Monthly Archives: May 2012

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The Promise of the Personal Cloud

The term “personal cloud” is only about a year old and has a wildly disparate set of meanings.  For some, services such as Facebook, Dropbox, and SugarSynch are personal clouds.  For others the gold standard is iCloud, which stores data and media and manages your apps from all your devices – as long as they are all from Apple.  I find myself agreeing with Jon Udell who writes in Wired, “I see signs of the personal cloud in services like Dropbox, Evernote, and Flickr. You can use them for free, or you can pay for higher capacity and enhanced customer service. But the personal cloud also arises from a way of thinking about, and using, any of the services the web provides.”

Yes.  The personal cloud is a way of thinking and it is not necessarily a new way.  Phil Windley and co-authors Craig Burton, Scott David, Drummond Reed and Doc Searls make this case well in a recent white paper, From Personal Computers to the Personal Cloud.  As the title indicates, the authors contend that the best model for thinking about the personal cloud is in fact the personal computer.  Gartner analyst Steve Kleyhans seconds this when he writes, “Many call this era the post-PC era, but it isn’t really about being ‘after’ the PC, but rather about a new style of personal computing that frees individuals to use computing in fundamentally new ways to improve multiple aspects of their work and personal lives.”

Most of the folks working on this nascent space agree that personal clouds will emerge because customers will demand secure and trusted access to their apps, data, and media anytime, anywhere from any device.  Gartner, among others, believes that the market for personal clouds and everything they imply – connected services, devices and data — will be huge.  By 2015 Gartner predicts we will spend some US$2.8 trillion worldwide on connected devices, the services that run them and content transferred through them.  While we all agree that this is what the future looks like, how markets and technology will get there remains an open question.

Are Personal Clouds Inevitable? 

Nothing is inevitable, but the promise offered by personal clouds of putting us back in charge of our personal data, of seamlessly and securely managing our online lives in a way that meets our own idiosyncratic needs, offers a powerful pull.   Windley et at summarize the benefits succinctly.  Personal clouds will 1) change how we relate to everything in our lives; 2) rearrange how we buy and sell products; and 3) revolutionize how we communicate with each other.  Why?  With personal clouds, we set the rules.  Our identities can be fluid and flexible.  Our data can be broadcast widely, hoarded or selectively shared.  We will be able to have infinite channels, that work seamlessly, with people, companies, organizations, accounts, and more.  When we have seamless access to all of our information, and control over the tools and services to use and understand it, everything changes.

While the potential is vast, the challenges are equally hard.  Personal clouds that live up to the vision of trusted, secure, seamless services will require solving a host of hard problems.  Windley et al have begun envisioning the next steps.  Core to their vision is the development of a Cloud Operating System.  Analogous to the OS that makes your PC run, the CloudOS will track your identity, attributes and preferences; run as many apps as you like; store and manage data distributed across the web; and host services for you to use.  Here is a picture that Joaquin Miller put together after a session at the most recent IIW conference. The OS lives inside your cloud.

A Gathering of Clouds

While it is tempting to think of the personal cloud as one thing, living in one place like a personal computer, it is much more likely to be a window into a collection of stuff spread across the net.  This makes sense because this is how the Net is structured.  Virtual stuff doesn’t have to live anywhere – as long as there is a way for me to find it, I can get value from it.  This feature is central to the radical potential of the Net, whose soul is vastly distributed and peer to peer.

We are now living in an era where increasing amounts of our data and services are living in virtual silos maintained and controlled by centralized companies.  The personal cloud slices these silos open, letting the data flow around in new ways.  This is highly disruptive and why Andrew Johnson of Gartner says, “Providers of consumer devices, services and content must anticipate the risk of sweeping changes to their business models.  The personal cloud will force technology providers not only to rethink how they approach markets, but also, more importantly, how they define markets. ‘Emerging’ and ‘mature’ markets are no longer useful market segmentation.”

One of the reasons that the personal cloud will be so disruptive is that it’s not one cloud.  There will be many clouds, capable of talking to each other, with many channels between them.  As long as everything is interoperable, there could be many operating systems, many identity and trust networks, many services, and more.  These “federated personal clouds” as Windley et al call them, mean that there will likely be many vendors in the mix offering different apps and services that work together.  Federated clouds are much more likely to escape centralized control.  This could engender huge new levels of innovation while empowering each of us at the same time.

