 2014, JPMorgan Chase has been combining its philanthropy and business expertise to address some of Detroit’s biggest economic hurdles, ranging from catalyzing development, building infrastructure and affordable housing, and boosting small business growth to revitalizing education and preparing Detroiters with the skills to secure well-paying jobs. We are deeply proud of our $150 million commitment and the impact we have made to date – the city has been the proving ground for our model for driving inclusive growth, which has made a real difference in Detroit’s comeback and the lives of its citizens. Over the past five years, we have taken lessons learned and applied them to other cities facing similar challenges.
  • The Entrepreneurs of Color Fund (EOCF) is another example of how we are turning our insights into action. In 2015, JPMorgan Chase helped launch the Entrepreneurs of Color Fund in Detroit to provide underserved entrepreneurs with access to capital and assistance needed to grow and thrive. From 2015 to 2018, the fund made or approved loans totaling $6.6 million to 79 minority small businesses, resulting in over 830 new or preserved jobs. Since then, the Detroit fund has more than tripled in size to over $22 million. Building on the success of Detroit’s EOCF, we expanded this model to San Francisco, the South Bronx, the Greater Washington region and Chicago, where it is also making a real impact. In total, these funds are now approximately $40 million and growing.
  • In 2018, we launched AdvancingCities, JPMorgan Chase’s $500 million, five-year initiative to drive inclusive growth in cities around the world. Through this effort, we are combining our business and philanthropic resources and expertise to expand opportunity for those being left behind in today’s economy. This is a global program. Marking our firm’s 150th anniversary in France last year, we announced a $30 million, five-year commitment – the first AdvancingCities investment – to support underserved small businesses and provide skills training to residents in Seine-Saint-Denis and other areas in Greater Paris with high levels of poverty and unemployment.
  • Our recent $350 million New Skills at Work commitment is focused on how we prepare people to succeed in our transformed workplaces and changing global economy. Over the past five years, we have supported worker education and training around the world – collaborating with nearly 750 partners and nonprofits in 37 countries and 30 U.S. states, affecting 150,000 individuals. We are now bolstering our strategy by promoting better ways for business and education to collaborate, scaling the best education and job training programs.

While we know a fundamental disconnect still remains between business and the average citizen, we also believe that the only solution is to remain relentless in our efforts to earn trust from every customer in every community. We believe that is the best we can do. As the largest financial institution in the country, JPMorgan Chase understands our responsibility to earn public trust with everyone, every day.

ADVANCING BLACK PATHWAYS: from an op-ed that originally ran on CNN Business

Mellody Hobson and Jamie Dimon:
Black Americans are still worse off financially. Businesses can help.

For all the positive economic trends in America, the racial wealth gap continues to prevent growth from benefiting everyone. While this is not a new crisis, it is one we must urgently address so that economic opportunity is equally extended to black Americans.

Racism, intolerance, and poverty strangle economic opportunity. The racial wealth gap is stark: For single black Americans, the median wealth is $200 to $300, compared to $15,000 to $28,000 for single white Americans. This divide undermines financial stability for many black Americans.

Closing the racial wealth gap is good for Americans, and it makes good business sense. We know employees from diverse backgrounds offering different perspectives drive better corporate outcomes. A recent study showed that businesses with diverse leadership generate 19% more revenue than non-diverse companies.

Diversity can also reduce turnover. Nearly seven in 10 millennials reported they would continue to work at a company for five or more years if it is diverse.

As leaders in business as well as the broader community, we know we have a responsibility to society. Not to mention, as financial services executives, we can help to foster widespread prosperity.

To this end, we have both worked to empower black Americans to achieve personal and professional success. For example, After School Matters, a nonprofit founded in 2000, provides enrichment programs to thousands of inner-city high school students in Chicago. Meanwhile, JPMorgan Chase’s Fellowship Initiative, founded in 2010, offers hands-on college access and academic support to young men of color in Los Angeles, New York, Chicago and Dallas. The scale and success of these efforts are impressive — but not enough. There is much more work to be done.

Recently, we announced Advancing Black Pathways — a new program at JPMorgan Chase that seeks to build on existing efforts to bridge the racial wealth divide and ultimately help black families build wealth. We urge more businesses to join us as we attempt to close this divide.

Our current initiative, Advancing Black Leaders, seeks to hire and promote more black senior executives and junior-level employees at JPMorgan Chase. We know investing in our employees is key to our company’s future. In addition to recruiting more African-American leaders, we also need to focus on retaining them. Since 2016, the firm has increased the number of black managing directors by 41% and black executive directors by 53%. A good start — but just the beginning.

Advancing Black Pathways will create a dedicated talent pipeline that will start young black professionals on an early career path and foster a corporate culture that further encourages diversity at all levels. We plan to hire more than 4,000 black students in full-time positions, apprenticeships, and internships over the next five years. JPMorgan Chase will also help create job training programs that are aligned with growing industries in the broader communities we serve.

We are also investing in the financial success of black Americans through a focus on savings, homeownership, and entrepreneurship. For example, the largest wealth gaps lie in racial disparities among entrepreneurs. If people of color owned businesses at the same rates as whites, 9 million more jobs and $300 billion in income would be created.

As part of this effort, we are helping to create a $6.65 million Entrepreneurs of Color Fund with local partners in the Washington, D.C. region to expand access to capital, improve business services, and streamline supplier diversity programs for small, minority-owned businesses. To date, we have launched similar low-cost loan funds in four other U.S. cities, bringing other investors to the table, and leveraging nearly $40 million to support underserved entrepreneurs. Thus far, Entrepreneurs of Color Funds have created or saved more than 1,200 jobs in critical neighborhoods lacking needed resources to grow.

Businesses of every size have an important role to play in expanding opportunity. By working together, we can give people a fair and equal chance to succeed, no matter their zip code or skin color.

Reprinted with permission from cnn.com

When disaster strikes, we give special care to our customers.

When disaster strikes – we are there for our customers. After Hurricane Florence and Hurricane Michael devastated the Carolinas and the Gulf Coast, respectively, after wildfires destroyed large parts of California and after a number of other tragic events, we stepped up for our communities and our customers. We also provided relief to customers affected by the recent government shutdown – and kept at it until they received their back pay. Here’s a list of the kinds of things we did when disaster struck:

  • Re-entered damaged areas, often as the first bank, filling our ATMs and quickly reopening our branches to give customers access to cash, as well as crucial documents in their safe deposit box.
  • Activated our special-care line with specialists to quickly help customers.
  • Refunded customers’ overdraft fees.
  • Extended and deferred payments on customers’ car loans.
  • Provided necessary relief on customers’ mortgage loans.
  • Removed minimum payments on credit cards, reducing cash payments and limiting the impact on customer credit reports.
  • In addition, in 2018, donated more than $4 million to emergency assistance agencies around the world, which included immediate help following the earthquake and tsunami in Indonesia, wildfires in Greece, and devastating floods and landslides in western Japan.
  • Over the past five years, contributed more than $22 million to support immediate and long-term recovery from disasters.

5. We take care of our employees.

Our employees are fundamental to the vibrancy and success of our company. At the end of the day, everything we do – from operations and technology to service and reputation – is completely based upon the abilities and character of our employees.

Inclusion and diversity

  • We have more than 256,000 employees globally, with over 170,000 in the United States. Our commitment to creating an inclusive organization is not only about doing the right thing; it’s about doing what makes our company stronger. In 2016, we introduced Advancing Black Leaders, an expanded diversity strategy focused on increased hiring, retention and development of talent from within the black community. We magnified that effort in 2019 with our Advancing Black Pathways initiative (which is outlined in the sidebar above). Now, in the United States, 50% of our firm’s workforce is ethnically diverse. That said, we know we have work to do to increase the representation of ethnically diverse employees at senior levels of the company.
  • On gender diversity, women represent 30% of our firm’s senior leadership globally. These are women who run major businesses and functions – several units on their own would be among Fortune 1000 companies. Investing in the advancement of women is a key focus for our company, and we have established a global firmwide initiative called Women on the Move that empowers female employees, clients and consumers to build their career, grow their businesses and improve their financial health.
  • To encourage diversity and inclusion in the workplace, we have 10 Business Resource Groups (BRG) across the company to connect approximately 100,000 participating employees around common interests, as well as foster networking and camaraderie. Groups are defined by shared affinities, including race and cultural heritage, generation, gender, sexual orientation, disability and military status. For example, some of our largest BRGs are Adelante for Hispanic and Latino employees, Access Ability for employees who have a disability, AsPIRE for Asian and Pacific Islander employees, NextGen for early career professionals, PRIDE for our LGBT+ employees, BOLD for black employees and Women on the Move, our largest group, which has more than 30,000 members globally.

Wages

  • We have been raising wages for our 22,000 employees at the lower end of the pay range. For those earning between $12 and $16.50 an hour in the United States, we have been increasing hourly wages to between $15 and $18, depending on the local cost of living. For employees making $40,000 a year or less in the United States, our average pay increases are around $4,800. This is the right thing to do, and we now offer well above the average hourly wage for most markets. Remember, these jobs are often the first rung on the ladder, and many of these employees soon move on to higher paying positions.
  • These increases are on top of the firm’s comprehensive benefits package, with an average value of $12,000 for employees in the lower wage tier.

401(k) — Retirement

  • We provide comprehensive retirement benefits, including a competitive 401(k) plan and dollar-for-dollar match on 5% of pay. For 2018, the 401(k) plan match, totaling approximately $482 million, enhanced the retirement savings of 135,000 employees.
  • We recognize that many employees who earn under $60,000 a year often do not invest in a 401(k) plan because they cannot afford the lost cash flow and, therefore, do not receive the match. For these employees, we make a discretionary $750 Special Award to them. This provided 56,000 U.S. employees with $40 million in additional retirement funds – and this money is granted whether or not they make their own contribution to a 401(k) plan.

Health benefits and wellness programs

  • We offer a comprehensive health benefits package in the United States, including a medical plan that covers over 296,000 individuals (138,000 employees, 106,000 children and 52,000 spouses/domestic partners). In 2018, we covered $1.3 billion in medical costs (net of employee payroll contributions). We care very much about our employees’ health.
  • We subsidize the health benefit costs of lower wage earners up to 90% of the total cost – for higher paid employees, we subsidize approximately 60%. In addition, recognizing the hardship that deductibles cause for lower paid employees, effective January 1, 2018, we lowered the deductible in the medical plan by $750 for employees earning less than $60,000. For these employees, if they do their wellness screenings, their effective deductible could be zero.
  • Enrolled employees and spouses/domestic partners earned collectively about $100 million toward their Medical Reimbursement Accounts in 2018, funded by JPMorgan Chase, for completing wellness activities.
  • Outside the United States, we provide medical coverage to 80,000 employees and their families under local medical insurance plans.
  • 62% of employees around the globe have access to our 54 on-site Health & Wellness Centers, which are staffed with doctors, nurses, nurse practitioners and other health professionals. These centers are extensively visited – in excess of 600,000 encounters a year. And over 100 visits were potentially life-saving interventions (involving, for example, urgent cardiac or respiratory issues).

Training

  • We extensively invest in employee benefits and training opportunities so that our workers can continue to increase their skills and advance their career. Our total direct investment in training and development is approximately $250 million a year. What’s more important and hard to measure is the on-the-job training that just about every employee gets from their manager – education that leads to deep knowledge and promotion opportunities (and, unfortunately, lots of recruiting from our competitors). In 2018, we delivered 9 million hours of training to our employees worldwide, augmented by several new digital learning innovations.
  • Since inception of the program in 2015, 26,500 managers (approximately 60% of all managers) have attended one or more Leadership Edge programs. These offer critical training in leadership and management. While this initiative is costly, we are starting to see results in terms of reduced attrition, higher satisfaction from employees and better management.

Volunteer and Employee Engagement Paid Time Off policy

  • Effective January 1, 2019, we implemented a new Volunteer and Employee Engagement Paid Time Off policy, which provides up to eight hours of paid time off each calendar year for volunteer and other firm-sponsored activities.
  • The new policy increases opportunities for employees to participate in volunteer activities and give back to our communities.

Parental Leave policy

  • In 2017, we increased paid parental leave for the primary caregiver to 16 weeks, up from 12 weeks, for eligible employees in the United States. In 2018, we extended the leave for non-primary parental caregivers to six weeks of paid time off (up from two weeks).

Supporting veterans

  • Our veteran-focused efforts are centered on facilitating success in veterans’ post-service lives primarily through employment and retention. In 2011, JPMorgan Chase and 10 other companies launched the 100,000 Jobs Mission, setting a goal of collectively hiring 100,000 veterans. The initiative has resulted in the hiring of more than 500,000 veterans by over 200 member companies of the Veteran Jobs Mission, with the ultimate goal of employing 1 million veterans.
  • JPMorgan Chase has hired more than 14,000 U.S. veterans since 2011 – including over 1,100 in 2018 alone – with more than 50% coming from diverse backgrounds.
  • We offer internship and rotational entry programs to ease the transition from military service to the financial services industry. Once at our firm, veterans can count on the support of our Office of Military and Veterans Affairs, which sponsors mentorship programs, acclimation and development initiatives, recognition events and other programs to help bridge the gap between military and corporate cultures.
  • More than 1,000 mortgage-free homes have been awarded to military families through nonprofit partners as part of our firm’s Military Home Awards Program.
  • We completely support the U.S. military. We cannot understand how any U.S. citizen does not support the extraordinary sacrifice and hardship borne by the military to help protect this great nation.

Needless to say, our success is impossible without our employees, and we strive mightily to help them in both their professional and personal lives.

6. We always strive to learn more about management and leadership.

At the end of the day, everything we do is done by human beings. In my annual letter to shareholders, I always enjoy sharing what we have learned about management, leadership and organizations over time.

Great management is critical, though true leadership requires more.

For any large organization, great management is critical to its long-term success. Great management is disciplined and rigorous. Facts, analysis, detail … facts, analysis, detail … repeat. You can never do enough, and it does not end. Complex activity requires hard work and not guessing. Test, test, test and learn, learn, learn. And accept failure as a “normal” recurring outcome. Develop great models but know that they are not the answer – judgment has to be involved in matters related to human beings. You need to have good decision-making processes, with the right people in the room, the proper dissemination of information and the appropriate follow-up – all to get to the right decision. Force urgency and kill complacency. Know that there is competition everywhere, all the time. But even if you do all of this well, it is not enough.

Real leadership requires heart and humility.

It’s possible to be very good at the type of management described above, but as managers rise in an organization, they depend on others more and more. The team is increasingly important – many team members know more than their managers do about certain issues – a team working together can get to a better outcome. I have seen many senior managers ascend into big new roles with a bad reaction to their increasing dependence on other people – by hoarding information, never allowing themselves to be embarrassed and demanding personal loyalty versus loyalty to the organization and its principles. They don’t grow into the new job – they swell into it. I have often felt that dependency on their teams makes these folks feel paranoid or insecure – leading to this bad behavior.

Good leaders have the humility to know that they don’t know everything. They foster an environment of openness and sharing. They earn trust and respect. There are no “friends of the boss” – everyone gets equal treatment. The door is universally open to everybody. Everyone knows that these leaders are only trying to do the right thing for customers and clients. They share the credit when things go well and take the blame when it does not.

And true leaders don’t just show they care – they actually do care. While they demand hard work and effort, they work as hard as anyone, and they have deep empathy for their employees under any type of stress. They are patriots not mercenaries; they have the heart to wear the jersey every day.

You need to stay hungry and scrappy.

Competition is everywhere, but, often, very successful companies are lulled into a false sense of security. Having worked at a number of companies not nearly as successful as ours (I have to confess that I kind of liked being the underdog), we fought every day to even try to get to the major leagues. All companies are subject to inertia, insipid bureaucracy and other flaws, which must be eradicated. If a company isn’t staying on edge, maintaining a fire in its belly and pushing forward, it will eventually fail.

7. We do not worry about some issues.

Since we shared issues that are high priorities, it is almost as important to describe the issues we don’t worry about daily – and why. A few are listed below:

  • We do not worry about the stock price in the short run. If you continue to build a great company, the stock price will take care of itself.
  • We do not worry about quarterly earnings. Build the company for the future, and you will maximize earnings over the long run.
  • While we worry extensively about all of the risks we bear, we essentially do not worry about things like fluctuating markets and short-term economic reports. We simply manage through them.
  • We do not worry about loan growth. It is most definitely an outcome of how we manage credit and client decisions. We will not stretch, ever, to show growth in loans.
  • While we fanatically manage our company, we do not worry about missing revenue or expense budgets for good reasons. This is not a mixed message. We want our leaders to do the right thing for the long term and explain it if they have good reasons to diverge from prior plans.
  • We do not worry about charge-offs increasing in a recession – we fully expect it, and we manage our business knowing there will be good times and bad times.

Suffice it to say, we stay devoted to these principles.

II. Comments on Current Critical Issues

In this section, I review and analyze some of the current critical issues that affect our company.

1. We need to continue to restore trust in the strength of the U.S. banking system and global systemically important financial institutions.

An enormous amount has been accomplished in the last decade.

The strength, stability and resiliency of the financial system have been fundamentally improved over the course of the last 10 years. While I don’t agree with all of the Wall Street Reform and Consumer Protection Act (Dodd-Frank) regulations, the bill did give regulators needed authority to fix our financial system’s most critical flaws. These post-crisis reforms have made banks much safer and sounder in the three most important areas: capital, liquidity, and resolution and recovery.

Large banks, defined as global systemically important financial institutions, have more than doubled their highest quality capital to protect against losses, and they have tripled their liquid assets to total assets ratio to protect against unexpected net cash outflows. This allows healthy banks to weather extreme stress while continuing to provide credit and support to their clients (see message to employees below that describes many of the lessons learned from the crisis and the extensive steps we took to help our clients).

Here’s an eye-opening example of how much capital is now in the system: Under the Fed’s most extreme stress-testing scenario, where 35 of the largest American banks bear extreme losses (as if each were the worst bank in the system), the combined losses are about 6% of the total loss absorbing resources of those 35 banks. JPMorgan Chase alone has nearly three times the loss absorbing resources to cover the projected losses of all of these 35 banks (see chart below).

Loss Absorbing Resources of U.S. SIFI Banks Combined graph

In addition, resolution and recovery regulations have given regulators both the legal authority and the tools to manage a failing or failed institution (see my comments in the sidebar below about how Lehman Brothers would have played out under today’s new rules). This allows regulators to minimize the impact of a major failed institution on both taxpayers and the system.

Looking back on the financial crisis

September 2018 message to employees 10 years after the financial crisis

Dear Colleagues,

A decade has passed since the collapse of Lehman Brothers so now is a good time to reflect on the financial crisis that was raging 10 years ago this month. A lot has been written — and far more is still to be written — on this crisis, but I would like to share a few thoughts with you on that extraordinary period of time and everything that all of you at JPMorgan Chase did to try to help.

The gathering storm hit with a vengeance.

While the collapse of Lehman in September 2008 was the epicenter of the crisis, it was actually far more complex than that — the roots go back to before 2006. By late 2006, we already saw problems in subprime mortgages, leveraged lending and quantitative investing. With the onset of Basel II, leverage at investment banks (not commercial banks) more than doubled, as did shadow banking (think structured investment vehicles, collateralized debt obligations, money market funds and so on). This was often funded by unsecured, undependable short-term wholesale borrowing. Then the biggest problem of all presented itself: It was not just subprime mortgages that were flawed – but all mortgages. This happened, in hindsight, by bad underwriting, government policy that fueled and fostered inappropriate mortgage lending (higher and higher loan-to-values, less and less cash down, weaker appraisals and insufficient income certification), unscrupulous brokers and cavalier investors. The banks, though not the worst actors in mortgages, joined the party, too. When the world realized that $1 trillion would ultimately be lost in mortgages, panic ensued. There were multiple failures — mortgage brokers, savings and loans (S&L), including Washington Mutual (WaMu) and IndyMac, as well as Fannie Mae and Freddie Mac (which were the largest financial failures of all time) — culminating in the dramatic failure of Lehman, followed by the extraordinary bailouts of AIG and other major financial institutions.

JPMorgan Chase did everything it possibly could do to help during this time.

On March 16, 2008, we announced our acquisition of Bear Stearns, a company with $300 billion of assets, which had collapsed and had fatal problems (we were essentially buying a house … but it was a house on fire). And we did this at the request of the U.S. government (thinking at the time that this could help head off a terrible crisis). On September 25, 2008, 10 days after the collapse of Lehman Brothers, we bought the largest S&L — WaMu — another company that had $300 billion of assets. We took other extraordinary actions — often at calculated but great risk to JPMorgan Chase — to support clients, including governments, and to support the markets in general. We loaned $70 billion in the global interbank market when it was needed most. With markets in complete turmoil, we were the only bank willing to single-handedly lend $4 billion to the state of California, $2 billion to the state of New Jersey and $1 billion to the state of Illinois. Additionally — and frequently — we loaned or raised for our clients $1.3 trillion at consistent and fair rates, in many cases far below what the market would have demanded, and we provided more than $100 billion to local governments, municipalities, schools, hospitals and not-for-profits over the course of 2009. Many other banks did the same. You probably will be surprised to find out that we lent a tremendous amount of money to Lehman before the crisis — and even more after the crisis. In fact, at the request of the Federal Reserve, we took extraordinary risk to lend more than $80 billion (on a secured basis) to Lehman after its bankruptcy to help facilitate sales of assets in as orderly a way as possible to minimize disruption in the markets.

