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How PayPal Got Its Swagger Back

PayPal CTO explains how the move to OpenStack and a more agile development process put the mojo back in PayPal's product line.

It was an epiphany in a coffee shop that told James Barrese PayPal was no longer a long-in-the-tooth electronic payments service. Barrese, who's been CTO of PayPal for a little more than a year, entered a Starbucks on PayPal's San Jose, Calif., campus, a simple act that made him realize how PayPal's restructured IT and new OpenStack infrastructure were going to pay off.

Here's what happened: On a conference call as he came through the door, Barrese was holding his Android smartphone, papers, and a laptop as he placed his order. As his coffee came to the counter, he felt his phone vibrate.

The phone had already signaled his presence to a low-power Bluetooth beacon in the shop. Since Barrese had previously signed up to pay through the PayPal app on his phone, when the charge was transmitted through the beacon his phone responded, authorizing payment and vibrating to signal that the transaction was complete and he was free to go. As Barrese continued his teleconference, his photo appeared on a screen at the cash register so the barista could confirm visually that the owner of the account was present. Meanwhile, an SMS message was sent to Barrese, recording the transaction.

That sequence reflects two of several products that PayPal that has recently brought to market. They're not yet used in many retail locations; the beacon device was just released to developers in October. But Barrese realized how easily they might soon be more widely implemented. He had never been continuously engaged in a call while making a purchase before -- the Bluetooth signal worked alongside the live call -- and it was the kind of hands-free, frictionless experience that he believes many consumers would appreciate.

"The consumer is in control," Barrese noted in a recent interview. "This really makes the consumer experience more seamless."

[ Want to learn more about how PayPal is using OpenStack? See PayPal OpenStack Won't Replace VMware In Data Center. ]

PayPal is transforming its IT infrastructure from a traditional waterfall development process into an agile one, with greater concern for DevOps being part of how new software is created and put into production. In the PayPal IT space itself, Barrese explained, the walls have come down and development teams sit mixed in with business product engineering and quality assurance teams.

The resulting atmosphere is a reminder of the company's younger days, when PayPal innovations came fast and furious. This year the innovations are again happening rapidly, with a new PayPal mobile app gaining traction on the iPhone and Android phones; the low-power Bluetooth Beacon established in select retailers; and the Chip and Pin card reader launched in the UK so digital transactions can replace hard currency. "We've launched more new products this year than in the last five years," Barrese stated.

In his third-quarter earnings call, eBay president John Donahoe said the PayPal unit was busy "re-inventing the shopping experience." Other PayPal staffers, including senior director of platform engineering and operations Saran Mandair and VP of platform engineering and operations Nat Rajesh Natarajan, described the change more simply, saying that PayPal is going back to its roots as a fast-moving, inventive company. Both credited Barrese for changing IT's atmosphere into a looser, more innovative climate.

The effort has attracted attention outside its halls and allowed PayPal to recruit some top talent, including Arnold Goldberg, the former VP of engineering at Box, who now serves as VP of customer engineering, and Bill Scott, former director of e-commerce user interface engineering at Netflix, now director of UI engineering at PayPal. As PayPal become less of a Java and more of a Node.js shop, it also attracted Doug Crockford, an originator of the JavaScript language at Yahoo, now senior JavaScript architect at PayPal. (Node.js is a version of browser JavaScript that runs on servers.)

"Around the valley, it's sort of like PayPal's got its swagger back," Barrese remarked.

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User Rank: Apprentice
11/16/2013 | 1:17:21 PM
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Google in the Enterprise Survey
Google in the Enterprise Survey
There's no doubt Google has made headway into businesses: Just 28 percent discourage or ban use of its productivity ­products, and 69 percent cite Google Apps' good or excellent ­mobility. But progress could still stall: 59 percent of nonusers ­distrust the security of Google's cloud. Its data privacy is an open question, and 37 percent worry about integration.
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