This dynamic reminds me of one of my most beloved philosophical maxims, drawn from process theology.  An omnipotent god who exerts absolute control over the universe creates a system that limits each individual’s creativity, resulting in a less creative whole.  The god that grants creative control to the creatures and then lets each of them do their thing, ends up with a much richer and more powerful universe.  The moral:  centralized control constrains creativity and innovation.  Something similar is afoot with the personal cloud.  When each of us gains creative control over our virtual lives, the whole virtual universe becomes more innovative, creative and powerful.

Aligning Incentives

Much of the current conversation is necessarily still in the programming weeds.  My hope is that in parallel with much-needed technical development, we will continue to think through real world use cases that test emerging solutions.  These use cases will not only offer leverage to those trying to build business models for the personal cloud, but they will help us ferret out the ethical issues that will inevitably arise.

I personally worry as much about the cloud doing too much for me as too little.  If it does too little, then it will not have real value.  If it does too much filtering, sorting and aggregating then I will potentially be replicating a new version of the filter bubble inside my own cloud.  That’s just migrating creepy practices from our current silos into the personal cloud.  We have to get the filters right.  The trick will be to always, always err on the side of giving users control over their settings, channels, permissions and preferences.  This is the beauty of putting the user in the center.  The vendors that give me choice and control are the ones I will pick.  The incentives between customer and vendor will align.

(This post was originally published at www.spruceadvisers.com.)

Which companies love customers?

Not love to have them, but love interacting with them, knowing them, talking with them, learning from them, involving them in the business, and letting them take the lead sometimes. (And not just by using a “loyalty card” or some other gimmick.)

In The Intention Economy, I give two examples, one offline and one on.

The first is Trader Joe’s, whose retired President, Doug Rauch, told me that his main job at the store was talking with customers. That is, literally, shopping along with them. Seeing what they liked, didn’t like, and why. Asking questions. Getting input. Trader Joe’s, he said, doesn’t just look for transactions, but for relationships. When I asked him if there was anything in the store that customers did not influence, he said no. When I told him we lived in Santa Barbara, he asked if we shopped at the store on Milpas Street or the newer one near Upper State. I was impressed. The dude was based in Massachusetts and still knew every store, and had shopped along with customers at every one he went to as well.

The online example is Zappo’s, which encourages its service people to maximize interaction with customers on phones. The company also welcomes exceptions. For example, I have wide feet: 9 1/2 EE. Shopping just for what fits me is easy. A few minutes ago I bought replacements for my several-year-old ASICS Gel-Cumulus 13 athletic shoes. The old ones look more worn than they really are, so I got some fresh ones. There was no reason to work with a human in this case, but I sensed a human sensibility to the ease with which I could find and get what I wanted. (The Kid and I like to sing, “Shop like a man, fast as you can,” to the tune of the Four Seasons‘ old “Walk Like a Man.”)

So who else is there? You tell us, in the comments below. No restrictions. The only qualifications are the ones I laid out in the first sentence. And tell us why, too.

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Privacy is personal

In the physical world, we govern privacy with clothes and walls, buttons, zippers, windows and doors. (See Clothing as a privacy system.)

We also see privacy as a thing that can be possessed. That’s the framing for statements like, “Give me some privacy, and “Don’t take away my privacy.”

On another hand (there can be many), we also see privacy as a state of being: “This is private.” “Keep this private.”

The American Heritage Dictionary defines privacy as “1. a) The quality or condition of being secluded from the presence or view of others; b) The state of being free from unsanctioned intrusion: a person’s right to privacy”; and  “2. The state of being concealed; secrecy.” The Collins English Dictionary (at that same link) adds one more: “3. (Philosophy) Philosophy the condition of being necessarily restricted to a single person.” The boldface is mine. I like that one. (And not just because I majored in philosophy, back in the decade.)

That’s the noun. To mine the derivational vein, we must also dig the adjective. Here’s American Heritage on private:

  1. a. Secluded from the sight, presence, or intrusion of others: a private hideaway; b. Designed or intended for one’s exclusive use: a private room.
  2. a. Of or confined to the individual; personal: a private joke; private opinions.private road b. Undertaken on an individual basis: private studies; private research. c. Of, relating to, or receiving special hospital services and privileges: a private patient.
  3. Not available for public use, control, or participation: a private club; a private party.
  4. a. Belonging to a particular person or persons, as opposed to the public or the government: private property. b. Of, relating to, or derived from nongovernment sources: private funding. c. Conducted and supported primarily by individuals or groups not affiliated with governmental agencies or corporations: a private college; a private sanatorium. d. Enrolled in or attending a private school: a private student.
  5. Not holding an official or public position: a private citizen.
  6. a. Not for public knowledge or disclosure; secret: private papers; a private communication. b. Not appropriate for use or display in public; intimate: private behavior; a private tragedy. c. Placing a high value on personal privacy: a private person.