This was a traumatic, historic period of time not just for the financial system but for the world as a whole. We endured a once-in-a-generation economic, political and social storm, and because of you, we have emerged 10 years after this crisis as a company of which we can all be proud.

The aftermath and lessons learned.

Many people still ask me about the Troubled Asset Relief Program (TARP), a government program that provided funding to banks in the midst of the crisis. JPMorgan Chase did not want or need TARP money, but we recognized that if the healthy banks did not take it, no one else could — out of fear that the market would lose confidence in them. And while it helped create the false rallying cry that all the banks needed support, the government, both the Federal Reserve and the Treasury, was trying everything it could in addition to TARP. And the Federal Reserve and the Treasury should be congratulated for the extraordinary actions they took to stave off a far worse crisis. In hindsight, it is easy to criticize any specific action, but, in total, the government succeeded in avoiding a calamity.

There were many lessons learned from the crisis: the need for plenty of capital and liquidity, proper underwriting and regulations that are constantly refined, fair and appropriate. In fact, regulators should take a victory lap because Lehman, Bear Stearns, AIG and multiple other failures effectively could not happen today because of the new rules and requirements.

We entered the crisis with the capital, liquidity, earnings, diversity of businesses, people and a risk management culture that enabled us to avoid most — but, unfortunately, not all — of the issues exposed by the crisis. These strengths also helped us to weather the economic crisis and to continue to play a central role in supporting our clients and our communities and rebuilding the U.S. economy. Counter to what most people think, many of the extreme actions we took were not done to make a profit: They were done to support our country and the financial system.

What stood out most was our character and capabilities — which make JPMorgan Chase what it is today.

When the global financial crisis unfolded in 2008, the people of JPMorgan Chase understood the vital role our firm needed to play and felt a deep responsibility to those who rely on us. It was this sense of responsibility that enabled us to move beyond the challenges we were facing at that time and maintain a focus on what really matters: Taking care of our clients, helping the communities in which we operate — all while under extreme pressure from both the markets and the body politic — and protecting our company.

How we managed through the crisis is a testimony to the collective strength of character and commitment of our people. During those chaotic days throughout the crisis and its aftermath, many of our people had to work around the clock, seven days a week, for months on end. And they did it without complaint. The biggest lesson of the crisis: The quality, character, culture and capabilities of your partners are paramount.

Looking back and then looking around at the company we are today, I am filled with awe and admiration. For JPMorgan Chase, these past 10 years have been part of a challenging, yet defining, decade. Today, JPMorgan Chase is among the leaders in most of our businesses. I can’t tell you how proud I am to be your partner and to witness your extraordinary performance. I can’t thank our current and former employees enough for helping us get through those turbulent times and for the company we have become.

LEHMAN REDUX — IT SIMPLY WOULD NOT HAVE FAILED, BUT IT WOULD HAVE BEEN EASILY MANAGEABLE IF IT DID FAIL

As I mentioned in my shareholder letter in 2016, it is instructive to look at what would happen if Lehman were to fail in today’s regulatory regime. First of all, it is highly unlikely the firm would fail because under today’s capital rules, Lehman’s equity capital would be approximately $45 billion instead of $23 billion, which it was in 2007. In addition, Lehman would have far stronger liquidity and “bail-inable” debt. And finally, the firm would be forced to raise capital much earlier in the process. Lehman simply would not have failed.

However, if by the remotest, shooting-star possibility Lehman failed anyway, regulators would now have the legal authority to put the firm in receivership (they did not have that ability back in 2007-2008). At the moment of failure, unsecured debt of approximately $120 billion would be immediately converted to equity. “New Lehman” would be the best-capitalized bank in the world. In addition, derivatives contracts would not be triggered, and cash would continue to move through the pipes of the financial system. Legislators and regulators should be applauded for what they have done to solve the Too Big to Fail problem, though I should point out that this was accomplished by putting some basic rules in place — not the thousands of other rules layered atop them.

2. We have to remind ourselves that responsible banking is good and safe banking.

One of the critical responsibilities of banks is to take a rigorous and disciplined approach to allocating capital in the financial system – whether they do it directly through loans or through public and private capital markets. Banks need to do this knowing there will be recessions and that they should plan to support their clients through their most difficult times. We did exactly that throughout the 2008 crisis (again, see message to employees above). While many people focus on market making, which of course entails risk (we buy and sell about $2 trillion a day of various securities around the world), this risk taking is carefully monitored and largely hedged. To put risk taking and market making a little bit in perspective – in the last five years, we have lost money trading on only 11 days, and the loss was usually small and never more than about two times the average normal trading day revenue. Overall, loans are still the biggest risk that banks take. Our loan losses last year were $5 billion, and in the worst year of the Great Recession, our loan losses were approximately $24 billion.

Responsible banks cannot always give customers what they want.

Making bad and unworthy loans ultimately is bad for both the bank and the customer. Being a responsible bank means you can’t always give customers what they want, and, therefore, it is unlikely that all of your customers are going to like you. We are fundamentally not in the same position as most businesses. If a customer has the money, most businesses will sell their goods and services to that customer. Banks can’t do that. Sometimes we have to say no or enforce rules that may be unpopular. I have always believed that this necessary discipline with customers is one of the reasons that, historically, banks have not been popular.

Banks are under constant pressure, including political pressure, to make loans (remember subprime mortgages?) even when they should not. But when and if something goes wrong with loans, even when proper and responsible underwriting is done, banks will come under a lot of legal, regulatory and political scrutiny and should expect to be blamed for potentially causing the problem. These conflicting pressures – to make or not make loans – will always exist and need to be properly navigated by a good bank.

Client selection is critical.

Client selection is one of the most important things we do. If one bank builds a book of business with clients of high character and another bank builds its business with clients of low character (who are usually pushing sound banking practices to the limit), it’s clear which bank will succeed over time. Therefore, turning down clients, which can sometimes be hard to do, is often the only way to be a responsible bank.

Risk taking is a detailed, analytical process and includes extensive risk mitigation.

Shareholders may be surprised to find out that, fundamentally, we are not a risk-taking but rather a risk-mitigating institution. Risk mitigation is not guessing – it is a thoughtful, detailed analytical process that leads to measured decision making. Participants in our risk meetings can attest that while we are adamant about serving clients, we are also fanatic about understanding and mitigating some of the associated risks. So, in addition to proper client selection, risks are mitigated through simplification, diversification, hedging, syndication, covenants, hard limits, continuous monitoring and fast reaction to problems. We deeply analyze everything so we can shoulder appropriate risk for and with our clients. We are their financial partner.

A recent example in the oil and gas sector shows how we balance risk while serving clients in tough times.

From 2014 to 2016, oil prices collapsed from a high of $108 per barrel to a low of $26 per barrel. We were carrying approximately 250 loans to smaller oil and gas companies (mostly based in Houston), referred to in the industry as “reserve-based loans,” or RBLs. The proven oil and gas reserves in the ground served as the collateral for these loans, as reviewed by both J.P. Morgan’s petroleum engineers and third-party engineering consultants. We had $3 billion in outstanding loans under the RBL structure (and more to the oil industry as a whole). While we made these loans conservatively, we knew that low oil prices at the bottom of the cycle put us at great risk of loan losses – maybe even as high as $500 million. Our view was that we were going to work with these borrowers; i.e., extend the loans and try to help the companies survive this rough patch. (Of course, we put up additional loan loss reserves to account for possible losses.) At one point, surprisingly, some regulators made it clear that they did not want banks to extend these loans because they were too risky. But we thought it was important, even at the risk of losing hundreds of millions of dollars (something that we were positioned to be able to do), to help our clients get through this tough time rather than desert them when they needed us most. And sticking with our clients is exactly what we did. We thought regulators were overreacting – and, indeed, our losses, ultimately, were miniscule. Because of these actions, we are still welcome in Houston.

3. We believe in good regulation — both to help America grow and improve financial stability.

I want to be very clear that we do not advocate for the repeal of Dodd-Frank. We believe that the strength and resilience of the U.S. financial system have benefited from the law. Ten years out from the crisis, however, it is appropriate for policymakers to examine areas of our regulatory framework that are excessive, overlapping, inefficient or duplicative. At the same time, they should identify areas where banks can promote economic growth without impacting the very important progress we have made on safety and soundness. In fact, a stronger economy, by definition, is a safer economy. Our goal should be to achieve a rational, calibrated approach to regulation that strikes the right balance. This should be an ongoing and rigorous process that does not require any significant piece of legislation and should not be politicized.

Here are a few areas where we think recalibration would be good not only for banks, but for consumers and the economy as a whole:

  • Carefully monitor the growing shadow bank system. While we do not believe that the rise in non-banks and shadow banking has reached the point of systemic risk, the growth in non-bank mortgage lending, student lending, leveraged lending and some consumer lending is accelerating and needs to be assiduously monitored. (We do this monitoring regularly as part of our own business.) Growth in shadow banking has been possible because rules and regulations imposed upon banks are not necessarily imposed upon these non-bank lenders, which exemplifies the risk of not having the new rules properly calibrated. An additional risk is that many of these non-bank lenders will not be able to continue lending in difficult economic times – their borrowers will become stranded. Banks traditionally try to continue lending to their customers in tough times.
  • The country desperately needs mortgage reform – it would add to America’s economic growth. Reducing onerous and unnecessary origination and servicing requirements (there are 3,000 federal and state requirements today) and opening up the securitization markets for safe loans would dramatically improve the cost and availability of mortgages to consumers – particularly the young, the self-employed and those with prior defaults. And these would not be subprime mortgages but mortgages that we should be making. By taking this step, our economists believe that homeownership and economic growth would increase by up to 0.2% a year.

    In the early 2000s, bad mortgage laws helped create the Great Recession of 2008. Today, bad mortgage rules are hindering the healthy growth of the U.S. economy. Because there are so many regulators involved in crafting the new rules, coupled with political intervention that isn’t always helpful, it is hard to achieve the much-needed mortgage reform. This has become a critical issue and one reason why banks have been moving away from significant parts of the mortgage business. That business, in particular, highlights one of the flaws of our complicated capital allocation regime. The best way to risk manage a bank is to use risk weights that are actually based on risk. However, since most banks are also constrained by standardized capital (a capital measure that does not risk-adjust for the lower risk of having a properly underwritten prime mortgage), owning mortgages becomes hugely unprofitable.

    Because of these significant issues, we are intensely reviewing our role in originating, servicing and holding mortgages. The odds are increasing that we will need to materially change our mortgage strategy going forward.

We also need to get the recalibration of other regulatory requirements right, particularly around operational risk capital, the Fed’s Comprehensive Capital Analysis and Review (CCAR) stress test and the additional allocation of capital to global systemically important banks (GSIB). If we don’t do so, certain products and services will continue to be pushed outside the banking system (where they are, fundamentally, not regulated), distorting markets and raising the cost of credit for clients.

  • Operational risk capital. We now hold nearly $400 billion of operational risk-weighted assets, which means we hold more than $40 billion of equity for assets that don’t exist. This was a new calculation added after the crisis to recognize that banks also bear serious operational risk (stemming from lawsuits, processing errors and other issues). I agree that all banks bear operational risk, yet this is also true for all companies. Most companies, including banks, have earnings to pay for operational risk. And the calculation that gets us to $400 billion is questionable and so complex that I am not going to explain it here. Finally, most of our operational risk assets stem from Bear Stearns and WaMu subprime mortgage products that we don’t even offer anymore. Tying up capital in perpetuity – looking for shadows on the wall – is probably not the best idea for fostering growth in America.
  • Comprehensive Capital Analysis Review. I deeply believe in stress testing, but I do have issues with CCAR. First, it consists of only a single test (there are many things that can go wrong that should be stress tested) – which is unlikely to prepare anyone (banks or regulators) adequately. There is an arbitrariness to a single test. Moreover, I don’t think CCAR accurately represents what a loss would look like in the nine quarters after a Lehman-type event (remember that in the nine quarters following the actual Lehman collapse, JPMorgan Chase earned $30 billion). One of the refrains that we hear about CCAR results is they show that most banks at the worst part of the stress cycle can barely cover their required capital. This is fundamentally inaccurate. The CCAR test can give this false impression because it requires banks to do unnatural things (such as continuing all stock buybacks – even when it is completely obvious that banks wouldn’t or couldn’t do this). As a result, we don’t rely solely on CCAR, and we stress test hundreds of scenarios a month, preparing ourselves for circumstances far worse than CCAR stress.

    While CCAR losses may exceed what banks are likely to experience, they do appropriately include benefits that banks receive from being diversified and from having healthy profit margins. And CCAR is an effective built-in countercyclical buffer because its whole purpose is to ensure adequate capital at the worst point of a major stress event. Capital requirements for GSIBs, however, are completely different.
  • GSIB capital requirements. My biggest issue is with GSIB capital requirements, and since they may be added to the CCAR stress test, they become even more important. Most of the factors used in GSIB requirements are not risk-adjusted – and many of the calculations have no fundamental underpinning or logical justification. Their methodology irrationally multiplies certain factors over and over, and many of the facts are simply unjustified on any basis. For example, one of the risks is called “substitutability,” which is supposed to measure the risk that we won’t be able to replace certain services of a large bank that fails or retrenches during a crisis. The specific factors used to calculate this risk are market share of equity and debt underwriting and market making. But when Lehman failed, no one had a problem in replacing any of these activities. For another example, American regulators simply doubled thresholds for American banks (versus international competition) and have never adjusted them, as they were supposed to do, for economic growth, for other new regulations like total loss absorbing capacity and liquidity or for the fact that GSIB banks have become a smaller part of the financial system. Now regulators are talking about adding GSIB requirements to CCAR, which is only logical if the GSIB charge itself makes sense in the first place. If GSIB regulation is to become this important, it needs thorough justification.

Later in this letter I discuss some possible adverse consequences to the U.S. financial system because of the interplay between these factors in a downturn. One comment that we continue to hear is that U.S. banks are now doing quite well despite evidence that GSIB requirements are tougher on U.S. banks than on foreign banks. But that outperformance is not ordained from above and may not always be the case. We should calculate data the right way, and U.S. banks, their employees, shareholders and the communities they serve should not be put at a permanent disadvantage.

Proper calibration of financial regulation can enhance the growth and resiliency of the U.S. economy, which actually reduces systemic risk and helps banks safely serve more clients.

4. We believe stock buybacks are an essential part of proper capital allocation but secondary to long-term investing.

I have already noted that stock buybacks, though sometimes misused, are an important tool that businesses must have to reallocate excess capital. To reiterate, this should be done only after proper investments for the future have been considered.

A recent complaint is that companies, partially due to tax reform, have used their excess capital to buy back more stock instead of investing in their business. While this is true, you should keep in mind three things. First, as stock buybacks increased in 2018, so did corporate capital expenditures and research and development (R&D). In fact, contrary to popular belief, capital expenditures as a percentage of GDP are higher today than in the “good old days” of the 1950s and 1960s. Second, companies tend to buy back stock when they don’t see a good use for capital in the next year or two. We believe that as companies adjust to the new higher cash flows, they will begin to reinvest more of that money in the United States. The benefit of tax reform is the long-term (multi-year) cumulative effect of capital retained and reinvested in the United States. And third, the capital that was used to buy back stock did not disappear – it was given to shareholders who then put it to a better and higher use of their own choosing.

Here is one concluding comment on long-term investing: Many investors legitimately demand that companies think long term and explain their strategies and policies. Meanwhile, these same investors, who demand long-term thinking from companies, often invest in funds that are paid a lot of money for how a stock performs in one year. I hope these investors appreciate the disconnect and hope they will consider the pressures for short-term performance they may have helped to create.

5. On the importance of the cloud and artificial intelligence, we are all in.

The power of the cloud is real.

We were a little slow in adopting the cloud, for which I am partially responsible. My early thinking about the cloud was that it was just another term for outsourcing. I held firm to the view, which is somewhat still true, that we can run our own data centers, networks and applications as efficiently as anyone. But here’s the critical point: Cloud capabilities are far more extensive, and we are now full speed ahead. Let me cite a couple of examples:

  • The cloud gives us the ability to achieve rapid scale and elasticity of computing power exponentially beyond our own capacity. This will be especially relevant as we scale up our artificial intelligence efforts.
  • The cloud platform is agile and flexible. It offers access to data sets, advanced analytics and machine learning capabilities beyond our own. It increases developers’ effectiveness by multiples – you can almost “click and drop” new elements into existing programs as opposed to writing extensive new code. For instance, adding databases and/or machine learning to an application can be done almost instantaneously. And certain tasks, such as testing code and provisioning compute power, are automated.
  • The cloud provides a software development experience that is frictionless and allows our engineers to prototype quickly and learn fast, as well as increase the speed of delivering new capabilities to our customers and clients.

It is important to note that the cloud has matured to the point where it can meet the high expectations that are set by large enterprises that have fairly intense demands around security, audit procedures, access to systems, cyber security and business resiliency.

We will be rapidly “refactoring” most of our applications to take full advantage of cloud computing. We then can decide whether it is more advantageous to run our applications on the external cloud or the internal cloud (the internal cloud will have many of the benefits of the external cloud’s scalable and efficient platforms).

One final but key issue: Agile platforms and cloud capabilities not only allow you to do things much faster but also enable you to organize teams differently. You can create smaller teams of five to 20 people who can be continually reimagining, reinventing and rolling out new products and services in a few days instead of months.

The power of artificial intelligence and machine learning is real.

These technologies already are helping us reduce risk and fraud, upgrade customer service, improve underwriting and enhance marketing across the firm. And this is just the beginning. As our management teams get better at understanding the power of AI and machine learning, these tools are rapidly being deployed across virtually everything we do. We can also use artificial intelligence to try to achieve certain desired outcomes, such as making mortgages even more available to minorities. A few examples will suffice:

  • In the Corporate & Investment Bank, DeepX leverages machine learning to assist our equities algorithms globally to execute transactions across 1,300 stocks a day, and this total is rising as we roll out DeepX to new countries.
  • Across our company, we will be deploying virtual assistants (robots driven by artificial intelligence) to handle tasks such as maintaining internal help desks, tracking down errors and routing inquiries.
  • In Consumer Marketing, we are better able to customize insights and offerings for individual customers, based on, for example, their ability to save or invest, their travel preferences or the availability of discounts on brands they like.
  • Technological solutions help us do better underwriting, expediting the mortgage or automobile loan approval process, letting the customer accept the loan in a couple of clicks and then start shopping for a home or car.
  • In our Consumer Operations, we are using AI and machine learning techniques for ATM cash management to optimize cash in devices, reduce the cost of reloads and schedule ATM maintenance.
  • And our initial results from machine learning fraud applications are expected to drive approximately $150 million of annual benefits and countless efficiencies. For example, machine learning is helping to deliver a better customer experience while also prioritizing safety at the point of sale, where fraud losses have been reduced significantly, with automated decisions on transactions made in milliseconds. We are now able to approve 1 million additional good customers (who would have been declined for potential fraud) and also decline approximately 1 million additional fraudsters (who would have been approved). Machine learning will also curtail check fraud losses by analyzing signatures, payee names and check features in real time.
  • Over time, AI will also dramatically improve Anti-Money Laundering/Bank Secrecy Act protocols and processes as well as other complex compliance requirements.

We will try to retrain and redeploy our workforce as AI reduces certain types of jobs.

We are evaluating all of our jobs to determine which are most susceptible to being lost through AI. We will plan ahead so we can retrain or deploy our employees both for other roles inside the company and, if necessary, outside the company.

The combined power of virtually unlimited computing strength, AI applied to almost anything and the ability to use vast sets of data and rapidly change applications is extraordinary – we have only begun to take advantage of the opportunities for the company and for our customers.

6. We remain devoted and diligent to protect privacy and stay cyber safe — we will do what it takes.

The threat of cyber security may very well be the biggest threat to the U.S. financial system.

I have written in previous letters about the enormous effort and resources we dedicate to protect ourselves and our clients – we spend nearly $600 million a year on these efforts and have more than 3,000 employees deployed to this mission in some way. Indirectly, we also spend a lot of time and effort trying to protect our company in different ways as part of the ordinary course of running the business. But the financial system is interconnected, and adversaries are smart and relentless – so we must continue to be vigilant. The good news is that the industry (plus many other industries), along with the full power of the federal government, is increasingly being mobilized to combat this threat.

The issues around privacy are real.

We have spoken frequently in the past about the importance of safeguarding the privacy of our customers. We already do this extensively, and, in fact, we are inventing new products to make it easier for our customers to understand where we send their data (with their permission), as well as how to change or restrict what we do with that data.

New laws in Europe stipulate that consumers should be able to see what data companies have on file about them and to correct or delete this information if they choose. These are the right principles, but they are very complex to execute. It is imperative that the U.S. government thoughtfully design policies to protect its consumers and that these policies be national versus state-specific. Different state laws around privacy rules would create a virtually impossible legal, compliance and regulatory-monitoring situation.

But maybe the most crucial privacy issue of all relates to protecting our democracy. Our First Amendment rights do not extend to foreign governments, entities or individuals. The openness of the internet means that trolls, foreign governments and others are aggressively using social media and other platforms to confuse and distort information. They should not be allowed to secretly or dishonestly advertise or even promote ideas on media and social networks. We believe there are ways to address this, and we will be talking more about this issue in the future.