Here’s what it says about deep sources for private (and also for privacy): “Middle English privat from Latin privatusnot in public life, past participle of privare, to release, deprive, from privussingle, alone… Indo-European roots.”

Thus, here in the everyday vernacular of the physical world, privacy is well understood, and has been since before we had History. But “here” now also constitutes the virtual world, where you are equally present, and reading this text right now. In the physical “here,” your privacy is provided by what you’re wearing and where you locate yourself. Your choices in the virtual “here” are not so plain and clear. Not yet, anyway. At best we can only hope that the stuff we try to keep private will stay that way. And it is best lately to hope less than you used to, because there is a large and growing business in abusing your privacy in the virtual world. That business is advertising. For that business, your privacy is a problem that can only be solved with a promise: Trust us. We not only respect your privacy, but are in business to help you. Buy stuff, that is.

Credit where due: the Internet Advertising Bureau (IAB) is deeply concerned about privacy, and requires that its members adhere to a raft of privacy principles. Here’s one: “Businesses collecting or using information about individual consumers for interactive advertising purposes should provide choice, where appropriate, to that individual. Consumers also should receive relevant education regarding cross-industry opportunities to opt out of the collection or use of individual information or other methods to exercise choice.”

However well-intended this might be, it’s a window fan blowing against the storm of wealth-creation that the “interactive” advertising business has become. On Friday, Facebook went public with a valuation exceeding $100 billion. Its business is advertising. So is Google’s, with a market cap hovering around $200 billion. The goal for both companies is to “personalize” advertising as much as possible. This requires making their machines learn all they can about you, whether you know it or not. And, for all their talk about providing choices, they’d rather you not shut out their tentacles or cover their prying eyes.

If you want to operate on the Web today, it is almost impossible to avoid either company, or the thousands of other that are in the business of knowing as much as possible about you, so that information can be sold to advertisers and their agencies. Wanting to maximize the sum and quality of information about individuals is at absolute odds with those companies’ stated commitments to privacy — as well as individuals’ own sense, based on experience in the physical world, of what privacy is and how it should work.

Did you know that, when you go to a site that has a Facebook “like” button, Facebook will know you were there, even if you don’t click on the button? Also, says Consumer Reports, “Even if you have restricted your information to be seen by friends only, a friend who is using a Facebook app could allow your data to be transferred to a third party without your knowledge.” And, adds Abine, “You know those Facebook Like and Connect buttons you see on almost every website?  They’re not just for sharing: they’re tracking devices.  Facebook buttons can track both members and non-members of Facebook, even if you never click them.  They transmit your clicks, browsing history, IP address, and more to Facebook.”

Is Facebook going to stop doing that kind of thing on their own, when they believe it’s also the very thing that makes them the most money?

Not surprisingly, Consumer Reports’ parent, Consumers Union, wants a policy solution. That is, new laws that restrict the ability of Facebook and others to, for example, track us without our permission. Meanwhile CU has also put up the HearUsNow site, as a way for individuals to demand better treatment by Facebook. The White House has also issued a Privacy Bill of Rights, which offers guidelines for lawmaking.

In his landmark book, Understanding Privacy, Raymond Solove details the many ways that privacy is nearly impossible to pin down in legal argument, much less in policy. So, while he notes in the first sentence of his first chapter, “Supreme Court Justice Louis Brandeis pronounced it ‘the most comprehensive of rights and the right most valued by civilized men,’” he later adds that “legal scholar Arthur Miller has declared that privacy is ‘difficult to define because it is exasperatingly vague and evanescent.’” Solove’s own case is that “the value of privacy must be determined on the basis of its importance to society, not in terms of individual rights.” He adds, “the value of privacy in a particular context depends on the social importance of the activities it facilitates.” The prescriptive chapters of the book are devoted to laying out a taxonomic framework for understanding privacy problems. Because, sensibly, “A lucid, comprehensive, and concrete understanding of privacy will aid the creation of law and policy to address privacy issues.”