7. We know there are risks on the horizon that will eventually demand our attention.

In spite of all the uncertainty, the U.S. economy continues to grow in 2019, albeit more slowly than in 2018. Employment and wages are going up, inflation is moderate, financial markets are healthy, and consumer and business confidence remains strong, although down from all-time highs. The consumer balance sheet and credit are in rather good shape, and housing, though not particularly strong, is in short supply in many U.S. cities, which should eventually be a tailwind. Before I review some of the serious and possibly increasing risks that we may confront in the years ahead, I do want to review what happened in the fourth quarter of 2018.

The fourth quarter of 2018 might be a harbinger of things to come.

Going into the final months of last year, optimism about the global economy prevailed, and this was reflected in the stock and bond markets. But in the fourth quarter, growth slowed in Germany; Italy repudiated European Union rules; Brexit uncertainty remained; and fear spiked around America’s trade issues with China. Among other geopolitical tensions, the U.S. government shutdown began. In addition, more questions arose about interest rate increases in the United States and the effect of the reversal of unprecedented quantitative easing, particularly in this country. These issues, which reduced growth forecasts and increased uncertainty, should legitimately cause stock prices to drop and bond spreads to increase. However, stock markets fell 20%, investment grade bond spreads gapped out by 36% and certain markets (like initial public offerings and high yield) virtually closed down. Even at the time, these large swings seemed to be an overreaction, but they highlight two critical issues. One, which we never forget, is that investor sentiment can veer widely from optimism to pessimism based on little fundamental change. And second, for the fourth or fifth time in this recovery, there were excessive moves in the market with rapidly increasing volatility accompanied by steep drops in liquidity.

Market reactions do not always accurately reflect the real economy, and, therefore, policymakers and even companies should not overreact to them. But they do reflect market participant views of changing probabilities and possibilities of economic outcomes. Thus, policymakers (and banks), particularly the Fed, must necessarily (because they need to think forward) take an assessment of these issues into account. With this backdrop, I will discuss some of the serious issues on people’s minds (with more on liquidity later).

There are legitimate concerns around China’s economy (in addition to trade), but they are manageable.

To fully understand China, you have to do a fair assessment of all of its strengths and weaknesses. Over the last 40 years, China has done a highly effective job of getting itself to this point of economic development, but in the next 40 years, the country will have to confront serious issues. The Chinese lack enough food, water and energy; corruption continues to be a problem; state-owned enterprises are often inefficient; corporate and government debt levels are growing rapidly; financial markets lack depth, transparency and adequate rule of law; and Asia is a very complex part of the world geopolitically speaking. Just as important, not enough people participate in the nation’s political system. Chinese leadership is well aware of these issues and talks about many of them quite openly. I say none of this to be negative about China (indeed, I have enormous respect for what the Chinese have accomplished in the economic realm) but just to give a balanced view. And in spite of these difficulties, we believe that China is well on its way to becoming a fully developed nation, though the future will probably entail more uncertainty and moments of slower growth (like the rest of us) than in the past.

Disruption of trade is another risk for China. The United States’ trade issues with China are substantial and real. They include the theft or forced transfer of intellectual property; lack of bilateral investment rights, giving ownership or control of investments; onerous non-tariff barriers; unfair subsidies or benefits for state-owned enterprises; and the lack of rapid enforcement of any disagreements. The U.S. position is supported, though in an uncoordinated way, by our Japanese and European allies. We should only expect China to do what is in its own self-interest, but we believe that it should and will agree to some of the United States’ trade demands because, ultimately, the changes will create a stronger Chinese economy. We should also point out that over the last 30 years, the Chinese have been on a high-speed path that includes increasing transparency and economic reform, and while the momentum slows down periodically, they have continued relentlessly on that path. We believe the odds are high that a fair trade deal will eventually be worked out – but if not, there could be serious repercussions.

China can deal with many serious situations because, unlike developed democratic nations, it can both macromanage and micromanage its economy and move very fast. Government officials can pull, in a coordinated way, fiscal, monetary and industrial policy levers to maintain the growth and employment they want, and they have the control and wherewithal to do it. That being said, the American public should understand that China does not have a straight road to becoming the dominant economic power. The nation simply has too much to overcome in the foreseeable future. If China and the United States can maintain a healthy strategic and economic relationship (and that should be our goal), it could greatly benefit both countries – as well as the rest of the world.

Debt levels are increasing around the world — although this debt is mitigated because much of it is sovereign debt, which is different from corporate and consumer debt.

If countries essentially owe debt to themselves, not to creditors outside their country, they can generally manage their debt (America’s total debt to GDP is just about 80%, while Japan’s is approaching 200%). Such debt is not necessarily a good thing because it can be politically destabilizing and overcomplicate policymaking; however, it is generally manageable because if a nation owes money to itself, it is essentially reallocating its income across various interest groups within the country. If the country can continue to grow, it can still create more income for its citizens.

America’s debt level is rapidly increasing but is not at the danger level. While America does owe in excess of $6 trillion (essentially 40% of its publicly held debt) to creditors outside the country, U.S. companies and investors hold more than $25 trillion in total claims on foreigners, including more than $12 trillion of foreign portfolio holdings, and the U.S. economy is worth more than $100 trillion. So we earn more on foreign assets than we pay to foreign creditors. This is not a major issue. However, our country’s debt level over the next 30 years will start to increase exponentially, and at a certain point, this could cause concern in global capital markets. We have time to address this problem, but we should start to deal with the issue well before it becomes a crisis.

People also point to emerging market debt – both corporate and sovereign – as a potential issue, but the emerging markets, both countries and companies, are much bigger and stronger than they were in the past. They have more foreign exchange reserves and generally more effective risk management of currency and interest rate mismatches.

Leveraged lending is increasing, particularly through shadow banks.

Total leveraged lending in the United States is approximately $2.3 trillion. About 25% of the loans are owned by banks, the majority in more senior positions, and the remaining 75% are owned by shadow banks or non-banks. Deconstructing that number a bit, about $1.8 trillion is in U.S. institutional leverage term loans – approximately 30% of which are owned by banks. We estimate that approximately $500 billion of direct loans are owned exclusively by non-banks. While leveraged lending is a growing issue and one that we are monitoring, we don’t think this is yet of the size or quality to cause systemic issues in the financial system. This does not mean it won’t create some issues. When things get bad, invariably prices drop dramatically, certain types of high-yield debt cannot be refinanced, etc. – but at this level, it is still a manageable issue.

There are growing geopolitical tensions — with less certainty around American global leadership.

Geopolitical tensions are always there – just reading the newspaper in any week in any year since World War II would make anyone pretty worried. But it does appear that geopolitical tensions are growing. Let me mention a few: Russian aggression, Middle East conflicts, Venezuela, North Korea, Iran, Turkey, Brexit and European politics generally.

It’s always difficult to understand the effect of geopolitical uncertainty. But it is now heightened due to uncertainty around how the United States intends to exercise global leadership. This uncertainty may very well be the biggest new unknown factor affecting critical geopolitical and economic issues.

The chance of bad policy errors is increasing.

In this risk section and in the next section on public policy, I feel compelled to emphasize an obvious point: Bad public policy is a major risk. It could be central banks and monetary policy, trade snafus or simply deep political gridlock in an increasingly complex world – but bad policymaking is definitely an increasing risk for the global economy.

The confusion and uncertainty around liquidity are causing some legitimate concerns.

Several times in the last few years, including in the fourth quarter of 2018, markets exhibited rapid losses of liquidity, although fortunately, and importantly, the markets recovered in all cases – but that was in the context of a good environment. The ongoing debate around liquidity and short-term losses of liquidity in the market is an important one. We consider it in two ways: traditional liquidity and macro liquidity.

  • Traditional liquidity. I call it micro liquidity here, and it generally refers to the width of the bid-ask spread, as well as the size and speed with which securities can be bought or sold without dramatically affecting their price. There is no question that some micro liquidity is more constrained than in the past due to bank capital, liquidity and Volcker Rule requirements. In addition, high-frequency traders generally create some intraday liquidity (within a day), though even this is unreliable in a downturn. Because they rarely take positions interday (day to day), traders do not create real liquidity, but my view is that they increase the volatility of liquidity over time. There is no question that rules and regulations also cause unwanted and unnecessary distortions in money market vehicles, such as repos and swaps, particularly at quarter-end.

    If you look at liquidity – from before the financial crisis to today – in fairly liquid markets like Treasuries, swaps and equities, there is a noticeable difference. In good markets, liquidity is essentially high and is almost at the same level today as it was before the crisis. But when markets became volatile in the last several years, liquidity dropped much further and faster than it did before the crisis. It is important to remember that this happened in good times. Therefore, it is reasonable to expect that what we have been experiencing is now the new normal of liquidity – and that we should be prepared for it to be even worse in truly difficult times.
  • Macro liquidity. This describes a broader view of financial conditions. For example, is it easy to borrow and lend? Are banks able to increase their lending? Is the cost of borrowing going up? Is the Fed adding or reducing liquidity in the system (essentially by buying or selling Treasuries)? There is no doubt that new regulations, particularly bank liquidity requirements, dramatically reduce the ability of the Fed to increase bank lending today by shoring up bank reserves. In the old days, the central bank could effectively create excess reserves by buying Treasuries. These excess reserves were lendable by the bank. Today, such reserves are often not lendable due to new liquidity rules. So bank lending as a function of deposits is, in effect, permanently reduced. The notion of “money velocity” and in fact the transmission of monetary policy are, therefore, different from the past, and it is hard to calculate the full effect of all these changes. It is extremely difficult for us, and probably even for the Fed, to know when and at what level the removal of cash (liquidity) from the system starts to significantly affect macro or micro liquidity. We will, however, probably know it when we see it.

There may be too much certainty that growth will be slow and inflation subdued.

There is still global growth, and employment and wages continue to go up. However, this has been a very slow recovery, and it is possible that the “normal” increase of inflation late in the cycle, due to wage demands and limited supply, can still happen. We don’t see it today, but I would not rule it out. In addition, 10-year bond spreads have been suppressed in some way by the extreme quantitative easing around the world. If that ever reverses in a material way, how could it not have an effect on the 10-year bond? Finally, I would not look at the yield curve and its potential inversion as giving the same signals as in the past. There has simply been too much interference in the global markets by central banks and regulators to understand its full effect on the yield curve.

Expect banks to be far more constrained going into the next real downturn.

Today is nothing like 2008. There are fewer leveraged financial assets in the system now than a decade ago. In 2008, huge losses in the mortgage market forced consumers and companies to sell assets acquired by borrowing. Fundamentally, market panic ensued. Now there is far less borrowing against assets, and it is unlikely that there will be a lot of forced selling as a result. However, keep in mind that it is still possible for investors to sell lots of assets if any form of market panic takes place.

When the next real downturn begins, banks will be constrained – both psychologically and by new regulations – from lending freely into the marketplace, as many of us did in 2008 and 2009. New regulations mean that banks will have to maintain more liquidity going into a downturn, be prepared for the impacts of even tougher stress tests and hold more capital because capital requirements are even more procyclical than in the past. Effectively, some new rules will force capital to the sidelines just when it might be needed most by clients and the markets. For example, in the next financial crisis, JPMorgan Chase will simply be unable to take some of the actions we took in 2008, as described in the sidebar above.

The Fed is still quite powerful and retains numerous tools to deal with many of the issues described above.

There is excessive focus on what the Fed says and does in the short term. The Fed appropriately, and by necessity, needs to be data dependent – how could it be otherwise? And, of course, while proper policy requires Fed officials to constantly think about the future (though it does not require them to make specific forecasts public), they can’t know what the future holds with any certainty. But they are deeply knowledgeable, flexible and appropriately willing to change their minds. And, counter to what you often hear today, they retain a large number of tools at their disposal. They can change short-term rates at will and, in fact, can effect change on longer term rates if they want. With a few simple words, they can change the future expectations of the interest rate curve. They can buy or finance an extraordinary amount of assets, and they can revise regulations, if necessary, to improve liquidity or enhance lending. They can often, simply by asking, get banks to take certain actions that they want. It is a mistake to think that they don’t have significant tools at their disposal.

Of course, we hyper-focus on today’s problems, and they often overshadow the progress we are making across the globe. We should not overlook the positive signs. In addition to the strong U.S. economy, the world is still growing, trade issues may be properly resolved and Brazil, among others, has turned the corner economically.

If a downturn starts and leads to darker scenarios, we will be prepared, and we also believe the U.S. government will eventually respond adequately.

8. We are prepared for — though we are not predicting — a recession.

The key point here is that a fairly healthy U.S. economy will be confronting a wide variety of issues in 2020 and 2021. It’s hard to look at all the issues facing the world and not think that the range of possible outcomes is broader and that the odds of bad outcomes might be increasing. And certain factors, like confidence, which we know is important, can be easily damaged by bad policy, unexpected events or even high market volatility. The next recession may not resemble prior recessions. Next time, the cause may be just the cumulative effect of negative factors – the proverbial last straw on the camel’s back.

We are always prepared to deal with the next recession.

We generally do not spend a lot of time guessing about when the next recession will be – we manage our business knowing that there will be cycles.

First and foremost, we will continue to serve our clients. From the prior parts of this letter, you can see that we continued to make responsible loans to our clients during and after the Great Recession when they needed us most – and we will do that again. We will not stop investing in our future, investing in technology or building new branches. We will continue to make markets for our clients. We will not overreact to the credit cycle.

We will mitigate risk. We may reduce risk by taking on fewer new clients or by syndicating or hedging risk. And we may reduce risk by managing our portfolio of securities and loans unrelated to clients. We will exercise more of our muscle in terms of managing expenses, monitoring headcount and creating more efficiencies. We will have special credit teams, created in advance, to deal with any problematic credits.

Finally, we will be seeking out new ways to grow and compete. Our experience is that recessions do create opportunities for healthy companies to enhance their franchises generally by serving clients where other companies cannot.

III. Public Policy

There are many critical issues roiling the United States and other countries around the world today – just to name a few: capitalism versus other economic systems, the role of business in our society, how the United States intends to exercise global leadership, income inequality, equal opportunity, access to healthcare, immigration and diversity. Many people have lost faith in government’s ability to solve these and other problems. In fact, almost all institutions – governments, schools, unions, media and businesses – have lost credibility in the eyes of the public. In the meantime, many of these problems have been around for a long time and are not aging well. Politics is increasingly divisive, and a number of policies are not working. This state of affairs is unlikely to get better without thorough diagnosis, thoughtful policy solutions and a commitment to a common purpose.

In this section, I attempt to analyze and offer some views on what has caused this situation and then suggest some solutions. Neither the diagnoses nor the proposed cures are purely my own. These issues have been studied intensively by many people with deep knowledge. And given the space and other constraints of this letter, I may be about to violate the Einstein maxim, which I love: “Everything should be made as simple as possible, but not simpler.” One of the main points I am trying to make is that when you step back and take a comprehensive multi-year view, looking at the situation in its totality, it is the cumulative effect of many of our policies that has created many of our problems. And whatever the solutions, I think they are unlikely to be achieved by government alone – civil society and business need to be part of the equation. To start, we must understand our problems.

1. The American Dream is alive — but fraying for many.

Before I talk about our problems, I think it’s important to put any negatives in context, so first a paean to our nation. America is still the most prosperous nation the world has ever seen. We are blessed with the natural gifts of land; all the food, water and energy we need; the Atlantic and Pacific oceans as natural borders; and wonderful neighbors in Canada and Mexico. And we are blessed with the extraordinary gifts from our Founding Fathers, which are still unequaled: freedom of speech, freedom of religion, freedom of enterprise, and the promise of equality and opportunity. These gifts have led to the most dynamic economy the world has ever seen, nurturing vibrant businesses large and small, exceptional universities, and a welcoming environment for innovation, science and technology. America was an idea borne on principles, not based upon historical relationships and tribal politics. It has and will continue to be a beacon of hope for the world and a magnet for the world’s best and brightest.

Of course, America has always had its flaws. Some of its more recent issues center on income inequality, stagnant wages, lack of equal opportunity, immigration and lack of access to healthcare. I make it a practice when hearing complaints to strive to understand where people might be right or partially right instead of rejecting or accepting their views reflexively.

Middle class incomes have been stagnant for years. Income inequality has gotten worse. Forty percent of American workers earn less than $15 an hour, and about 5% of full-time American workers earn the minimum wage or less, which is certainly not a living wage. In addition, 40% of Americans don’t have $400 to deal with unexpected expenses, such as medical bills or car repairs. More than 28 million Americans don’t have medical insurance at all. And, surprisingly, 25% of those eligible for various types of federal assistance programs don’t get any help. No one can claim that the promise of equal opportunity is being offered to all Americans through our education systems, nor are those who have run afoul of our justice system getting the second chance that many of them deserve. And we have been debating immigration reform for 30 years. Simply put, the social needs of far too many of our citizens are not being met.

Over the last 10 years, the U.S. economy has grown cumulatively about 20%. While this may sound impressive, it must be put into context: After a sharp downturn, economic growth would have been 40% over 10 years in a normal recovery. Twenty percent more growth would have added $4 trillion to GDP, which certainly would have driven wages higher and given us the wherewithal to broadly build a better country. Key questions that keep arising – and remain unanswered are: Why have productivity and economic growth been so anemic? And why have income inequality and so many other things gotten worse? Included among the common explanations is that “secular stagnation” is the new normal. I’ve also heard blame placed on institutional greed and “short-termism,” bad corporate governance, job displacement from new technologies, immigration or trade and a lack of new productivity-enhancing technology. Another common refrain is that capitalism and free enterprise have failed. As you’ll see, I think some of these arguments miss the mark.

2. We must have a proper diagnosis of our problems — the issues are real and serious — if we want to have the proper prescription that leads to workable solutions.

Slogans are not policy, and, though simple and sometimes virtuous-sounding, they often lead to policies that fail. Well-intentioned but poorly designed policies generally have large and unintended negative consequences. Policy should always be extremely well-designed.

In my view, too often we don’t perform the deep analysis required to fully understand our problems. One of the reasons is that we often have too short term an orientation; i.e., looking at how things have changed year-over-year or even quarter-over-quarter. We frequently fail to look at trends over a multi-year period or over decades – we miss the forest for the trees. It’s also important to point out that many economic models that are used to design policy have a hard time incorporating or accounting for the effect of certain factors that can be pivotal but are too complex or qualitative to model.

I have tried to come up with a list of critical factors that greatly affect the health of an economy over many years (such as education, infrastructure, healthcare, etc.). The list is below, and when you look at how we have performed in these areas, it’s rather condemning. Our shortcomings in these areas clearly have impeded the prosperity of the U.S. economy and have failed many of our fellow citizens over the past two decades or so.

Our problems: What's holding back our nation's productivity and economic growth and reducing opportunity

Ineffective and out-of-touch education systems

Many of our high schools, vocational schools and community colleges do not properly prepare today’s younger generation for available professional-level jobs, many of which pay a multiple of the minimum wage. We used to be among the best in the world at training our workforce for good jobs, but now we are falling short. This is a huge reason for both inequality and lack of opportunity. Our inner-city high schools are failing their communities and are leaving too many behind. In some inner-city schools, fewer than 60% of students graduate, and of those who do, a significant number are not prepared for employment and are often relegated to a life of poverty. Proper training and retraining would also help in our rapidly changing technological world. Finally, skills training has become increasingly important over time, and the negligence of our education systems to be responsive to employers’ current needs has to have reduced GDP growth.

Soaring healthcare costs

These now represent almost 20% of GDP — more than twice the cost per person compared with most developed nations. While we have some of the best healthcare in the world, our outcomes are not twice as good as those of the rest of the world. Some studies say that gains in life expectancy in the last 50 years were a significant contributor to U.S. national wealth (and health), possibly equal to half of GDP growth, as people were healthier and lived longer, which generally improved the quality of the labor force and productivity. This may no longer be true. Obesity costs our country $1.4 trillion a year because it drives so many illnesses (i.e., heart disease, diabetes, cancer, stroke and depression). Even worse, 70% of today’s youth (ages 17–24) are not eligible for military service, essentially due to poor academic skills (basic reading and writing) or health issues (often obesity or diabetes). And out-of-pocket healthcare expenses for the average American have skyrocketed over the last 20 years, causing huge anxiety, particularly for low-income families who have been hit with the highest increases in healthcare costs.

Excessive regulation and bureaucracy

Excessive regulation for both large and small companies has reduced growth and business formation without making the economic system safer or better. The ease of starting a business in the United States has worsened, and both small business formation and employment growth have dropped to the lowest rates in 30 years. By some estimates, approximately $2 trillion is spent on federal regulations annually, which is about $15,000 per household. We need good regulations, and we have to get better at effectively implementing them – accomplishing the desired good outcomes – while minimizing unnecessary costs and bad unintended consequences.

Inability to plan and build infrastructure

It took eight years to get a man to the moon (from idea to completion), but it now can take a decade to simply get the permits to build a bridge or a new solar field. The country that used to have the best infrastructure on the planet by most measures is now not even ranked among the top 20 developed nations, according to the World Economic Forum's Basic Requirement Index, which reflects infrastructure along with other criteria. We are falling behind on airports, bridges, water, highways, aviation and more. One study examined the effect of poor infrastructure on efficiency (for example, poorly constructed highways, congested airports with antiquated air traffic control systems, aging electrical grids and old water pipes) and concluded this could all be costing us more than $200 billion a year. Philip K. Howard, who does some of the best academic work on America’s infrastructure, estimates it would cost $4 trillion to fix our aging infrastructure — and this is less than it would cost not to fix it. In fact, a recent study by Business Roundtable found that every dollar spent restoring our infrastructure system to good repair and expanding its capacity would produce nearly $4 in economic benefits. What happened to that “can-do” nation of ours?

Previously uncompetitive tax system for business

Over the last 20 years, as the world reduced its tax rates, America did not. Our previous tax code was increasingly uncompetitive, overly complex and loaded with special-interest provisions that created winners and losers. This was driving down capital investment in the United States and giving an advantage to foreign companies, thereby reducing productivity and causing wages to remain stagnant. The good news is the recent changes in the U.S. tax system include many of the key ingredients to fuel economic expansion: a business tax rate that will make the United States competitive around the world along with provisions to free U.S. companies to bring back profits earned overseas.

Capricious and wasteful litigation system

Our litigation system now costs 1.6% of GDP, 1% more than what it costs in the average OECD (Organisation for Economic Co-operation and Development) nation.

Frustrating immigration policies and reform

Forty percent of foreign students who receive advanced degrees in science, technology and math (300,000 students annually) have no legal way of staying here, although many would choose to do so. Most students from countries outside the United States pay full freight to attend our universities, but many are forced to take the skills they learned here back home. From my vantage point, that means one of our largest exports is brainpower. We need more thoughtful, merit-based immigration policies. In addition, most Americans would like a permanent solution to DACA (Deferred Action for Childhood Arrivals) and a path to legal status for law-abiding, tax-paying undocumented immigrants — this is tearing the body politic apart. The Congressional Budget Office estimates the failure to pass immigration reform earlier this decade is costing us 0.3% of GDP a year.

Inefficient mortgage markets

The inability to reform mortgage markets has dramatically reduced mortgage availability. In fact, our analysis shows that, conservatively, more than $1 trillion in additional mortgage loans might have been made over a five-year period had we reformed our mortgage system. J.P. Morgan analysis indicates that the cost of not reforming the mortgage markets could be as high as 0.2% of GDP a year.

Dramatic reduction in labor force participation

Wages for low-skilled work are no longer a living wage — the incentives to start work have been declining over time. Add to this the education issues already mentioned above. Two other contributing factors are that many former felons have a hard time getting jobs, and an estimated 2 million Americans are currently addicted to opioids (in 2017, a staggering 48,000 Americans died because of opioid overdoses). Some studies show that addiction is one of the major reasons why many men ages 25–54 are permanently out of work.

Student lending (and debt)

Irrational student lending, soaring college costs and the burden of student loans have become a significant issue. The impact of student debt is now affecting mortgage credit and household formation – a $1,000 increase in student debt reduces subsequent homeownership rates by 1.8%. Recent research shows that the burdens of student debt are now starting to affect the economy.

Lack of proper federal government budgeting and planning

This inevitably leads to waste, inefficiency and constraints on multi-year planning. One striking example: It may cost the military at least 20% of its spending power when budgets are not approved on time and continuous spending resolutions are imposed. And we don’t do some basic things well, like account for loans and guarantees properly and demand appropriate funding of public pension plans.

It is hard to look at these issues in their totality and not conclude that they have a significant negative effect on the great American economic engine. My view is if you add it all up, this dysfunction could easily have been a 1% drag on our growth rate. Before I talk about some ideas to address these issues, I would like to discuss one major debate currently in the echo chamber.

Is capitalism to blame? Is socialism better?

There is no question that capitalism has been the most successful economic system the world has ever seen. It has helped lift billions of people out of poverty, and it has helped enhance the wealth, health and education of people around the world. Capitalism enables competition, innovation and choice.

This is not to say that capitalism does not have flaws, that it isn’t leaving people behind and that it shouldn’t be improved. It’s essential to have a strong social safety net – and all countries should be striving for continuous improvement in regulations as well as social and welfare conditions.

Many countries are called social democracies, and they successfully combine market economies with strong social safety nets. This is completely different from traditional socialism. In a traditional socialist system, the government controls the means of production and decides what to produce and in what quantities, and, often, how and where the citizens work rather than leaving those decisions in the hands of the private sector.

When governments control companies, economic assets (companies, lenders and so on) over time are used to further political interests – leading to inefficient companies and markets, enormous favoritism and corruption. As Margaret Thatcher said, “The problem with socialism is that eventually you run out of other people’s money.” Socialism inevitably produces stagnation, corruption and often worse – such as authoritarian government officials who often have an increasing ability to interfere with both the economy and individual lives – which they frequently do to maintain power. This would be as much a disaster for our country as it has been in the other places it’s been tried.

I am not an advocate for unregulated, unvarnished, free-for-all capitalism. (Few people I know are.) But we shouldn’t forget that true freedom and free enterprise (capitalism) are, at some point, inexorably linked.

Successful economies will create large, successful companies.

Show me a country without any large, successful companies, and I will show you an unsuccessful country – with too few jobs and not enough opportunity as an outcome. And no country would be better off without its large, successful companies in addition to its midsized and small companies. Private enterprise is the true engine of growth in any country. Approximately 150 million people work in the United States: 130 million work in private enterprise and only 20 million people in government. As I pointed out earlier in this letter, large, successful companies generally provide good wages, even at the starting level, as well as insurance for employees and their families, retirement plans, training and other benefits. Companies in a free enterprise system drive innovation through capital investments and R&D; they are huge supporters of communities; and they often are at the forefront of social policy. Are they the reason for all of society’s ills? Absolutely not. However, in many ways and without ill intent, many companies were able to avoid – almost literally drive by – many of society’s problems. Now they are being called upon to do more – and they should.

3. All these issues are fixable, but that will happen only if we set aside partisan politics and narrow self-interest — our country must come first.

We need to set aside partisan politics.

None of these issues is exclusively owned by Democrats or Republicans. To the contrary, it is clear that partisan politics is stopping collaborative policy from being implemented, particularly at the federal level. This is not some special economic malaise we are in. This is about our society. We are unwilling to compromise. We are unwilling or unable to create good policy based on deep analytics. And our government is unable to reorganize and keep pace in the new world. Plain and simple, this is a collective failure to put the needs of society ahead of our personal, parochial and partisan interests. If we do not fix these problems, America’s moral, economic and military dominance may cease to exist.

In my view, we need a Marshall Plan for America. To do this, Democrats have to acknowledge that many of the things that have been done as a nation – often in the name of good – have sometimes not worked and need to be modified. Throwing money at problems does not always work. Recently, a report showed that the federal government wasted nearly $1 billion on charter schools due to mismanagement and lack of adequate oversight – this was money intended to help children. Democrats should acknowledge Republicans’ legitimate concerns that sending money to Washington tends to be simply seen as waste, ultimately offering little value to local communities. Republicans need to acknowledge that America should and can afford to provide a proper safety net for our elderly, our sick and our poor, as well as help create an environment that generates more opportunities and more income for more Americans. And if we can demonstrate that we are spending money wisely, we should spend more – think infrastructure and education funding. And that may very well mean taxing the wealthy more. If that happens, the wealthy should remember that if we improve our society and our economy, then they, in effect, are among the main winners.

Our nation requires strong political leaders to develop good, thoughtful policies, use their political skills to determine what is doable and exercise their leadership skills to lead people toward commonsense solutions.

We need to set aside our narrow self-interest.

We live in an increasingly complex world where companies, governments, unions and special interest groups vie for time, attention and favorable circumstances for their respective institutions. While it is a constitutional right to petition our government, and many organizations legitimately fight for the interests of their constituents, we all may have become too self-interested. I fear that this self-interest is part of what is destroying the glue that holds our society together. We all share a collective responsibility to improve our country.

I would like to give a few examples, which represent the tip of the iceberg (it would be easy to come up with thousands more).

  • Governments, both federal and state, fight to keep military bases open that we don’t need and Veterans Affairs hospitals that are broken – making the military more costly and less effective. Our shortcomings are not just about inefficiencies; they border on immoral. In an incredibly depressing story, former Secretary of Defense Bob Gates describes how Congress took years longer than it should have to approve the building of U.S. Army personnel carriers that we needed in Iraq and Afghanistan to protect our soldiers from improvised explosive devices. While we dallied, many of our soldiers died or received terrible lifelong injuries.

    Five states (California, Connecticut, Illinois, New Jersey and New York) fight for unlimited state and local tax deductions because those five states reap 46% of the benefit – even worse, knowing that over 80% of the benefits from these deductions go to people who earn more than $320,000 a year.
  • Businesses are equally guilty here. Just start digging through the tax code – buried in there are an extraordinary number of loopholes, credits and exemptions that aren’t about competitiveness or good tax policy. Suffice it to say, industry gets its share of tax breaks and forms of protection from legitimate competition. I could add hospitals, schools and unions to this list – none of our institutions is blameless.

While leaders obviously fight for their institutions, we all need to be able to advocate for policies that are good for our organizations without being bad for our country. And as a general matter, we, as citizens, should support policies that are good for our country even if they may not be good for us individually. For too long, too many have fought to use regulation and legislation to further their interests without appropriate regard for the needs of the country.

4. Governments must be better and more effective — we cannot succeed without their help. The rest of us could do a better job, too.

The U.S. federal government is becoming less relevant to what is going on in people’s lives. People have generally lost faith in the ability of institutions to deliver on their mission and meet societal needs. They are demanding change, and we must recognize that change is needed. We need dramatic reform of our global and federal institutions and how we attack our biggest societal challenges. There are signs of progress, particularly in how local governments are starting to attack pressing problems – the ones that directly affect people’s lives, like education, housing and employment. Look at Detroit and see how excellent leadership is fixing a once failing city. We should continue to empower local governments to address the needs of our society, but we should be asking our federal government to do the same.

I have already commented about needing real policies that include thoughtful plans to increase growth and create more opportunity for everyone. Faster growth will raise incomes, generate opportunities and create the wherewithal to fund improvements in our social welfare programs. (In the sidebar below, I describe some possible solutions to the problems previously highlighted above). These solutions are not my own but are a synthesis of some of the best thoughts that we have seen. Some of these solutions are simple, and some are more complex. And obviously, if they were politically easy to put into practice, that would have been done by now. However, I am convinced that if we could get ideas like these implemented, economic growth and opportunity for all would be greatly enhanced.

Some solutions to how we might drive growth, incomes and opportunity

Education

We know what to do. High schools and community colleges should work with local businesses to create specific skills training programs, internships and apprenticeships that prepare graduating students to be job-ready — whether they go on to earn a credential, to work or to attend college. With 7 million job openings and 6 million unemployed workers in the United States, there is an opportunity for companies to work with local institutions, including community colleges and local apprenticeship programs. Business must be involved in this process, and it needs to be done locally because that is where the actual jobs are. Germany does an exceptional job at apprenticeships. Germany has one of the strongest education and training systems in the world, with about 1.5 million young people annually participating in apprenticeship programs that are paid opportunities to gain in-demand skills along with an education. The vocational schools and apprenticeship programs work directly with local businesses to ensure students are connected to available jobs upon graduation. Germany’s youth unemployment rate is one of the lowest in the world.

Some countries are now implementing mandatory preschool for children at three years of age. This is a wonderful policy. It makes childcare less expensive and has proved to be extraordinarily good for student education short and long term. Parents like it, too. Of course, the benefits may not be seen for many years, but this is precisely the type of long-term thinking in policymaking that we need.

Healthcare

This may be our toughest, most complicated problem, but we know there are some things we can do to make the system work better. Some of the solutions may include aligning incentives better; trying to eliminate the extraordinary amount of money wasted on bureaucracy, administration and fraud; empowering employees to make better choices with upfront transparency in employer plan pricing and options and the actual cost of medical procedures; developing better corporate wellness programs, focusing particularly on obesity and smoking; creating better tools to shop around for non-emergency care and manage healthcare expenses; and reducing the extraordinary expense for unwanted end-of-life care. Another obvious thing to do is to start teaching wellness, nutrition, health and exercise in K-12 classrooms nationwide.

Regulatory reform

Starting a small business today generally requires multiple licenses, which take precious months to get. But it doesn’t end there. Talk with any small business owner and that person will describe the mountains of red tape, inefficient systems and a huge amount of documentation involved to operate the business. We need to reduce the number of licenses that are required to open and run a small business. In addition, we should look at the excessive state and local rules affecting small businesses, consolidating and eliminating unnecessary rules and regulations where possible. And all regulations should have a thorough cost-benefit analysis and be periodically reviewed for current relevancy.

Infrastructure investment

The 2015 transportation spending bill, Fixing America’s Surface Transportation Act (FAST Act), is intended to fund surface transportation programs — including highways — at over $305 billion through 2020. Its aim is to improve mobility on America’s highways; create jobs and support economic growth; decrease bureaucracy in getting projects approved and completed — and we need to finish its implementation. Again, experience from other countries may help. We could learn from Germany and Canada, for example, whose officials endorsed large infrastructure projects and sped through permitting in two to three years by forcing federal, state and local approvers to simultaneously work through a single vetting process. Significantly reducing the time of permitting also dramatically reduces the cost and uncertainty around making major capital investments.

Tax credits and benefits

The business tax changes in the 2017 tax law made the United States more competitive, benefiting American workers today and strengthening our economy for the long term. In 2018, nominal wages increased 3.3% — the fastest rate of growth since 2008 — and job openings exceeded the number of unemployed workers for the first time since the federal government started tracking these data in 2000. Beyond this important progress, there is still more that policymakers could do to help working Americans. Of the 150 million Americans working today, approximately 21 million earn between $7.25 an hour (the prevailing federal minimum wage) and $10.10 an hour. It is hard to live on $7-$10 an hour, particularly for families (even if two household members are working). While it would be acceptable to increase minimum wages, this should be done locally and carefully so it does not increase unemployment. Perhaps a more effective step would be to expand the Earned Income Tax Credit (EITC). Today, the EITC supplements low- to moderate-income working individuals and couples, particularly with children. For example, a single mother with two children earning $9 an hour (approximately $20,000 a year) could receive a tax credit of more than $5,000 at year’s end. Last year, the EITC program cost the United States about $63 billion, and 25 million individuals received the credit. We should convert the EITC to make it more like a negative income payroll tax, which would spread the benefit, reduce fraudulent and improper payments, and get it into more people’s hands. Workers without children receive a very small tax credit — this should be dramatically expanded, too.

Litigation

While the rule of law and the right of plaintiffs to get their day in court are sacrosanct, there have to be ways to improve this system. One example, which works in many other countries, is to have the loser pay in some circumstances. Clearly, this would have to be done in such a way as to ensure that aggrieved parties are not denied appropriate access to our justice system. But we need a way to reduce frivolous litigation designed principally to extract fees for lawyers. We also need to reduce the time and the cost necessary to achieve justice by adding more judges and creating more specialty courts to deal with complex issues.

Immigration

There has been support for bipartisan comprehensive legislation that provides substantial money for border security, creates more merit-based immigration, makes DACA permanent and gives a path to legal status or citizenship for law-abiding, hard-working, undocumented immigrants. We know this is no easy feat, but we should pass and enact legislation to resolve immigration.

Mortgage lending

Things can be done to reform mortgage markets, which would increase mortgage availability — as I mentioned in the previous sidebar.

Labor force participation

We have already mentioned two critical solutions that would help improve labor force participation — make work pay more by expanding the EITC and provide graduating students with work skills that will lead to better paying jobs. Remember, jobs bring dignity. That first job is often the first rung on the ladder. People like working, and studies show that once people start working, they continue working. Jobs and living wages lead to better social outcomes — more household formation, more marriages and children, and less crime, as well as better health and overall well-being.

Reducing recidivism of those who have been incarcerated is not only important to citizens with a criminal record and their families — but it can also have profound positive implications for public safety. Last year, we welcomed the Federal Deposit Insurance Corporation’s proposed changes to allow banks more flexibility in hiring citizens convicted of a crime. Our responsibility to recruit, hire, retain and train talented workers extends to this population, and we will support re-entry programs and give convicted and/or formerly incarcerated Americans a path to well-paying jobs. Finally, we should all be gratified that the government now seems to be taking the opioid problem very seriously.

Student lending

We should have programs to ameliorate the burden of student loans on some former students. We would be well-advised to have more properly designed underwriting standards around the creation of student loans. Direct government lending to students has grown almost 500% over the last 10 years – and it has not all been responsible lending. It would also be helpful for the government to disclose student lending programs as if they were accountable on the same basis as a bank. Addressing these factors would lead to far better, and healthier, student lending.

Proper budgeting and planning

All levels of government should do proper budgeting and planning — and on a multi-year basis. It is particularly important that most federal programs — think military, infrastructure and education — have good long-term plans and be held accountable to execute them. When the government says it is going to spend money, it should tell the American people what the expected outcome is and report on it. It should account for loans the same way the private sector does, and it should be required to do cost-benefit analysis.

Somehow we need to help reinvent government to make it more efficient and nimble in the new world. While the federal government remains somewhat in a stalemate, we have seen governors and mayors at the state and local levels taking active control and framing effective solutions. They are helping to create a laboratory of what works and are often at the forefront with initiatives that restore confidence in the ability of government to deliver. We also call upon CEOs and other leaders to step up and offer non-parochial solutions.

One final thought: If I were king for a day, I would always have a competitive business tax system and invest in infrastructure and education as a sine qua non to maximize the long-term health and growth of our economy and our citizens. I would not trade these issues off – I would figure out a way to properly pay for them.

5. CEOs: Your country needs you!

Despite the fact that CEOs are not generally viewed with high levels of trust, surprisingly, the 2019 Edelman Trust Barometer global report – encompassing a general global population of more than 33,000 respondents – shows that 76% think CEOs should take a stand on challenging issues and that 75% actually trust their employer.

We believe CEOs can and should get involved – particularly when they or their companies can uniquely help design policies that are good for America. At JPMorgan Chase, we are strengthening our public policy teams to take our advocacy and ideas to the next level. We believe the best way to scale programs that we have seen work in cities, states and countries around the globe is to develop actionable public policies that allow more people to benefit from economic growth.

We can use our unique capabilities, data and resources to help inform infrastructure policies, corporate governance policies, affordable housing policies, financial education policies and inclusion policies, as well as small business financing and formation, community and economic development, and others. In addition, while almost all companies can help further job skills, training, and diversity and inclusion efforts, each company can also add value where it has distinct capabilities, like expertise around healthcare, infrastructure or technology.

It’s not enough just for companies to meet the letter and the spirit of the law. They can also aggressively work to improve society. They can take positions on public policy that they think are good for the country. And they can decide, with proper policies and regulatory oversight, with whom and how they will do business.

However, this does get complex. What companies cannot do is abridge the law of the land or abrogate the rights of voters and their representatives to set the law of the land. There are circumstances in which JPMorgan Chase is called upon to do things and/or set policies that should have been set by the federal government – in effect, these are decisions that the voter must decide. We work very hard to try to stay on the right side of all these issues.

In any event, things have changed. In the past, boards and advisors to boards advised company CEOs to keep their head down and stay out of the line of fire. Now the opposite may be true. If companies and CEOs do not get involved in public policy issues, making progress on all these problems may be more difficult.

6. America’s global role and engagement are indispensable.

One of the biggest uncertainties in the world today is America’s role on the world stage. A more secure and more prosperous world is also good for the long-term security and prosperity of the United States. And America’s role in building that more secure world has been and will likely continue to be indispensable.

While there are many legitimate complaints about international organizations (the North Atlantic Treaty Organization, the World Trade Organization and the United Nations), the world is better off with these institutions. America should engage and exercise its power and influence cautiously and judiciously. We should all understand that global laws, standards and norms will be established whether or not our nation participates in setting them. It is certain that we will be happier with the evolution of global standards if we help craft and implement them. We should not abdicate this role. To the contrary, it is critical that America help develop the best global standards in trade, immigration, corporate governance and many other important issues.

In closing

While I have a deep and abiding faith in the United States of America and its extraordinary resiliency and capabilities, we do not have a divine right to success. Our challenges are significant, and we should not assume they will take care of themselves. Let us all do what we can to strengthen our exceptional union.

I would like to express my deep gratitude and appreciation for the employees of JPMorgan Chase. From this letter, I hope shareholders and all readers gain an appreciation for the tremendous character and capabilities of our people and how they have helped communities around the world. I hope you are as proud of them as I am.


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Sep
23
Convert PDF to ePub
Posted by Thang Le Toan on 23 September 2019 02:00 AM

You can easily make an ebook by converting file types

Download phần mềm convert PDF to Epub: https://calibre-ebook.com/download_windows

Wondering how to make an ebook? Get a good start by formatting the original document properly before you create the PDF file. Then, use a PDF to ebook converter to convert PDF to ePub.

 

This tutorial uses Calibre to convert PDF to ePub. Calibre is a desktop ePub converter for Windows, macOS, and Linux. It’s open source and available as a free download. If you're looking to do the inverse, see our article for information on how to convert an ePub to a PDF.

Format the PDF Correctly Before You Convert PDF to ePub

A PDF file starts out as another type of file before it is converted to PDF format. Most PDF files are created in a word processor, such as Microsoft Word.