Which is fine, if you think corporations and governments are the only actors in the marketplace with full agency. That is, with the ability to act, and to cause effects. As individuals on the Web, we don’t have that ability today. (Imagine having a website agree to your terms and conditions, rather than the reverse.) One symptom of that is the call for legislative protection, which we wouldn’t have if we had full agency. So, the thinking goes, “We can’t protect ourselves, so the government should step in.”

I’m against that, at least for now, because I don’t believe we’ve done enough to empower individuals on their own. I’d rather we work on equipping individuals to enjoy full agency, as independent and sovereign beings, in the online marketplace as well as in the offline one. Or, in other words, to break out of the calf-cow system (called “client-server”) that we’ve been stuck in since 1995. I believe the personal nature of privacy, as it has been understood plainly since the late Pleistocene, requires that.

Some of the tools are already there. Public key cryptography, for example. Link contracts in XDI. The stuff Alec Muffett starts talking about in Slide 47 of his presentation here. Same goes for much of the work being done by the ProjectVRM development community. As ordinary folk we don’t need to understand the technologies behind all that work, but it helps to know that we’re not starting from zero.

At the very least we need some perspective here, based on the fact that we have hardly begun to explore what it will take to create physical-grade privacy on the Net. And that as we do, we need to keep it personal. That’s where privacy is best understood and measured. There is also cause and effect. If you and I don’t have privacy online, society won’t either.

 

 

How C2B becomes more like B2B

Buyer's Insights imageRay Collins in Buyer Insights asks, How Long Before Consumers Start Buying Like Corporations? He sees “B2C markets going the way of B2B markets with a dramatic shift in power from seller to buyer.”

In business-speak, B2B is business-to-business, and C2B is consumer- (or customer-) to-business. Or vice versa, as used above. The context here is an increase in power on the buy side in general.

Ray adds,

For many decades there has been talk of an end to the era of mass marketing. However, until now it was just talk. That is because although targeting the ‘customer of one’ sounded good, the technology did not exist to make it possible.

A new book by Doc Searls called ‘The Intention Economy: When Customers Take Charge‘ envisions how new technology will kill the age of mass marketing. It means an end to the ‘Calf – Cow model’ where the consumer is powerless and the supplier is all-powerful.

No longer will consumers be simply”targeted” “captured”,” “locked-in,” “owned” and “managed” by sellers!

… This is the information or  ’Big Data’ age. As consumers we leave a rich digital trail through our use of; loyalty cards, online retailers, web browsers and online search engines, as well as our social networking pages.

For sellers this information is power. But that may not always be the case.

Instead of sellers using this data to sell more effectively to consumers, how can consumers use it to buy more effectively from sellers? Well, the answer is an emerging technology called VRM.

‘VRM, or vendor relationship management is a category of business activity made possible by software tools that provide customers with both independence from vendors and better means for engaging with vendors.’ That is the definition fromProject VRM at Harvard.

To quote Doc Searls: ‘For most of the industrial age, companies have been obsessed with getting the attention of prospects and customers…’ But now ‘we can make our intentions known personally and in ways that can cause and sustain genuine relationships. And, where no relationship is required, we can connect, do business, and move on, with less cost and hassle than ever.’

…In the Attention Economy of mass marketing vendors focused on getting the buyer’s attention and marketing, or advertising was all powerful.   But in The Intention Economy the consumer buyer notifies the market of the intent to buy, and sellers compete for the buyer’s purchase. It is a shift in the balance of power and that is something that B2B sellers know all about.

Iain Henderson of The Customer’s Voice has done much research comparing B2B relations with C2B, and found many thousands of variables in the former and just a handful in the latter. This owed to a relatively even balance of power between customers and vendors in the B2B world (even given the changes Ray notes in his post), and a lopsided one in the C2B world, in favor of the vendor’s (B) side. As customers get more power, however, the variables will only go up, and with them will also rise choices for both sides.

For example, today no company is ready to hear a customer name his or her own terms (or preference for terms) in a C2B interaction (sometimes called a “ceremony”). Few companies are ready to hear a personal RFP or “intentcast” by customers in the wild. Ray (who writes in the U.K.) gives two examples of those:

  • I am looking for a mountain bike, in Hull, with 500 pounds to spend – p.s. as my facebook wall shows I am into extreme biking and am rather tall!
  • I am looking for a child’s stroller in the Lewisham area and have 150 to spend – p.s. I am a member of the fair trade alliance, so ethical products appeal to me.

As VRM development matures, we’ll start seeing these scenarios becoming common.