 

If you use Microsoft Word, select File > Export to create a PDF file from a Word document.

Make sure your original document file is set up and formatted properly. When your PDF is properly formatted, you’ll avoid problems when reading your ePub file.

 

The trick to creating a PDF file that converts properly into ePub is to set up the pages in a way that can be read by an e-reader and to use the word processor’s built-in formatting styles. Here are a few tips:

 
  • Use styles to format headings, indented paragraphs, numbered lists, and bullet lists.
  • Use page breaks when you intentionally want a page to stop at a particular spot. For example, at the end of each chapter.
  • Choose an 8.5” x 11” page size with a portrait orientation and .5-inch margins.
  • Left align or center align the paragraphs.
  • Use a single font for the text. Recommended fonts are Ariel, Times New Roman, and Courier.
  • Use 12 pt font size for body text and 14 pt to 18 pt for headings.
  • Create images in JPEG or PNG format with a maximum size of 600 px tall and 550 px wide. Images should be in RGB color mode and 72 DPI.
  • Do not wrap text around images. Use inline images where the text is above and below the image.
 

How to Use a PDF to eBook Converter to Create an ePub

After your PDF file is formatted correctly, open your favorite file conversion app and convert the PDF to ePub. There are a variety of ebook converters; the one you choose depends on whether you want to use a desktop app or an online tool and how much control you want over the final ebook.

 

Here’s how to make an e-book by converting a PDF file into ePub format using Calibre:

 
  1. Open Calibre.

     
  2. Select Add books to open the select book window.

    A screenshot showing the Calibre main window

    If you want to add more than one file to the library, select the Add books down arrow and choose an option to add multiple books.

  3. Navigate to the folder containing the PDF file you want to convert.

     
  4. Select the PDF file, then select Open. The PDF file is added to your Library list.

     
  5. Select the PDF file.

    A screenshot showing the Calibre library with a PDF file selected for conversion to ePub
  6. Select Convert books to open the Convert dialog box.

     
  7. Select the Output format down arrow and choose EPUB.

    A screenshot showing how to convert PDF to ePub in Calibre
  8. Edit the title, author, tags, and other metadata fields as needed.

    Select Look & feel to change the font size and paragraph spacing.

  9. Select OK when you’re done customizing options that will be applied to the converted file.

     
  10. Expand Formats and select EPUB to find the ePub file.

    A screenshot showing the location of the converted ePub file in the Calibre library
  11. Select the ePub file, select the View down arrow, then select View with calibre E-book viewer to view the file.

     
  12. Select the Next page and Previous page icons to review the ePub file output.

    screenshot of calibre
  13. When you're finished reviewing the ePub file, close the viewer to return to the Calibre library.


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Sep
12
Computer Software and types of software
Posted by Thang Le Toan on 12 September 2019 10:52 PM

What is computer software?

A computer software is a set of instructions which when given to the computer for processing provides desired functions, features, and performance. The data on which these instructions operate is also the part of the software. These computer instructions are called a computer program. The documentation that describes the working of a program is also the part of the software. In short, a software is a set of instructions that perform tasks on data to provide some features and functions and a document that describes its working.

A software has no physical appearance. You can not touch the software, however, you can use it and perform jobs. The software tells the computer how to work. Without software, the computer could be just a box with electronic chips installed in it.

Software Types and Categories

A software has various types and categories based on the use and availability in the market. There are three major classifications.

1. Application Software

An application software is a software that is used for general purpose tasks like word processing, internet browsing, calculations, emails, messaging etc. The application software can be freeware or shareware. Application software is mostly used for a particular and specified problem, for example, notepad is a word processor, similarly, MS-Word is a word processor. Application software runs on system software. Application software is a user application and is mostly used by the end users.

2. System Software

A system software is a software that helps to start and run computer systems. System software is designed to run hardware of computer system and application software. A system software is a layer between user application and hardware. A system software is used by the computer system.

3. Computer Programming Tools

Computer programming tool is a software that translates and combines source code and libraries into executable random access memory (RAM). For example, compilers and linkers.

Computer software is also categorized on the basis of copyright status. Based on copyright status, the computer software can be categorized as below.

1. Freeware

Freeware software can’t be sold. These are available for download and distribution without any kind of payment. These are copyrighted to avoid conflict of ownership, however, you can get them free.

2. Shareware

Shareware software is not available for free use. It is licensed software. You will need permission to redistribute its copies even for non-profit activity. Anyone, who wishes to use, will pay for it. For most of the shareware software, the source code is no available and can’t be modified.

3. Free software

Free software is available free for copy and distribution, either in its original or modified form. It can be bundled with a new computer at no additional cost. The source code must be available for modification otherwise, this will not be considered a free software. Free software can be included in free versions of Linux.

4. Open source software

Open source software is a software that can be made available to anyone and its source code is available to everyone. Anyone can modify and update it but any change made should broadcast to all other developers. Open source is the shared intellectual property of all developers.

5. Copylefted software

Copyleft software is free and carries more or less same distribution. No addition of new requirement is allowed.

6. Non-copylefted free software

Non-copylefted is also free software but it comes from the author along with permission to modify and redistribute and to add license restrictions.

 

Author: Arslan ud Din Shafiq

Alibaba Cloud MVP, Alibaba Cloud Technical Author, Dzone MVB, Software Engineer, Software Developer, Software Designer, Web Engineer, Web Developer, Web Designer, Database Designer, Database Developer, Cloud Computing Specialist, Linux Expert, Servers, 3D Modeling, Blogger, Facebook Map Editor, Google Map Editor


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Sep
9
AIOps (artificial intelligence for IT operations)
Posted by Thang Le Toan on 09 September 2019 11:09 PM

Artificial intelligence for IT operations (AIOps) is an umbrella term for the use of big data analytics, machine learning (ML) and other artificial intelligence (AI) technologies to automate the identification and resolution of common information technology (IT) issues. The systems, services and applications in a large enterprise produce immense volumes of log and performance data. AIOps uses this data to monitor assets and gain visibility into dependencies without and outside of IT systems.

An AIOps platform should bring three capabilities to the enterprise:

  1. Automate routine practices.

Routine practices include user requests as well as non-critical IT system alerts. For example, AIOps can enable a help desk system to process and fulfill a user request to provision a resource automatically. AIOps platforms can also evaluate an alert and determine that it does not require action because the relevant metrics and supporting data available are within normal parameters.

  1. Recognize serious issues faster and with greater accuracy than humans.

IT professionals might address a known malware event on a noncritical system, but ignore an unusual download or process starting on a critical server because they are not watching for this threat. AIOps addresses this scenario differently, prioritizing the event on the critical system as a possible attack or infection because the behavior is out of the norm, and deprioritizing the known malware event by running an antimalware function.

  1. Streamline the interactions between data center groups and teams.

AIOps provides each functional IT group with relevant data and perspectives. Without AI-enabled operations, teams must share, parse and process information by meeting or manually sending around data. AIOps should learn what analysis and monitoring data to show each group or team from the large pool of resource metrics.

Use Cases

AIOps is generally used in companies that use DevOps or cloud computing and in large, complex enterprises. AIOps aids teams that use a DevOps model by giving development teams additional insight into their IT environment, which then gives the operations teams more visibility into changes in production. AIOps will also remove a lot of risks involved in hybrid cloud platforms by aiding operators across their IT infrastructure. In many cases, AIOps can help any large company that has an extensive IT environment. Being able to automate processes, recognize problems in an IT environment earlier and aid in smoothing communications between teams will help a majority of large companies with extensive or complicated IT environments.  

AIOps Explained
Learn what AIOps is, the various technologies that underpin it, and the benefits and challenges enterprise IT teams can expect when they implement AIOps platforms.
 
Learn the basics of AIOps

AIOps technologies

AIOps uses a conglomeration of various AI strategies, including data output, aggregation, analytics, algorithms, automation and orchestration, machine learning and visualization. Most of these technologies are reasonably well-defined and mature.

AIOps data comes from log files, metrics and monitoring tools, helpdesk ticketing systems and other sources. Big data technologies aggregate and organize all of the systems' output into a useful form. Analytics techniques can interpret the raw information to create new data and metadata. Analytics reduces noise, which is unneeded or spurious data and also spots trends and patterns that enable the tool to identify and isolate problems, predict capacity demand and handle other events.

Analytics also requires algorithms to codify the organization's IT expertise, business policies and goals. Algorithms allow an AIOps platform to deliver the most desirable actions or outcomes -- algorithms are how the IT personnel prioritize security-related events and teach application performance decisions to the platform. The algorithms form the foundation for machine learning, wherein the platform establishes a baseline of normal behaviors and activities, and can then evolve or create new algorithms as data from the environment changes over time.

Automation is a key underlying technology to make AIOps tools take action. Automated functions occur when triggered by the outcomes of analytics and machine learning. For example, a tool's predictive analytics and ML determine that an application needs more storage, then it initiates an automated process to implement additional storage in increments consistent with algorithmic rules.

Finally, visualization tools deliver human-readable dashboards, reports, graphics and other output so users follow changes and events in the environment. With these visualizations, humans can take action on information that requires decision-making capabilities beyond those of the AIOps software.

Stages of the AIOps process
 

AIOps benefits and drawbacks

When properly implemented and trained, an AIOps platform reduces the time and attention of IT staff spent on mundane, routine, everyday alerts. IT staff teaches AIOps platforms, which then evolve with the help of algorithms and machine learning, recycling knowledge gained over time to further improve the software's behavior and effectiveness. AIOps tools also perform continuous monitoring without a need for sleep. Humans in the IT department focus on serious, complex issues and on initiatives that increase business performance and stability.

AIOps software can observe causal relationships over multiple systems, services and resources, clustering and correlating disparate data sources. Those analytics and machine learning capabilities enable software to perform powerful root cause analysis, which accelerates the troubleshooting and remediation of difficult and unusual issues.

AIOps can improve collaboration and workflow activities between IT groups and between IT and other business units. With tailored reports and dashboards, teams can understand their tasks and requirements quickly, and interface with others without learning everything the other team needs to know.

Although the underlying technologies for AIOps are relatively mature, it is still an early field in terms of combining the technologies for practical use. AIOps is only as good as the data it receives and the algorithms that it is taught. The amount of time and effort needed to implement, maintain and manage an AIOps platform can be substantial. The diversity of available data sources as well as proper data storage, protection and retention are all important factors in AIOps results.

AIOps demands trust in tooling, which can be a gating factor for some businesses. For an AIOps tool to act autonomously, it must follow changes within its target environment accurately, gather and secure data, form correct conclusions based on the available algorithms and machine learning, prioritize actions properly and take the appropriate automated actions to match business priorities and objectives.

Implementing AIOps and AIOps vendors

To demonstrate value and mitigate risk from AIOps deployment, introduce the technology in small, carefully orchestrated phases. Decide on the appropriate hosting model for the tool, such as on-site or as a service. IT staff must understand and then train the system to suit needs, and to do so must have ample data from the systems under its watch.


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Apr
12
How to install ZFS on Linux
Posted by Thang Le Toan on 12 April 2019 03:05 PM

ZFS on Linux lets admins error correct in real time and use solid-state disks for data caching. With the command-line interface, they can install it for these benefits.

ZFS is a file system that provides a way to store and manage large volumes of data, but you must manually install it.

ZFS on Linux does more than file organization, so its terminology differs from standard disk-related vocabulary. The file system collects data in pools. Vdevs, or virtual devices, make up each pool and provide redundancy if a physical device fails. You can store these pools on a single storage disk -- which is not a good idea if you encounter file corruption or if the drive fails -- or many disks.

 

Benefits of ZFS

It is free to install ZFS on Linux, and it provides robust storage with features such as:

  • on-the-fly error correction;
  • disk-level, enterprise-strength encryption;
  • transactional writes -- writing all or none of the data to ensure integrity;
  • use of solid-state disks to cache data; and
  • use of high-performance software rather than proprietary RAID hardware.

ZFS on Linux offers significant advantages over more traditional file systems such as ext, the journaling file system and Btrfs. With ZFS, it is easy to create a crash-consistent point in time that you can easily back up. ZFS can also support massive file sizes of up to 16 exabytes if the hardware meets performance requirements.

How to install ZFS

To install ZFS on Linux, type sudo apt-get install zfsutils-linux -y into the command-line interface (CLI). This example shows how to create a new ZFS data volume that spans two disks, but other ZFS disk configurations are also available. This tutorial uses the zfs-utils setup package.

Initial ZFS install commands
ZFS1: To start the installation process, type sudo apt-get install zfsutils-linux -y into the command-line interface.
 

Next, create the vdev disk container. This example adds two 20 GB disks. To identify the disks, use the sudo fdisk -l command. In this case, the two disks are /dev/sdb and /dev/sdc.

Identifying ZFS pool discs
ZFS2: Use sudo fdisk -l to identify which disks you want to use for data storage.
 

Now you can create the mirror setup with sudo zpool create mypool mirror /dev/sdb /dev/sdc.

Depending on the disk reader's setup when you install ZFS, you might get an error that states "/dev/sdb does not contain an extensible firmware interface label but it may contain partition information in the master boot record."

To fix it, use the -f switch so the full command is sudo zpool create -f mypool mirror /dev/sdb /dev/sdc. If you are successful, you won't receive an output or error message.

To reduce root folder clutter, group the ZFS in a subfolder instead of in the root drive.

At this point, the system creates a pool. To check the pool's status, use the sudo zpool status command. The CLI will show the following status and the included volumes.

Command-line interface with pool status
ZFS3: A snapshot of the pool creation status during the ZFS installation
 

Your pools should automatically mount and be available within the system. The pools' default location is in a directory off the root folder with the pool name. For example, mypool will mount on the /mypool folder, and you can use the pool just like any other mount point.

If you're not sure of a pool location, use sudo zfs get all | grep mountpoint to show which mount point the program uses and identify the mount point needed to bring the pool online.

Mount point identification in ZFS
ZFS4: One command in ZFS helps you identify which programs the mount point uses.
 

With your data pools online, you can set most ZFS options via the CLI with sudo zfs. To set up more advanced ZFS functions, such as how to snapshot a read-only version of a file system, define storage pool thresholds or check data integrity with the checksum function, search the in-system ZFS resources with man zfs and reference the Ubuntu ZFS wiki.

If you're new to ZFS, double-check commands before you run them and ensure you understand how they move data within pools, address storage limits and sync data.


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Apr
8
The 2019 Microsoft Product Roadmap
Posted by Thang Le Toan on 08 April 2019 03:23 AM

From the next major update to Windows 10 to the next generation of HoloLens, here's what's on tap from Microsoft this year.

RECENTLY UPDATED: Windows 10 (4/5), Dynamics 365 (4/5), Visual Studio 2019 (4/2), System Center 2019 (3/29)

Windows 10 '19H1' and Beyond (UPDATED: 4/5)
Anticipated release: Spring and fall of 2019
Windows Server 'vNext' (UPDATED: 3/19)
Anticipated release: Spring and fall of 2019
System Center 2019 (UPDATED: 3/29)
Released
Dynamics 365 (UPDATED: 4/5)
April '19 update: Released
BizTalk Server 'vNext'
Anticipated release: Second half of 2019
Visual Studio 2019 (UPDATED: 4/2)
Released
Azure DevOps Server 2019 (UPDATED: 3/5)
Released
HoloLens 2 (UPDATED: 2/24)
Anticipated release: First half of 2019
SQL Server 2019 (UPDATED: 3/28)
Anticipated release: Second half of 2019
Roadmap Archives:
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011

Click on a product above to jump to that section.


Windows 10 '19H1' and Beyond
Anticipated release: Spring and fall of 2019

UPDATES

April 5: Microsoft begins preparing all "fast ring" Windows Insiders to receive Windows 20H1 builds, and will begin testing Windows 10 19H2 "later this spring."

April 4: Windows 10 19H1, officially called the "Windows 10 May 2019 Update," will reach the "release preview" stage next week, with general availability set for "late May," according to Microsoft.

March 28: Windows 10 version 1809 is now approved for "broad deployment," Microsoft says.

March 27: Test build 18865 of Windows 10 20H1 is released to Insiders.

March 20: Windows 10 20H1 test build 18860 and 19H1 test build 18362 are released.

March 19: Microsoft releases test build 18361 of Windows 10 19H1.

March 15: Windows 10 19H1 build 18358 is released to testers.

March 13: Test build 18855 of Windows 10 20H1 is released to Insiders.

March 12: Microsoft releases Windows 10 19H1 test build 18356.

March 8: Test build 18353 of Windows 10 19H1 is released to Insiders.

March 6: Windows 10 20H1 test build 18850 is released to Insiders.

March 5: Test build 18351 of Windows 10 19H1 is released.

March 1: Microsoft releases test build 18348 of Windows 10 19H1.

Feb. 28: Windows 10 20H1 test build 18845 is released to Insiders.

Feb. 26: Microsoft will begin broad testing of the Lite OS this summer, after announcing it at Build, according to a Petri report. • Test build 18346 of Windows 10 19H1 is released.

Feb. 22: Microsoft releases test build 18343 of Windows 10 19H1 and test build 18841 of 20H1.

Feb. 20: Test build 18342 of 19H1 is released to Insiders. • Windows "Lite" is now internally code-named "Santorini" and could debut as a preview during May's Build conference, according to a report by Windows Central's Zac Bowden citing unnamed sources.

Feb. 14: Microsoft begins releasing test builds of Windows 10 20H1, ahead of the first 19H2 test builds, which will not be released to Insiders until "later this spring." • Microsoft is developing a Windows derivative called "Lite" that will compete with the Google Chrome OS and will run on devices code-named "Centaurus" and "Pegasus," according to a report by Petri's Brad Sams.

Feb. 8: Preview build 18334 of Windows 10H1 is released to testers.

Feb. 1: Mirosoft releases test build 18329 of Windows 10 19H1 to Insiders.

Microsoft is widely expected to release the next major version of Windows 10, thought to be version 1903 and code-named "19H1," in April 2019. The desktop operating system follows a biannual (or "semiannual") upgrade release cycle, with major OS "feature updates" arriving in the spring and fall. Microsoft offers Windows 10 as both a semiannual channel Windows as a Service product, and as a more traditional long-term servicing channel product where new updates arrive every two or three years.

Preview builds of Windows 10 19H1 have been rolling out to users enrolled in the Windows Insider program since July 2018. Besides minor feature additions and some tweaks to the UI, a couple of more significant changes have come to light, including the brand-new "Windows Sandbox." Expected to be part of the Pro and Enterprise editions of Windows 10, Sandbox is described by Microsoft as a walled-off computing environment where users can run new apps in isolation, keeping the rest of their PC protected. "Any software installed in Windows Sandbox stays only in the sandbox and cannot affect your host," Microsoft said in its announcement. "Once Windows Sandbox is closed, all the software with all its files and state are permanently deleted."

Another new capability expected in Windows 10 19H1 is the "Reserved Storage" feature, which will set aside about 7GB of a PC's disk space for new Windows 10 updates. This reserved space will help ensure that applications are able to properly run after an OS update, according to Microsoft.

"Without reserved storage, if a user almost fills up her or his storage, several Windows and application scenarios become unreliable. Windows and application scenarios may not work as expected if they need free space to function. With reserved storage, updates, apps, temporary files, and caches are less likely to take away from valuable free space and should continue to operate as expected," the company said in a January blog post announcing the feature.

Beyond the spring release, Microsoft is expected to roll out the year's second Windows 10 feature update around October. A report by veteran Microsoft reporter Mary Jo Foley suggested that Microsoft may break with tradition regarding this second release's code name, calling it "Vanadium" instead of the expected "19H2." At any rate, the earliest public test builds of this second release are expected to appear in the early part of 2019 as development for Windows 10 19H1 wraps up. [BACK TO PRODUCT LIST]


Windows Server 'vNext'
Anticipated release: Spring and fall of 2019

UPDATES

March 19: Microsoft releases test build 18356.1 to Insiders.

March 5: Test build 18346 of Windows Server vNext is released to Insiders.

Feb. 12: Microsoft releases test build 18334 of Windows Server vNext.

As of this writing, the next major version of Windows Server is three test builds in, the first build having arrived back in November 2018. Like its desktop OS counterpart, Windows Server gets "feature updates" on a biannual (or "semiannual") release cadence, which go by version numbers. There's also a long-term servicing channel product option, where new upgrades arrive every two or three years.

Microsoft also releases a more traditional Windows Server product. Windows Server 2019, released back in October 2018, was the last such product. It doesn't get OS upgrades as frequently as the vNext semiannual product offering. The name and timing of the next traditional Windows Server product hasn't been announced.

Organizations can expect the first Windows Server vNext feature update release, perhaps version 1903, to arrive sometime in the spring (likely in April, coinciding with the release of Windows 10 19H1). A second feature update release is planned for the fall.

Outside of Microsoft's perfunctory release notes for each Windows Server vNext test build, the company thus far hasn't spotlighted any major changes or improvements to expect. Microsoft did hint at "new innovations in networking" when it issued test build 18298 in December, but said further details won't come until "the early new year."

The last test build as of this writing, build 18317, also spotlighted a new feature that enables organizations "to support multiple CI [code integrity] policies." [BACK TO PRODUCT LIST]


System Center 2019
Released

UPDATES

March 27: Microsoft releases update 1902 of System Center Configuration Manager (SCCM).

March 14: System Center 2019 becomes generally available.

March 7: Microsoft announces a March release for System Center 2019.

The "2019"-branded iteration of the System Center management suite is due sometime in the first quarter of the year, according to a Microsoft document (PDF download).

System Center is a suite of eight products, called "components," that consist of Configuration Manager, Data Protection Manager, Operations Manager, Orchestrator, Service Manager, Service Management Automation, Virtual Machine Manager, and Service Provider Foundation. Microsoft delivers major updates to System Center on a biannual (or "semiannual") basis in the spring and fall, a practice that started for the whole suite with the release of System Center version 1801 last year, although the Configuration Manager component is an exception in that it gets major updates three times per year. A long-term servicing channel version of the product, which gets new "feature updates" every two or three years, is also available.

System Center 2019 will incorporate "[n]ew features and enhancements including integration, support and alignment with Windows Server 2019," according to the Microsoft document. It'll also include "[s]torage optimization and improvements to RBAC [role-based access control] in VMM [Virtual Machine Manager]."

Microsoft's Q1 release of System Center 2019 will be the first long-term serving channel release of the product, according to a detailed blog post by Microsoft MVP Thomas Maurer. It'll bring greater integration between servers and Microsoft's Azure datacenters with coming "hybrid cloud" improvements, he noted. [BACK TO PRODUCT LIST]


Dynamics 365
April '19 update: Released

UPDATES

April 3: Microsoft releases Dynamics 365 Customer Insights.

April 2: Microsoft holds a virtual "launch event" ahead of the April '19 release.

Feb. 24: Microsoft announces the preview of Dynamics 365 Guides.

Feb. 21: Microsoft announces previews of Dynamics 365 Product Visualize for iOS and Dynamics 365 Remote Assist for Android, as well as the upcoming preview of Dynamics 365 Fraud Protection in April. • Microsoft updates the April '19 product release notes.

As of last July, Dynamics 365, Microsoft's enterprise resource planning solution, became another Microsoft product on a twice-yearly "feature update" schedule. The first of these updates, scheduled to be released on April 5 (following a Feb. 1 preview), will be a big one.

The April 5 "general availability" release of Dynamics 365 will be "the first major update where all of our customers across Dynamics 365 will be on the latest version and on a consistent update schedule," Microsoft explained in an announcement at the end of 2018. "It's also a template of how major updates will be done going forward in April and October every year."

Microsoft's release notes for this so-called "April '19 update" of Dynamics 365 became available just last month as a massive 315-page .PDF that the company plans to update in February as more features emerge. Already, the document lists "hundreds of new capabilities" coming in the April '19 update, including mixed reality and artificial intelligence enhancements across the entire suite.

The update will also integrate Dynamics 365 with Microsoft's Power Platform, which combines the company's various business analytics services -- namely PowerApps, Power BI and Flow. This integration will let Dynamics 365 users "build higher-quality reports, apps, and workflows more easily, while still supporting more advanced enterprise and administrator requirements," according to Microsoft. [BACK TO PRODUCT LIST]


BizTalk Server 'vNext'
Anticipated release: Second half of 2019

It's been well over two years since the last major release of Microsoft's enterprise integration server, BizTalk Server, became available. The next generation of the product is due sometime in mid-2019, based on the broad timeframe that Microsoft gave in an August 2018 announcement. At that time, Microsoft indicated that it would release BizTalk Server "vNext" about nine months after Windows Server 2019.

The official launch of Windows Server 2019 came in October 2018 (though problems with the update caused Microsoft to subsequently pull the product and then rerelease it about a month later). That would put BizTalk Server's release somewhere after the mid-point of 2019.

Microsoft so far hasn't revealed much about its plans for BizTalk Server vNext, though its August 2018 blog post did indicate that it "will contain all previously released feature packs, platform support for the latest versions of Windows Server, SQL Server and Visual Studio, as well as a supported upgrade path from BizTalk Server 2013 R2 and 2016." The new release will have also "vNext" versions of the BizTalk Adapter Pack and Microsoft's Host Integration Server (HIS). [BACK TO PRODUCT LIST]


Visual Studio 2019
Released

UPDATES

April 2: Visual Studio 2019 becomes generally available.

March 5: Preview 3 of Visual Studio 2019 for Mac is released.

Feb. 27: Microsoft releases the Visual Studio 2019 release candidate.

Feb. 14: The Visual Studio 2019 "launch event" will be on April 2, according to Microsoft.

Feb. 13: Microsoft releases Preview 3 of Visual Studio 2019.

Microsoft first signaled that the next major release of Visual Studio was in the works back in the summer of 2018, soon after it acquired the open source code repository GitHub. Visual Studio 2019 is expected to be released sometime in the first half of 2019, roughly two years after the last current flagship version, Visual Studio 2017, rolled out.

As of this writing, Microsoft has released two preview versions of Visual Studio 2019, the first in late 2018 and the second in January 2019. According to reporting by our sister site, VisualStudioMagazine.com, the new release will include (among other things) AI-enhanced coding capabilities via the IntelliCode feature, improvements to the UI and collaboration capabilities, and enhancements to the "core IDE experience." It will also incorporate improvements aimed at Python, C# and mobile .NET developers. [BACK TO PRODUCT LIST]


Azure DevOps Server 2019
Released

UPDATES

March 5: Azure DevOps Server 2019 becomes generally available.

The successor to Microsoft's Team Foundation Server (TFS) product, Azure DevOps Server 2019, had its first release candidate back in November 2018 and its second just this January. That second release candidate is the product's last before becoming generally available, Microsoft said at the time, so its likely that the production-ready version of Azure DevOps Server 2019 will roll out sometime in the first quarter.

Among the product's key features are a new UI based on Microsoft's Fluent design philosophy, integration with SQL Server and support for the Azure Pipelines automated development service. [BACK TO PRODUCT LIST]


SQL Server 2019
Anticipated release: Second half of 2019

UPDATES

March 27: Microsoft releases CTP 2.4 of SQL Server 2019.

March 1: CTP 2.3 of SQL Server 2019 is released.

It's still early days for Microsoft's next-gen database platform. SQL Server 2019's first public outing was at the 2018 Ignite conference last fall, when Microsoft made it available as a Community Technology Preview (CTP). As of this writing, Microsoft has issued just one other CTP build back in December. Though Microsoft hasn't given a definitive timeline for release, it's fair to say that SQL Server 2019 likely won't hit the general availability milestone until later in 2019 -- perhaps November, to coincide with the 2019 Ignite event.

Microsoft has a lot of enhancements planned for SQL Server 2019, a big one being SQL Server Big Data clusters. SQL Server expert and Redmond columnist Joey D'Antoni described Big Data clusters as "a scale-out, data virtualization platform built on top of the Kubernetes (K8s) container platform." Also new to SQL Server 2019 is a feature called Accelerated Database Recovery (ADR), which expedites the process of undoing and rolling back database transactions.

Improvements are also coming to SQL Server's Always On Availability Group stack and the Always Encrypted security solution, as well as overall database performance. Microsoft is also promising support for Apache Spark and the Hadoop Distributed File System, as well as the ability to deploy Python- and R-based applications on clusters. [BACK TO PRODUCT LIST]


HoloLens 2
Anticipated release: First half of 2019

UPDATES

Feb. 24: Microsoft unveils HoloLens 2 at Mobile World Congress and begins taking preorders.

Feb. 11: Microsoft releases a Mobile World Congress teaser video that purportedly shows the new AI processor for HoloLens 2.

It's been roughly four years since Microsoft first debuted HoloLens, its augmented reality headset, which is being positioned as an industrial diagnostic tool on top of being a gaming peripheral. HoloLens was ground-breaking technology at the time, but as the rest of the industry caught up with other mixed-reality, virtual-reality and 3-D platforms and devices, that first-generation headset is now, as Redmondmag.com columnist Brien Posey put it, "starting to show its age."

Microsoft now appears set to unveil version 2 of HoloLens sometime in the first half of 2019. Possibly, it'll make an appearance at the Mobile World Congress event in late February, per some reports.

Details are scant about Microsoft's HoloLens 2 plans. However, Microsoft did confirm at its 2018 Build conference that it is resurrecting its old Kinect motion-sensing device with plans to turn it into an intelligent camera for the new HoloLens (among other use cases).

Microsoft has also described its work around developing an improved "holographic processing unit" for HoloLens that will leverage AI to process deep neural networks. Reports also suggested that the new device will run on Qualcomm's Snapdragon 850 system-on-a-chip

----------

2018 Roadmap Archive
The following products were featured in our 2018 Microsoft Product Roadmap. Click on a product name to jump to that section.

Windows 10
Teams and Skype for Business
Office 2019
SharePoint Server 2019
Exchange Server 2019
Dynamics 365
Windows Server and "Project Honolulu"
Visual Studio 2019
BizTalk Server "vNext"


Windows 10
"Redstone 5": Released
"Redstone 4": Released

UPDATES

Dec. 19: Microsoft unveils a new "Office" app for Windows 10.

Dec. 18: Microsoft announces a new feature called Windows Sandbox expected for Windows 10 19H1.

Dec. 17: Microsoft updates its Windows 10 update history page to designate version 1809 as "fully available."

Dec. 10: Windows 10 19H1 preview build 18298 is released to testers.

Nov. 28: Microsoft releases test build 18290 of Windows 10 19H1.

Nov. 14: Windows 10 19H1 test build 18282 is released to Insiders.

Nov. 13: Microsoft officially re-issues the Windows 10 October 2018 Update.

Nov. 7: Test build 18277 of Windows 10 19H1 is released to Insiders.

Oct. 31: The next two Windows 10 updates following 19H1 will be code-named "Vanadium" and "Vibranium," according to a report by ZDNet's Mary Jo Foley, citing unnamed sources. • Test build 18272 of Windows 10 19H1 is released to testers.

Oct. 24: Microsoft releases build 18267 of Windows 10 19H1 to Insiders.

Oct. 17: Windows 10 19H1 preview build 18262 is released to testers.

Oct. 9: Microsoft says it is retesting the fixed version of the October 2018 Update before officially re-releasing it.

Oct. 6: Microsoft has paused the October 2018 Update rollout to "investigate isolated reports of users missing some files after updating," according to an update on the Windows 10 update history page.

Oct. 3: Microsoft releases Windows 10 19H1 test build 18252 to Insiders.

Oct. 2: Microsoft announces the release of the Windows 10 October 2018 Update.

Sept. 26: Windows 10 19H1 test build 18247 is released to Insiders.

Sept. 25: The Windows 10 October 2018 Update could be released on Oct. 2, according to reports.

Sept. 18: The Windows 10 October 2018 Update test build 17763, possibly the RTM build, is released to Insiders. • Microsoft also releases test build 18242 of Windows 10 19H1.

Sept. 14: Build 17760 of the Windows 10 October 2018 Update is released to testers.

Sept. 12: Build 18237 of Windows 10 19H1 is released to testers.

Sept. 11: Microsoft releases build 17758 of the Windows 10 October 2018 Update to Insiders.

Sept. 7: Build 17755 of the Windows 10 October 2018 Update is released to testers.

Sept. 6: Microsoft releases a new test build, 18234, of the "19H1" release of Windows 10.

Sept. 5: Test build 17754 of the Windows 10 October 2018 Update is released to Insiders.

Aug. 31: The official name for Redstone 5 will be the "Windows 10 October 2018 Update," according to a Microsoft announcement.

Aug. 24: Microsoft releases Redstone 5 Insider build 17746.

Aug. 21: Redstone 5 preview build 17744 is released to Insiders.

Aug. 16: The next major releases of Windows 10 and Windows Server will feature smaller monthly updates, according to Microsoft.

Aug. 14: Redstone 5 test build 17738 is released to Insiders.

Aug. 10: Microsoft releases Redstone 5 test build 17735 and 19H1 test build 18214.

Aug. 8: Redstone 5 test build 17733 is released to Insiders. • Microsoft is reportedly developing a sandboxed computing environment for Windows 10 Enterprise called "InPrivate Desktop," according to BleepingComputer.

Aug. 3: Microsoft may add a new SKU called "Windows 10 Enterprise for Remote Sessions" as part of Redstone 5, according to reports. • Redstone 5 test build 17730 is released to Insiders.

Aug. 2: Microsoft is developing a Windows Pseudo Console for the next Windows 10 release.

July 31: Redstone 5 test build 17728 is released to Insiders.

July 25: Microsoft releases Redstone 5 test build 17723, as well as build 18204, the first test build of "Redstone 6" (code-named 19H1).

July 18: Microsoft releases the public preview of Windows 10 IoT Core Services.

July 11: Microsoft releases test build 17713 of Redstone 5. • Redstone 5 will officially be called "Windows 10 October 2018 Update," according to Microsoft watcher WalkingCat.

July 10: The Windows 10 April 2018 Update is now the semiannual channel release, Microsoft announces.

July 6: Test build 17711 of Redstone 5 is released to Insiders.

June 27: Redstone 5 test build 17704 is released to Insiders without the "Sets" feature.

June 14: The Windows 10 April 2018 Update is now in the "full availability" stage, Microsoft says. • Redstone 5 test build 17692 is released to Insiders.

June 6: Redstone 5 test build 17686 is released to Insiders.

May 31: Microsoft releases build 17682 of Redstone 5 to testers.

May 24: Redstone 5 test build 17677 is released to Insiders.

May 22: The Windows 10 April 2018 Update will arrive to HoloLens "soon," according to Microsoft.

May 16: Test build 17672 of Redstone 5 is released to Insiders.

May 9: Microsoft releases Redstone 5 test build 17666.

May 3: Redstone 5 test build 17661 is released to Insiders.

April 30: Microsoft releases the Windows 10 April 2018 Update.

April 27: Microsoft announces that Redstone 4, officially called the Windows 10 April 2018 Update, will become generally available on April 30.

April 25: Redstone 4 could be released on May 8 in the U.S., according to a purported leak of an internal memo to Chinese retailers. • Redstone 5 test build 17655 is released to Insiders.

April 22: Redstone 4's official name might be "Windows 10 April Update," according to reports.

April 20: Microsoft is reportedly working on a lightweight version of Windows 10 called "Lean."

April 19: Redstone 5 test build 17650 is released to Insiders.

April 16: Redstone 4 could be officially named "Windows 10 April 2018 Update," according to a report. • Microsoft releases Redstone 4 test build 17134 to Insiders and explains the previously intended RTM build had suffered from BSOD issues.

April 13: Microsoft no longer considers Redstone 4 test build 17133 to be the RTM version, delaying the product's release, according to a Windows Central report.

April 12: Microsoft releases Redstone 5 test build 17643 to Insiders.

April 4: Microsoft updates Sets in Redstone 5 test build 17639.

March 29: Redstone 5 test build 17634 is released to Insiders.

March 27: Test build 17133 for Redstone 4 is released to Insiders.

March 26: Microsoft releases a preview of HoloLens for Redstone 4.

March 23: Redstone 4 test build 17128 is released with the "Insider Preview" watermark removed, which marks the "phase of checking in final code to prepare for the final release," according to Microsoft.

March 20: Redstone 4 test build 17127 is released to Insiders.

March 16: Microsoft releases test build 17123 of Redstone 4 to Insiders. • Redstone 5 test build 17623 is also released to Insiders.

March 13: An update to a Microsoft blog indicates Redstone 4 will be released in April. • Test build 17120 of Redstone 4 is released to Insiders.

March 8: Reports indicate that Redstone 4's official name will be the "Spring Creators Update."

March 7: All Windows 10 editions will come with an optional and free S Mode, according to Microsoft. • Microsoft releases build 17618 for Redstone 5 to testers. • Microsoft announces a new AI platform for developers coming in Redstone 4.

March 6: Redstone 4 test build 17115 is released to Insiders. • Microsoft says it is readying new privacy features in Windows 10 to be released "this spring." • Microsoft's Joe Belfiore confirms in a Tweet that Windows 10 S will become a "mode" starting in 2019, not a "distinct version."

March 2: Redstone 4 test build 17112 is released to Insiders.

Feb. 27: Microsoft announces it will extend support for Windows 10 IoT Core and Windows 10 IoT Enterprise to 10 years with Redstone 5. • Test build 17110 of Redstone 4 is released to Insiders.

Feb. 23: Redstone 4 test build 17107 is released to Insiders.

Feb. 14: Microsoft release Redstone 4 test build 17101 in addition to the first Redstone 5 test build (17604).

Feb 7: Microsoft releases Redstone 4 test build 17093 to Insiders.

Feb. 3: Microsoft is introducing a new Windows 10 SKU lineup for consumers with Redstone 4, reports Thurrott.com's Brad Sams. • A separate report indicates that Windows 10 S will no longer be a standalone SKU, but will be included in all Windows 10 versions as an "S mode."

Microsoft's semiannual release schedule for Windows 10 is less of a novelty now than it was back in 2015, when Microsoft ushered in the OS under a new "as-a-service" model. Three years and five version updates later, Microsoft is expected to stick to an update model it nailed down last year, with one major update release coming in the first half of the year (usually spring) and another in the second (usually fall).

The first major update, code-named "Redstone 4," has been in the works since August 2017, when the first preview build was made available to Windows Insider testers. Based on each subsequent build's release notes, Redstone 4 looks to be focused largely on feature refinements and usability improvements. There's more support for fonts and languages. The touch keyboard and handwriting features are constantly getting improvements, along with the Edge browser and the Windows Shell. New connectivity and power management enhancements are in the works. And with each build, Microsoft is activating more fluent design components.

There are a couple of brand-new additions, too. In the works for Redstone 4 is a new "Near Share" feature that lets Windows 10 users exchange files with PC users in their vicinity via Bluetooth. Microsoft is also reinstating the "Timeline" feature, which had originally been slated to appear in last October's Fall Creators Update. Timeline essentially lets Windows 10 users keep a record of their recent activities in any given app, making it easier to resume a task when they pull up that app again. And in a more recent build, Microsoft debuted a privacy app called "Windows Diagnostic Data Viewer" that gives users and administrators a better handle on the kinds of telemetry data that Microsoft collects from Windows 10 devices.

Redstone 4 will be followed by another release code-named "Redstone 5" in the later part of 2018. This early in the year, it might be too early to forecast exactly what Microsoft has planned for this second release, though there's at least one feature that Microsoft has already bumped from Redstone 4 and into Redstone 5. "Sets," which first cropped up last November in a Redstone 4 build, is a workspace-management interface that revolves around tabs. Microsoft described Sets as a way "to make sure that everything related to your task: relevant webpages, research documents, necessary files and applications, is connected and available to you in one click." Earlier this year, Microsoft announced that it was pulling Sets from future Redstone 4 builds, though it will restore the feature in a "post-RS4 flight." Presumably, that means Redstone 5.

For those waiting for future Windows Mobile/Windows Phone developments, however, don't hold your breath. Microsoft's mobile efforts have been stagnating for some time now, but a Tweet earlier this year from Senior Program Manager Brandon LeBlanc put another nail in the coffin: "No mobile builds are coming." [BACK TO 2018 PRODUCT LIST]


Teams and Skype for Business
Teams updates: Throughout 2018
Skype for Business Server 2019: Released

UPDATES

Oct. 22: Skype for Business Server 2019 is now generally available.

Sept. 24: Microsoft announces new Teams capabilities at Ignite, and that Skype for Business Server 2019 will be released "by end of year."

Sept. 18: Teams is generally available for the Surface Hub.

Aug. 24: Microsoft deems Teams a "complete meeting and calling solution" that's suitable to replace Skype for Business in organizations.

July 24: Skype for Business Server 2019 becomes available as a commercial preview.

July 16: Microsoft now considers Teams and Skype for Business to have "feature parity," according to reports.

July 12: Microsoft officially releases a free version of Teams.

June 28: Teams Direct Routing is now generally available. • Microsoft says U.S. Government Community Cloud users will start to get Teams on July 17, with the rollout expected to be completed by the end of August.

June 13: Microsoft observer WalkingCat points to Microsoft documentation detailing the rumored free Teams tier.

May 15: Microsoft launches a preview of Direct Routing in Teams.

May 2: Microsoft announces a free one-year trial offer for Teams starting June 1.

May 7: Microsoft announces new Teams capabilities at Build 2018.

April 20: The Skype for Business and Teams apps for Windows Phone will be retired on May 20, according to Microsoft.

April 5: Microsoft rolls out a combined Teams-Skype for Business management portal.

March 13: Microsoft has begun testing the Teams progressive Web app (PWA), according to a Petri report.

March 12: Microsoft details new features coming to Teams, including support for Skype Room Systems and the Surface Hub in the first half of 2018, and "Direct Routing" in Q2.

Feb. 27: Microsoft extends the Teams guest access feature.

Feb. 26: Microsoft may be planning a "freemium tier" for Teams, according to a Petri report.

Feb. 8: Microsoft is keeping the Standard edition for Skype for Business Server 2019, contrary to earlier plans.

Feb. 5: A preview of the Call Analytics feature is now available in Teams, along with other new capabilities.

Barely a year old, Teams is already being positioned by Microsoft as an integral piece of its enterprise collaboration portfolio. The Office 365 chat service launched last March as Microsoft's answer to the popular collaboration startup, Slack. Since then, Microsoft has taken significant steps to bolster Teams' enterprise bona fides through regular updates,  providing IT management tools, mobile app support, integration with popular third-party apps like Dropbox and Google Drive, and a "guest access" feature that lets users collaborate with members of outside organizations. Microsoft has also been stumping for Teams in the academic space, offering it to schools through the no-cost Office 365 for Education plan, and rolling out UI features designed specifically for students and teachers.

Now, Microsoft plans to advance Teams even further by making it the company's primary unified communications (UC) offering, effectively replacing Skype for Business. Microsoft first announced the planned transition last September at the Ignite conference, calling the move part of its "new vision for intelligent communications." That vision entails Teams inheriting Skype's voice calling and meeting capabilities, as well as AI and machine learning capabilities via the Microsoft Graph, while running on Skype's infrastructure for the back-end.

Those Skype calling capabilities became available in Teams last December. By the end of Q2 2018, Microsoft also expects to add screen-sharing, third-party video support, voicemail capabilities and transcription/recording services. Other features, including "location-based routing," "group call pickup," "call park" and "shared line appearance," are due by year's end, according to Microsoft.

Despite its seeming demotion, Skype for Business isn't going away anytime soon. For one, the Teams-to-Skype transition could take upward of three years, industry watchers estimate. For another, Microsoft has promised to continue supporting Skype for Business Online and Skype for Business Server, with a new server release expected in the second half of 2018. Microsoft is also expected to enable Skype for Business-certified devices to work on Teams sometime in Q2. [BACK TO 2018 PRODUCT LIST]


Office 2019
Released

UPDATES

Dec. 19: Microsoft unveils a new "Office" app for Windows 10.

Sept. 24: Microsoft releases Office 2019 for Windows and Mac, and indicates that it plans to release at least one more "perpetual-license" version of Office in the future.

July 25: Microsoft announces Office 2019 licensing changes, including a price hike, that will take effect on Oct. 1.

June 12: Microsoft releases the preview of Office 2019 for Mac.

April 27: Microsoft launches the commercial preview of Office 2019.

April 18: Microsoft says Office 2019 will not support OneNote 2016.

Cloud may be king at Microsoft nowadays, with the Office 365 productivity suite taking much more of a leading role in Microsoft's product development efforts compared to its on-premises or retail "boxed" counterpart, but Microsoft hasn't thrown in the towel on its old-school Office software yet. At its Ignite conference, Microsoft announced that it was readying the next version of the on-premises Office product, dubbed "Office 2019," for public release sometime in the second half of 2018.

In a blog post announcing Office 2019, Microsoft Office General Manager Jared Spataro characterized the upcoming release as an olive branch to organizations that are still wary of making the move to the cloud. "Cloud-powered innovation is a major theme at Ignite this week. But we recognize that moving to the cloud is a journey with many considerations along the way. Office 2019 will be a valuable upgrade for customers who feel that they need to keep some or all of their apps and servers on-premises," he wrote.

Microsoft expects to roll out a preview of Office 2019 sometime in the second quarter, with general availability in the second half of 2018. New features coming down the pipeline, according to Spataro, include enhancements to the inking feature, improved data analysis capabilities in Excel, expanded PowerPoint animation features and better security. One notable limitation that Microsoft announced early this year: Office 2019 will not be supported on Windows versions older than Windows 10 (which means the still-popular Windows 7 is out of the running). [BACK TO 2018 PRODUCT LIST]


Visual Studio 2019
Anticipated release: First half of 2019

UPDATES

Dec. 4: The first preview of Visual Studio 2019 is released.

Nov. 20: Azure DevOps Server 2019 RC1 is released.

Oct. 17: The first preview of Visual Studio 2019 will be released by year's end, with general availability in the first half of 2019, according to a Microsoft announcement.

Sept. 10: Microsoft renames Visual Studio Team Services (VSTS) to Azure DevOps.

The next major version of Visual Studio is "now in the early planning phase," Microsoft said in June, over two years after the release of Visual Studio 2017.

This announcement represented Microsoft's first official mention of Visual Studio 2019. It was prompted by the company's freshly announced acquisition of GitHub, where Microsoft's developer teams do a lot of their work.

The Visual Studio 2019 announcement was light on concrete details, but John Montgomery, director of Visual Studio program management, gave a broad outline of what developers can expect:

Expect more and better refactorings, better navigation, more capabilities in the debugger, faster solution load, and faster builds. But also expect us to continue to explore how connected capabilities like Live Share can enable developers to collaborate in real time from across the world and how we can make cloud scenarios like working with online source repositories more seamless. Expect us to push the boundaries of individual and team productivity with capabilities like IntelliCode, where Visual Studio can use Azure to train and deliver AI-powered assistance into the IDE.

Montgomery added that Visual Studio 2019 previews, whenever they roll out, will be able to run on the same machines as Visual Studio 2017.

As far as a release date, however, Microsoft has offered no timeframe so far, indicating only that it will "say more in the coming months." [BACK TO 2018 PRODUCT LIST]


BizTalk Server "vNext"
Anticipated release: By the first half of 2019

Microsoft began sharing the earliest details of its next-gen BizTalk Server product in early August, including an estimated release timeframe of "within roughly 9 months of the general availability of Windows Server 2019." That Windows Server product is slated for release sometime in the second half of 2018, which ostensibly pushes the BizTalk Server "vNext" release into early 2019.

According to Microsoft's August announcement, the next BizTalk Server product will contain previously released feature packs, and will support "the latest versions of Windows Server, SQL Server and Visual Studio." It will also be possible to upgrade to the new BizTalk Server product from BizTalk Server 2013 R2 and BizTalk Server 2016. [BACK TO 2018 PRODUCT LIST]


SharePoint Server 2019
Released

UPDATES

Oct. 22: SharePoint Server 2019 becomes generally available.

Sept. 24: Microsoft says SharePoint Server 2019 will become generally available in October.

July 24: Microsoft releases the SharePoint Server 2019 preview.

May 21: The public preview of SharePoint Server 2019 will be released in June, according to Microsoft. • Microsoft launches a preview of SharePoint Spaces.

Microsoft also said at Ignite last year that it plans to release the next major version of the on-premises SharePoint Server in the later part of 2018, in tandem with Office 2019. The company hasn't been too descriptive about what changes and improvements are coming to SharePoint Server 2019, but it did share the following "big bets" in a blog post in October:

  • "Next-Gen Sync Client support
  • "Modern UX throughout the product
  • "Flow/PowerApps integration
  • "Other SharePoint Online innovations"

Another anticipated -- but as-yet unconfirmed -- component of SharePoint Server 2019 could be the potential for continued support for InfoPath, Microsoft's now-deprecated electronic forms software, even though Microsoft is grooming PowerApps and Microsoft Flow to be InfoPath's successor.

Most of Microsoft's improvements come first to the SharePoint Online product, with some (but not all) filtering down to the server product via Feature Pack releases. Microsoft's SharePoint Online roadmap, unveiled in May, promised things like a new SharePoint Admin Center, OneDrive Files on Demand and improved search, but exactly which features SharePoint Server 2019 will get is unclear. Microsoft also launched the SharePoint Framework in 2017 to support client-side customizations using open source tools for SharePoint Online, but also promised to deliver SharePoint Framework support for the server product, too. [BACK TO 2018 PRODUCT LIST]


Exchange Server 2019
Released

UPDATES

Dec. 10: Microsoft releases its Exchange 2019 preferred architecture.

Oct. 22: Exchange Server 2019 is now generally available.

July 24: The public preview of Exchange Server 2019 is released.

Microsoft has been more reticent in describing details about the upcoming Exchange Server release compared to the other 2019-branded server releases that are on tap this year. The company has confirmed that the timing of the Exchange Server 2019 preview and release milestones will mirror those of SharePoint Server 2019, Office 2019 and Skype for Business Server 2019, but beyond those details, Microsoft has been mostly mum. Microsoft did indicate in a Tweet at September's Ignite event that the next version release of Exchange will focus on security, compliance, usability and manageability. [BACK TO 2018 PRODUCT LIST]


Dynamics 365
Anticipated release: Fall update coming October 2018

UPDATES

Nov. 2: Microsoft releases Dynamics 365 AI for Sales.

Oct. 1: Dynamics 365 Remote Assist and Dynamics 365 Layout become generally available.

Sept. 18: Microsoft describes five new AI/mixed reality modules coming to Dynamics 365.

July 22: Microsoft releases details of Dynamics 365's October 2018 update.

July 6: Microsoft announces its plan to move Dynamics 365 to a semiannual update model (April and October) starting this year.

April 10: Dynamics 365 for Marketing becomes generally available.

April 2: Microsoft announces the general availability of Dynamics 365 Business Central (cloud), with an on-premises/hosted version arriving in the fall.

March 21: Microsoft describes Dynamics 365's spring update, including the planned release of Dynamics 365 for Marketing and the introduction of Dynamics 365 for Sales Professional.

March 20: Microsoft announces planned feature deprecations in Dynamics 365 portals.

March 13: Microsoft Dynamics 365 Business Central will be released on April 2, according to Microsoft.

March 12: Microsoft has started sharing details of its upcoming NAV-based offering, called "Microsoft Dynamics 365 Business Central," to select partners, according to an MSDynamicsWorld report.

Feb. 15: Microsoft launches a preview of the Dynamics 365 support center.

Feb. 6: Microsoft releases the Dynamics 365 for Marketing app to public preview, with general availability slated for spring.

The last 12 months have proved to be a mixed bag for Dynamics 365, Microsoft's repackaged CRM and ERP cloud suite that first debuted in late 2016. Last spring, the company began integrating Dynamics 365 with LinkedIn, giving sales teams new ways to tap the vast well of information from the professional social network's 500 million registered users. Microsoft also launched the first of the "Dynamics 365 AI Solutions" at Ignite. Dynamics 365 AI Solutions is an initiative that links Dynamics 365 with Microsoft's various AI, machine learning and enterprise search offerings to solve what Steve Guggenheimer, head of Microsoft's Developer Platform & Evangelism unit, called "high-value, complex enterprise scenarios." New Dynamics 365 application components also debuted throughout 2017, including Dynamics 365 for Retail and Dynamics 365 for Talent.

There have been some off notes, too. For instance, the long-promised integration between Dynamics 365 and Cortana, Microsoft's digital assistant, still hasn't come to fruition -- at least, not in the way that Microsoft had initially planned. In early January 2018, Microsoft announced in a short blog post that it would be "discontinuing the current Cortana integration preview feature that was made available for Dynamics 365," and instead "focusing on building a new long term intelligent solution experience, which will include Cortana digital assistant integration."

Microsoft also caused some consternation among partners last fall when it proposed a white-labeling model for Dynamics 365 under the code name "Tenerife." Microsoft course-corrected a bit after that announcement was met with a general outcry. Instead, the company is now promising a more streamlined Dynamics 365 model that's slated to take effect in the spring of 2018. The company broadly sketched out its plans in a September blog post:

Microsoft will offer a single collection of Dynamics 365 applications for customers of all sizes and complexity to digitally transform their organizations across all lines of business -- Marketing, Sales, Service, Finance, Operations, and Talent -- at their own pace. Instead of offering separate editions (e.g. "Business edition" and "Enterprise edition"), we will focus on enabling any organization to choose from different price points for each line of business application, based on the level of capabilities and capacity they need to meet their specific needs.

As part of the revamp, Microsoft also plans to release two new NAV-optimized Dynamics 365 offerings for partners in the first half of 2018. One of these offerings will be a Dynamics 365 cloud app sold through Cloud Solution Provider (CSP) partners, while the other will be an application development platform for ISVs that qualify for Microsoft's ISV Cloud Embed program. [BACK TO 2018 PRODUCT LIST]


Windows Server and "Project Honolulu"
Windows Server 2019: Released
Project Honolulu: Released

UPDATES

Dec. 18: Windows Server vNext test build 18298 is released to Insiders.

Nov. 20: The first test build of Windows Server vNext (semiannual channel), expected to roll out in the first half of 2019, is released.

Nov. 13: Microsoft re-issues Windows Server 2019 and Windows Server version 1809 after pausing their rollout after reports of problems related to Windows 10.

Oct. 2: Windows Server 2019 beceomes generally available.

Sept. 24: Windows Server 2019 will be released in October, Microsoft announced at Ignite.

Sept. 20: Microsoft releases Windows Admin Center version 1809.

Sept. 5: Windows Server 2019 Essentials for small businesses is expected to launch later this year, Microsoft says.

Aug. 28: Test build 17744 of Windows Server 2019 is released to Insiders.

Aug. 21: Microsoft releases test build 17738 of Windows Server 2019.

Aug. 16: The next major releases of Windows 10 and Windows Server will feature smaller monthly updates, according to Microsoft.

Aug. 14: Microsoft releases test build 17733 of Windows Server 2019 and the long-term servicing channel.

July 31: Preview build 17723 of Windows Server 2019 is released to Insiders.

July 17: Windows Server 2019 preview build 17713 is released to Insiders.

June 26: Microsoft details Windows Server 2019 support for hybrid and hyperconverged scenarios, and announces a 4PB Storage Spaces Direct boost.

June 20: Preview Build 17692 of Windows Server 2019 (both the long-term servicing channel and the semiannual channel versions) is released, along with Windows Admin Center preview build 1806.

May 29: Preview build 17677 of Windows Server 2019 is released to Insiders.

May 15: Preview build 17666 of Windows Server 2019 and the next semiannual channel version is released to testers.

May 3: The Windows Admin Center SDK is released to preview.

April 29: Microsoft says the next Windows Server semiannual channel release, version 1803, will be released on May 7.

April 24: Microsoft releases test build 17650 of Windows Server 2019 and the semiannual channel version.

April 19: Microsoft enables the use of Windows Admin Center with Windows Server 2016 to manage hyperconverged infrastructure.

April 12: Microsoft releases "Project Honolulu" under the official name of Windows Admin Center.

April 10: Windows Server preview build 17639 is released to testers.

March 29: The next Windows Server semiannual channel release (version 1803) will arrive in the first half of 2018, according to Microsoft.

March 20: Microsoft releases Windows Server 2019 in preview, with general availability expected in the second half of 2018. • Microsoft releases test build 17623 of both the semiannual channel and the long-term servicing channel.

March 13: Test build 1803 of the Project Honolulu technical preview is released to Insiders.

Feb. 13: Microsoft releases test build 17093 of the next Windows Server semiannual channel release, as well as test build 1802 of Project Honolulu.

Most of the excitement around Windows Server last year -- from a roadmap perspective, at least -- was generated from Microsoft's move to transition the product to the same biannual servicing model that Windows 10 and Office ProPlus now use. Under this so-called "semiannual channel" release cadence, Windows Server receives two major feature updates each year -- one in the spring and one in the fall. Users enrolled in the Windows Insider program can get early access to each semiannual channel release for testing purposes before it becomes generally available. The first Windows Server (and current) semiannual channel release was "version 1709," which hit general availability last October. The next semiannual channel release, dubbed "version 1803," is currently in the testing phase and should become available in March or April. Microsoft is offering this biannually updated product alongside its more traditional Windows Server 2016 product, where feature updates aren't as frequent.

An obvious advantage of jumping on the semiannual channel train with Windows Server is the opportunity to get new and major feature changes, but organizations have some restrictions. They can only use the Server Core installation option for production workloads with Windows Server version 1709, or they can use Nano Server, but just for hosting containers. Management of Windows Server version 1709 comes via a remote tool called "Project Honolulu," a browser-based solution that replaces the earlier Server Management Tools product. Now in technical preview, Project Honolulu is expected to become generally available "sometime in 2018," according to a Microsoft infograph from Ignite.

In contrast to this new semiannual channel model, Windows Server 2016 continues to follow the more traditional update model. Microsoft has taken to calling this the "long-term servicing channel," where major updates are available every two to three years (akin to the old "service pack" approach). Given that Windows Server 2016 was commercially released in the fall of 2016, there's a chance that the first early test builds of Windows Server "v.Next" could see daylight in late 2018. [BACK TO 2018 PRODUCT LIST]

Kurt Mackie contributed to this report.     


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Mar
11
What's new in nopCommerce 4.10 - .NET Core 2.1
Posted by Thang Le Toan on 11 March 2019 08:39 AM

https://www.nop-templates.com/whats-new-in-410-nopcommerce-moves-to-net-core-210

 

NopCommerce 4.10 is out the door and looking awesome with great new features among which is the support for .NET Core 2.1. The release note of this new version is no different from any previous ones, it is quite long including more than 100 items. Just looking at it could be overwhelming. But no worries. We have got you covered with this article in which we are going to digest this information and give you a detailed overview of the most important new features in nopCommerce 4.10.

NopCommerce moves to .NET Core 2.1

Let’s start with the flagship feature of nopCommerce 4.10, namely the support for .NET Core 2.1. The previous version 4.0 was built on top of ASP.NET Core but at the same time was targeting .NET 4.6.1. For more information on why this is please read our blog post on What’s new in nopCommerce 4.0. In NopCommerce 4.10 this has changed and the platform now runs on .NET Core 2.10 and Entity Framework Core, which supports lazy loading. The move to .NET Core means that nopCommerce is now leaner, more modular, more versatile when it comes to deployment options (you do not have to have IIS to run your store) more performant and developers can make use of new .NET Core features like partial Tag Helpers, SignalR, Span<T>, Memory<T>, improved support for Docker container, etc.

It is important to note that nopCommerce 4.10, although now targeting .NET Core 2.10, still lacks cross-platform support. This important development was postponed for version 4.10 as it requires a substantial effort and would have delayed this release significantly. The next feature is the reason why nopCommerce 4.10 had to be released as soon as possible.

GDPR Support

The General Data Protection Regulation has been in effect since the 25th of May. The regulation simply requires businesses to protect the personal data and privacy of EU citizens for transactions that occur within EU member states. In its essence, the GDPR shifts the ownership of customer data from the organizations that use it to the individual customer. Customer data refers to any information such as name, address, and ID numbers; web data such as location, IP address, cookie data; or any genetic, psychological, cultural, religious and/or socioeconomic data that can be used to identify an individual.

GDPR is certainly complicated. The law is 90 pages and to become compliant may seem like a daunting task. Well, it could be. But fear not. NopCommerce 4.10 abstracts the complexities for you (the store owner) and gives you the tools to meet the following three major GDPR requirements:

  • If you need to use the personal data of a customer for a specific purpose (for example send them promotional emails) you are required to have their consent. You need to make sure that you ask for their permission and have their consent.
  • The customer can request to see what personal data related to them you are keeping in your store. You need to provide them with the means to see this data every time they require it.
  • The customer should be able to delete their personal data from your store at any time. So you need to give them the tools to do so.

As you can see running a store and being GDPR compliant is not so difficult. It is also a great opportunity to gain the trust of EU customers. Fortunately, nopCommerce 4.10 provides GDPR support and you can meet these three major requirements.

Where to start? Let me point you to the right settings in the nopCommerce administration to get things going.

First, you need to enable the GDPR support for your store. Please keep in mind that it is only available for nopCommerce 4.10. Go to Settings -> GDPR Settings and mark the checkbox to get the GDPR support enabled. Once you do this, you can immediately log the “accept privacy policy” and the “newsletter subscription” default messages. Logging them means that you will be able to track the consent requests in the GDPR log which is located in Customers -> GDPR Request Log

GDPR Enable

You can create any type of consent messages depending on the nature of your business or the products and services you offer. For example, you have an online grocery store and you run a No Food Waste campaign. Each day you make a special selection of items which are about to expire soon. As part of the campaign, you wish to send a promo email to your customers of the daily promotions. You will need to get your customers' consent to send them promotional emails.

No Food Waste Consent

In the store administration, you can select which consents are required for your store. You can also map a consent to a specific store if you are running a multi-store installation of nopCommerce.

Map Consent to a Store

A record is kept for all consents a customer has granted or denied. The store owner can keep track of all consent activities in the GDPR request log.

GDPR Request Log

The customers can view all GDPR-related activities on their My Account page. They can also keep track of the consents they have given or denied. They can see what kind of personal information the store keeps. A customer can delete their account at any time along with all their personal information. Once a consent is granted, a customer may choose to revoke their consent at any time. If this happens, a store owner needs to act accordingly and make sure that they don’t violate the customer’s consent.

GDPR Customer Page

The support for .NET Core 2.1 and GDPR are without a doubt the highlights in the 4.10 release. The shortlist of the features to follow are not to be overlooked either. They will also give a good reason to store owners to upgrade to nopCommerce 4.10.

A preview is available for news, topics, and blogs

As store owners, managing Nop-Templates.com, we find the next feature extremely valuable. In nopCommerce 4.10, there is a preview in the administration for the news, topics and blog posts. In previous versions, we had to publish an article to view it. This was inconvenient especially with articles which required extensive formatting. Making changes to a blog post, for example, when it is live is not a good practice. Fortunately, in nopCommerce 4.10 this problem is solved and store owners can edit and polish their content as much as they need before publishing it.

Blog Preview

Polls per store option available

In previous nopCommerce versions, if you are running a multi-store and needed to have a poll on only one of your stores, the poll would appear on every store in your installation. Needless to say, this could be a showstopper in most cases because a poll relevant to one store is rarely applicable to other stores. Now in nopCommerce 4.10 polls can be created per store solving this problem.

Polls per store

Product review notification for customers

In nopCommerce 4.10 a customer gets a notification when they receive a reply to a product review. The option to send a notification can be useful when a store owner wants to be sure that a customer reads their reply. For example, let's say that a customer has left a bad review. As a store owner, it would be important to me to reply to them and ask follow-up questions. Their feedback can help me improve the product or the service. This will not be possible if there is no way for the customer to know that I have replied to their review.

Order details page (administration) - "Billing info" and "Shipping info" is displayed in a single tab

A simple change can make a big difference when it saves time. Now, a store owner can view the order billing and shipping information in a single tab. This makes it easy for the store owner to compare the billing and shipping addresses for each order. No switching of tabs is required anymore.

Shipping and Billing Information

Product attribute price adjustment in percentage terms

Before nopCommerce 4.10, product prices could be adjusted based on specific attributes with a fixed amount only. In the new version, these price adjustments can be done in percentage points. This gives much more flexibility when running a sale for example. A store owner does not have to edit their price adjustments every time the price of a product changes.

Attributes

“Required products” are automatically removed when the “main product” is removed from the shopping cart

You are probably aware that in nopCommerce, a product can have required products. These are products that are required to be purchased along with the main product and are automatically added to the shopping cart when the main product is added to the cart. In previous nopCommerce versions, buyers had to manually remove the required products from the shopping cart when the main product was removed. Not anymore. In nopCommerce 4.10 this is done automatically. A logical change which buyers and store owners will appreciate alike.

Required Products

Reward points enhancement - minimum order total setting added

In nopCommerce 4.10, the store owner can specify the minimum order total required for a customer to receive reward points. For example, I would like to give 1 reward point for every 10 dollars spent but only if the order placed is for at least $100. I can set this in Settings -> Reward point ->Minimum order total. Anyone who has placed an order for less than that amount will not receive the reward points.

Minimum Order Total

Delete products from the shopping cart or wish list in the admin area

Now, a store owner can delete products from the customer’s shopping cart or wish list in the administration. In previous versions, they had to be in “impersonated mode” to perform this action which was much more time-consuming.

Delete shopping cart and wish list in admin

Disable checkout

In nopCommerce 4.10 store owners can disable the checkout in the administration of their store. This comes in handy when a store owner wishes to have a product catalog website, where shoppers can browse products but cannot purchase them. To enable this option go to Settings -> Order Settings -> Checkout disabled.

Disable Checkout

Import product pictures from a remote server

A store owner needs to enable the "allow download images" setting to make use of this feature. This setting can be found in Catalog Settings -> Import/Export and will allow importing product images from a remote server when importing products from XML/XLS. The store owner can now include an URL from an external source in the picture fields of the XML/XLS file. In previous nopCommerce versions, a store owner could import product images only from a local machine.

Gift card balance displayed on the checkout page

If a customer applies a gift card to their order, the gift card balance will appear in the order summary. He will know exactly how much money is left in the gift card for future purchases. This was not possible in previous versions of nopCommerce. In fact, there was no way for the customer to know their gift card balance.

Gift Card Balance on Shopping Card

Discount coupon codes can be added to links to the store

We are crazy about this new feature and we are sure that other store owners will fall in love with it as well. In nopCommerce 4.10, the store owner can provide external links with a discount coupon code so that a shopper doesn’t have to apply the coupon code at the checkout. Why is this useful? I will illustrate the importance of this feature with a practical example.

Let’s say you have a 50% sale on all products and you run a Google ad to advertise this offer. For this purpose, you create a 50% discount in the store’s administration of type “assign to order total”. You will see that a link is automatically generated.

Discount URL

You point your Google ad to this link. Next, a shopper clicks on your ad, lands on your store and adds a product to their shopping cart. The 50% discount will be applied automatically and the price of the product will be discounted.

Discount URL - price discounted

If your discount is assigned to a specific product or category the discounted prices will be immediately visible when your shoppers go to the product or category page, provided that they have the coupon code in the query string. Here’s an example.

Let’s say you want to have a sale on a specific product. What you have to do is assign your discount to the specific product and add the coupon code as a query parameter to the product link. Please click on the following link to see a real example:

http://demos.nop-templates.com/hp-envy-6-1180ca-156-inch-sleekbook?discountcoupon=456

As you can see the price of the HP Laptop is automatically discounted.

Discount code in external links

Google Analytics plugin now uses the new global site tag from Google

In nopCommerce 4.10 the Google Analytics plugin now uses the new global site tag (gtag.js) from Google. Why should you care? The global site tag is developed by the same team that created the Google Tag Manager at Google and replaces the analytics.js tag for Google Analytics and the conversion tracking tag for Google Ads. This means that the new gtag.js is designed to streamline tagging on your website for all Google Products. The global site tag sets new cookies for your website, which measure which clicks from your Google Ads bring traffic to your website. In this way, Google Ads can measure conversions much more accurately. You can also configure which interactions with your store should be considered Google Ads conversion. Most importantly by having the new global site tag on your website, you will be able to access new features as they are released on the new Google Marketing Platform.

CSS/style link tags in richTexbox Editor

If you are keen on having stunning looking-landing pages, like we are, then you will definitely appreciate this new feature. In nopCommerce 4.10 you can link CSS style sheets in the richTextbox editor. In this way, you can style every landing page or content generated with the richTextbox editor individually.

Let's next look at a few very useful new dvelopments that are more specific to nopCommerce plugin and theme developers.

Versioning of CSS and JS files

This is an important little addition, especially to theme developers. Before nopCommerce 4.10 if we were to modify the theme of a nopCommerce store by changing the CSS or JS files, the changes would not have been reflected in the browser of a customer who has visited the store before, unless they clear the browser cache. Let’s say we change the background color of the homepage of a store by modifying the main CSS file of the theme. All customers who visit the store for the first time will see the new background color. But customers who have previously visited the store will see the old background color because the browser is serving them the CSS file from its local cache.

NopCommerce 4.10 appends a version number to CSS and JS file links and bundles. Every modification changes the version in the links which means that every time a CSS or JS file is changed the browser sees a new file and loads it from the store server instead of loading it from its browser cache.

Move business logic from extension methods to services.

Extension methods could be useful for framework developer to expose functionality in a fluent syntax. But when you have classes that you can control which is the case with nopCommerce service classes, then extension methods could be harming the design of your code. Static classes that contain extension methods like anything static in OOP cannot benefit from polymorphism because they cannot implement interfaces or be inherited. Naturally, they are more difficult to test too.

Therefore, we welcome the fact that in version 4.10 the nopCommerce team has decided to move the code from various extensions methods like GetSeName, GetProductPicture, etc. to service classes.

In this way, the code in these methods can be overridden and also swapped through the DI Container.

Some developers might miss the fluentness of the extension methods syntax. Yet, being nopCommerce developers ourselves, we view this change as trading a highly sweetened fructose-syrup beverage with a freshly-squeezed orange juice.

Dropped support for SQL Server Compact

I am sure not many nopCommerce developers will miss SQL Server Compact especially that it has been in deprecation mode with no new releases planned for years now. So no surprises here, the nopCommerce team has decided to abandon this SQL Server edition.

Reindexing of database tables

In nopCommerce 4.10 if you open the administration and go to System -> Maintenance you will see a new panel named “Re-index database tables” with a “Re-index” button. Why would you want to press this button? Over time and especially with a busy nopCommerce website the indexes in the database can become fragmented. This can lead to a database that performs more slowly. In such situations, the new database reindexing feature can come in handy.

Reindexing of database tables

This concludes our description of the new nopCommerce 4.10 version. Now that you have a deeper understanding of why moving to .NET Core is important and what you might expect in terms of new features you can make an educated choice of whether to upgrade to the new version or not. If you need help with a nopCommerce upgrade or any type of nopCommerce development,


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Mar
11
Publishing and Running ASP.NET Core Applications with IIS
Posted by Thang Le Toan on 11 March 2019 05:33 AM

Theo: https://weblog.west-wind.com/posts/2016/Jun/06/Publishing-and-Running-ASPNET-Core-Applications-with-IIS 

When you build ASP.NET Core applications and plan on running them on IIS, you'll find that .NET Core applications in IIS work radically different than previous versions of ASP.NET.

In this post I'll explain how ASP.NET Core runs in the context of IIS and how you can deploy your ASP.NET Core application to IIS.

IIS and ASP.NET Core

The most important thing to understand about hosting ASP.NET Core is that it runs as a standalone, out of process Console application. It's not hosted inside of IIS and it doesn't need IIS to run. ASP.NET Core applications have their own self-hosted Web server and process requests internally using this self-hosted server instance.

You can however run IIS as a front end proxy for ASP.NET Core applications, because Kestrel is a raw Web server that doesn't support all features a full server like IIS supports. This is actually a recommended practice on Windows in order to provide port 80/443 forwarding which kestrel doesn't support directly. For Windows IIS (or another reverse proxy) will continue to be an important part of the server even with ASP.NET Core applications.

Let's take a look and see how IIS fits into ASP.NET Core applications.

Classic ASP.NET Hosting

Before we take a look at ASP.NET Core hosting lets review how classic ASP.NET runs ASP.NET applications:

Hosting ASP.NET on IIS

In a classic ASP.NET application everything is hosted inside of an IIS Worker Process (w3wp.exe) which is the IIS Application Pool. The AppPool hosts your ASP.NET application and your application is instantiated by the built-in ASP.NET hosting features in IIS. The native runtime manager instantiates the .NET Runtime on your application's behalf and brings up the HttpRuntime object which is then used to fire requests through the ASP.NET application pipeline as requests come in from the native http.sys driver. Requests come in from http.sys and are dispatched to the appropriate site that is mapped to the Application Pool and the HttpRuntime instance hosted there.

ASP.NET Core with IIS

Things are quite different with ASP.NET Core which doesn't run in-process to the IIS worker process, but rather runs as a separate, out of process Console application that runs its own Web server using the Kestrel component. Kestrel is a .NET Web Server implementation that has been heavily optimized for throughput performance. It's fast and functional in getting network requests into your application, but it's ‘just’ a raw Web server. It does not include Web management services as a full featured server like IIS does.

If you run on Windows you will likely want to run Kestrel behind IIS to gain infrastructure features like port 80/443 forwarding via Host Headers, process lifetime management and certificate management to name a few.

Here's what it looks like when you run your ASP.NET Core application behind an IIS Web front:

ASP.NET Core IIS Hosting

ASP.NET Core applications are standalone Console applications invoked through the dotnet runtime command. They are not loaded into an IIS worker process, but rather loaded through a native IIS module called AspNetCoreModule that executes the external Console application.

The AspNetCoreModule has to be installed on your server and is part of the ASP.NET Core Server Hosting Bundle.

Once you've installed the hosting bundle (or you install the .NET Core SDK on your Dev machine) the AspNetCoreModule is available in the IIS native module list:

The ASPNetCoreModule interfaces ASP.NET Core Console Applications

The AspNetCoreModule is a native IIS module that hooks into the IIS pipeline very early in the request cycle and immediately redirects all traffic to the backend ASP.NET Core application. All requests - even those mapped to top level Handlers like ASPX bypass the IIS pipeline and are forwarded to the ASP.NET Core process. This means you can't easily mix ASP.NET Core and other frameworks in the same Site/Virtual directory, which feels a bit like a step back given that you could easily mix frameworks before in IIS.

While the IIS Site/Virtual still needs an IIS Application Pool to run in, the Application Pool should be set to use No Managed Code. Since the App Pool acts merely as a proxy to forward requests, there's no need to have it instantiate a .NET runtime.

The AspNetCoreModule's job is to ensure that your application gets loaded when the first request comes in and that the process stays loaded if for some reason the application crashes. You essentially get the same behavior as classic ASP.NET applications that are managed by WAS (Windows Activation Service).

Once running, incoming Http requests are handled by this module and then routed to your ASP.NET Core application.

So, requests come in from the Web and int the kernel mode http.sys driver which routes into IIS on the primary port (80) or SSL port (443). The request is then forwarded to your ASP.NET Core application on the HTTP port configured for your application which is not port 80/443. In essence, IIS acts a reverse proxy simply forwarding requests to your ASP.NET Core Web running the Kestrel Web server on a different port.

Kestrel picks up the request and pushes it into the ASP.NET Core middleware pipeline which then handles your request and passes it on to your application logic. The resulting HTTP output is then passed back to IIS which then pushes it back out over the Internet to the HTTP client that initiated the request - a browser, mobile client or application.

The AspNetCoreModule is configured via the web.config file found in the application's root, which points a the startup command (dotnet) and argument (your application's main dll) which are used to launch the .NET Core application. The configuration in the web.config file points the module at your application's root folder and the startup DLL that needs to be launched.

Here's what the web.config looks like:

<?xml version="1.0" encoding="utf-8"?>
<configuration>
  <!--
    Configure your application settings in appsettings.json. Learn more at http://go.microsoft.com/fwlink/?LinkId=786380
  -->
  <system.webServer>
    <handlers>
      <add name="aspNetCore" path="*" verb="*"
        modules="AspNetCoreModule" resourceType="Unspecified" />
    </handlers>
    <aspNetCore processPath="dotnet"
                arguments=".\AlbumViewerNetCore.dll" 
                stdoutLogEnabled="false" 
                stdoutLogFile=".\logs\stdout" 
                forwardWindowsAuthToken="false" />
  </system.webServer>
</configuration>

You can see that module references dotnetexe and the compiled entry point DLL that holds your Main method in your .NET Core application.

Do you need IIS?

We've already discussed that when running ASP.NET Core on Windows, it's recommended you use IIS as a front end proxy. While it's possible to directly access Kestrel via an IP Address and available port, there are number of reasons why you don't want to expose your application directly this way in production environments.

First and foremost, if you want to have multiple applications running on a single server that all share port 80 and port 443 you can't run Kestrel directly. Kestrel doesn't support host header routing which is required to allow multiple port 80 bindings on a single IP address. Without IIS (or http.sys actually) you currently can't do this using Kestrel alone (and I think this is not planned either).

The AspNetCoreModule running through IIS also provides the necessary process management to ensure that your application gets loaded on the first access, ensures that it stays up and running and is restarted if it crashes. The AspNetCoreModule provides the required process management to ensure that your AspNetCore application is always available even after a crash.

It's also a good idea to run secure SSL requests through IIS proper by setting up certificates through the IIS certificate store and letting IIS handle the SSL authentication. The backplane HTTP request from IIS can then simply fire a non-secure HTTP request to your application. This means only a the front end IIS server needs a certificate even if you have multiple servers on the backplane serving the actual HTTP content.

IIS can also provide static file serving, gzip compression of static content, static file caching, Url Rewriting and a host of other features that IIS provides natively. IIS is really good and efficient at processing non-application requests, so it's worthwhile to take advantage of that. You can let IIS handle the tasks that it's really good at, and leave the dynamic tasks to pass through to your ASP.NET Core application.

The bottom line for all of this is if you are hosting on Windows you'll want to use IIS and the AspNetCoreModule.

Running IIS as a Development Server - no

So I've seen this question comes up occasionally:

Can I run full IIS to run and debug my ASP.NET Core Applications like I could with classic applications?

To sidestep this question a little: There should be very few reasons for you to run IIS during development. Yes, in the past there were very good reasons to run full IIS because there were always a number of things that behaved very differently in full IIS compared to IIS Express.

However, with ASP.NET Core there's little to no reason to be running full IIS during development. Why? Because ASP.NET Core applications aren't actually running inside of IIS. Whether you running called from IIS, IIS Express or whether you do dotnet run directly from the command line - you are running the exact same code and in most cases the exact same execution environment. Running inside of IIS really doesn't buy you anything anymore that you can't easily simulate with a command line environment.

The only reason you might need to run under IIS if there is something that IIS provides in terms of HTTP services that is really separate from the ASP.NET Core processing. But even then it's likely that those features won't be something you need to debug in the context of your application.

‘Running’ IIS

The reason that you can't ‘just run IIS’ from your development environment is that an ASP.NET Core application has to be published before it can be executed. The development folder doesn't hold all the files necessary to run your application. When you 'debug' or ‘run’ your application the application is first published to a separate location and run from there. For this reason you don't see IIS as an option in Visual Studio for example.

If you absolutely have to run with IIS, you can publish the application to a local folder first, then configure an IIS virtual directory or site and use that to run your site.

Publishing ASP.NET Core Applications for IIS

In order to run an application with IIS you have to first publish it. There are two ways to that you can do this today:

  • Use dotnet publish
  • Use the Visual Studio Publishing Features

Using dotnet publish

Using dotnet publish builds your application and copies a runnable, self-contained version of the project to a new location on disk. You specify an output folder where all the files are published. This is not so different from classic ASP.NET which ran Web sites out of temp folders. With ASP.NET Core you explicitly publish an application into a location of your choice - the files are no longer hidden away and magically copied around.

A typical publish command may look like this:

dotnet publish
      --framework netcoreapp1.0 
      --output "c:\temp\AlbumViewerWeb" 
      --configuration Release

This publishes the application to the c:\temp\albumviewerWeb.

If you open this folder you'll find that it contains your original application structure plus all the nuget dependency assemblies dumped into the root folder:

Manual IIS Hosting of a Publish Folder

Once you've published your application and you've moved it to your server (via FTP or other mechanism) we can then hook up IIS to the folder.

I'm going to create a virtual Application directory:

Note that I created an AspNetCore Application Pool that has its .NET Runtime set to No Managed Code as shown earlier.

IIS Identity and Permissions

You might also have to tweak the IIS App Pool Identity to something other than the default ApplicationPoolIdentity in order to ensure that your application has access to resources it needs to run. I generally start with NETWORKSERVICE and then move to a custom account that matches the actual rights required by the application.

And that's really all that needs to happen. You should be able to now navigate to your site or Virtual and the application just runs.

You can now take this locally deployed Web site, copy it to a Web Server (via FTP or direct file copy or other publishing solution), set up a Site or Virtual and you are off to the races.

Publishing from Visual Studio

The dotnet publish step works to copy the entire project to a folder, but it doesn't actually publish your project to a Web site (currently - this is likely coming at a later point).

In order to get incremental publishing to work, which is really quite crucial for ASP.NET Core applications because there are so many dependencies, you need to use MsDeploy which is available as part of Visual Studio's Web Publishing features.

Currently the Visual Studio Tooling UI is very incomplete, but the underlying functionality is supported. I'll point out a few tweaks that you can use to get this to work today.

When you go into Visual Studio in the RC2 Web tooling and the Publish dialog, you'll find that you can't create a publish profile that points at IIS. There are options for file and Azure publishing but there's no way through the UI to create a new Web site publish.

However, you can cheat by creating your own .pubxml file and putting it into the \Properties\PublishProfiles folder in your project.

Version Specific Workaround

Note it's almost certain this will get fixed post RC2 with a tooling update, so before you go through these steps if you read this article a month from now, check whether you can create an IIS publish profile directly through the Visual Studio UI.

To create a ‘manual profile’ in your ASP.NET Core Web project:

  • Create a folder \Properties\PublishProfiles
  • Create a file <MyProfile>.pubxml

You can copy an existing .pubxml from a non-ASP.NET Core project or create one. Here's an example of a profile that works with IIS:

<Project ToolsVersion="4.0" xmlns="http://schemas.microsoft.com/developer/msbuild/2003">
  <PropertyGroup>
    <WebPublishMethod>MSDeploy</WebPublishMethod>
    <LastUsedBuildConfiguration>Release</LastUsedBuildConfiguration>
    <LastUsedPlatform>Any CPU</LastUsedPlatform>
    <SiteUrlToLaunchAfterPublish>http://samples.west-wind.com/AlbumViewerCore/index.html</SiteUrlToLaunchAfterPublish>
    <LaunchSiteAfterPublish>True</LaunchSiteAfterPublish>
    <ExcludeApp_Data>False</ExcludeApp_Data>
    <PublishFramework>netcoreapp1.0</PublishFramework>
    <UsePowerShell>True</UsePowerShell>
    <EnableMSDeployAppOffline>True</EnableMSDeployAppOffline>
    <MSDeployServiceURL>https://publish.west-wind.com</MSDeployServiceURL>
    <DeployIisAppPath>samples site/albumviewercore</DeployIisAppPath>
    <RemoteSitePhysicalPath />
    <SkipExtraFilesOnServer>True</SkipExtraFilesOnServer>
    <MSDeployPublishMethod>RemoteAgent</MSDeployPublishMethod>
    <EnableMSDeployBackup>False</EnableMSDeployBackup>
    <UserName>username</UserName>
    <_SavePWD>True</_SavePWD>
    <ADUsesOwinOrOpenIdConnect>False</ADUsesOwinOrOpenIdConnect>
    <AuthType>NTLM</AuthType>
  </PropertyGroup>
</Project>

AuthType NTLM Fix

Note the <AuthType>NTLM</AuthType> key at the bottom of the file. This key is very important or else the publish operation doesn't work. If you're copying from an existing file make sure you add this key as it's unlikely to have it by default.

Once you've created a .pubxml file you can now open the publish dialog in Visual Studio with this Profile selected:

At this point you should be able to publish your site to IIS on a remote server and use incremental updates with your content.

And it's a Wrap

Currently IIS hosting and publishing is not particularly well documented and there are some rough edges around the publishing process. Microsoft knows of these issues and this will get fixed by RTM of ASP.NET Core.

In the meantime I hope this post has provided the information you need to understand how IIS hosting works and a few tweaks that let you use the publishing tools available to get your IIS applications running on your Windows Server.


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