Technology Predictions - TMT Trends 2008 - Part 2

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From anonymity to authenticity

It is often argued that one of the great benefits of the Web is anonymity. Contributions to the Internet, whether in the form of blogs, comments on products, video uploads, dialog within chat rooms and contributions to online encyclopedias, can all be made under aliases.

In some respects this could be viewed as an extension of freedom of speech. Not only can users say what they want and upload what they wish, but they can do all of this without revealing who they are. As a result, disappointed tourists could provide negative views of their experiences without fear of retribution from the travel agency, or employees could offer honest feedback on their workplace to prospective co-workers, without fear of censure.

Such freedoms can be seen as a force for good. But they also, unfortunately, permit a growing variety and alarming volume of abuses. In 2008, there is likely to be an increasing clamor, from regulators, users and online traders, for the Internet to require people to provide authenticated identity every time they make any transaction via the Web.

Many sites allow anonymous contributions. Pedophiles have abused this characteristic in chat rooms, posing as young children or teenagers to gain the confidence of potential victims65. Online photo sites appear to be increasingly targeted by pedophiles, with such sites representing more than 10 percent of all URLs reported to law enforcement and other hotlines in the United Kingdom in 200666.

Anonymity also creates wider potential for libel against individuals or corporations. Libelous comments published on the Internet have the potential to reach a global audience within hours. It could be argued that the anonymity of contributors to blogs and encyclopedias may encourage some libelers, as the chances of being identified have so far appeared to be slim. One court ruled that an ISP did not have to reveal the identity of a blogger who had been accused of libeling a local official67. One former journalist found it impossible to track down the identity of the individual who had falsified elements of his biography on an online encyclopedia68.

Online auctions, with over 200 million users69, have also been subject to exploitation, partly as a result of the anonymity permitted on some sites. In Japan, the National Police Agency (NPA) found that online auction and other cyber crimes involved computers, based in Internet cafes, whose users are not obliged to provide identification70. The NPA's response to this finding - to ask for all Internet caf users to register and for submitted details to be verified - may be mirrored by equivalent organizations around the world in 2008. In the United States, the Federal Trade Commission has issued a recommendation to users of online auctions not to trade with any seller that cannot be identified71.

Bottom line

A move to online authentication, while initially being regarded as an affront to liberty by some, could ultimately be good for business and for users. For example, bolstering consumer confidence in e-commerce, online auctions, Internet chatrooms and other transactional websites should help sustain growth, suppressing fears about the growing volumes of online fraud or other malign behavior72.

Being the official authenticator of identity could become a fulltime business in itself. User authentication in chat rooms or on social networking sites may increasingly be seen as a feature worth paying for, particularly by worried parents73.

Access to verified user identity may improve the business models for some companies. Moving to a trusted authentication system could reduce the need for moderators in some chat rooms, social networks and online forums.

Regulators from around the world should establish common approaches to dealing with the dark side of anonymity, working alongside privacy protection groups, to ensure a fair balance between authenticity and freedom of expression is attained. Law-makers should agree regulations that protect both service providers and customers. Liability is likely to be a critical issue, because, for example, it remains unclear who is liable for defamatory material posted online - the individual posting the material or the owner of the site. It will be important to define clearly where each party's responsibilities begin and end.

The industry should also bear in mind that it is unlikely that full authenticity could ever be attained on the Internet. As in the real world, those who really want to remain anonymous are likely to be able to. A move to authenticity would be most effective at removing casual offenders.

Ultimately, one of the best tools for dealing with anonymity on the Web may be common sense. Free lunches are as fictional in Cyberspace as in the physical world. An email from an anonymous stranger offering millions of dollars simply in exchange for bank details and home address is likely to be just as much of a scam as a letter or phone call that makes the same claim - and should also be ignored74.

The rising value of digital protection

The first Personal Computer was priced at $1,565, with the display and diskette drives offered as optional extras75. Since then the cost of a PC in some countries has fallen to zero, as long as the customer purchases a broadband contract76. Unsubsidized PCs are available for under $40077.

Since the launch of the first PC, the volume of and, more critically, the value of data stored on PCs, has grown exponentially. Credit card information, address books, clients' business plans and paid-for MP3 tracks may all be kept on the same computer. One way of measuring the value of data is in terms of the replacement cost. But the price paid, in terms of inconvenience, time and loss of credibility in dealing with the aftermath of lost data, may be even greater, and some kinds of data may be irreplaceable.

This combination of the declining average selling price of PCs78 and the increasing value of digital files stored on computers, has increased users' willingness to pay more to safeguard this data. As a result, some consumers can end up spending more on protecting their data than on the underlying device79. In 2008, some owners may spend more on virus protection, online backup and insurance over the lifetime of the computer, than they did on the initial outlay for the PC80.

This trend may extend beyond the PC to other devices, from MP3 players to mobile phones, from DVRs to external hard drives. All hold different forms of valuable data.

Enterprises are already accustomed to spending on virus protection, intrusion detection and back-up services. However with the growing popularity of new technologies and communications tools among enterprises, new threats to data may emerge through seemingly innocuous routes such as corporate wikis, blogs, RFID tags and even text messages81. Furthermore, a rise in criminal activity targeting corporations has been forecast and may make new forms of defense necessary82.

Companies also need to protect against the loss of portable computers, such as laptops, PDAs and high-end mobile phones, which can be more easily lost or stolen. Theft of portable devices has left some companies facing losses running into billions of dollars - far in excess of the value of the hardware83. Therefore, offering IT managers the ability to secure laptops, PDAs and mobile phones in a manner that makes data unreadable once they are hacked into or stolen, is likely to become a substantial opportunity84. Failing that, various forms of new software embedded in the BIOS allow for the recovery of stolen laptops85.

The number of computers and other digital devices looks likely to grow by more than 10 percent in 2008. The cost, both financial and in terms of convenience, of lost or stolen data will probably be even greater, at up to 20 percent, according to one analyst86. In parallel, the amount of potentially valuable data stored is expected to grow rapidly. By 2010, the information added annually to the digital universe will have increased more than six-fold from 161 exabytes to one zettabyte (one followed by 21 zeroes)87.

Keeping data safe from prying eyes and malicious code could become more valuable than manufacturing the hardware on which it resides.

Bottom line

Computer manufacturers that face falling margins as a result of declining average selling prices may need to launch a set of complementary services. Providing a suite of services designed to protect data would address customer demand and also provide a predictable cash flow. PC software providers should focus on the security aspects of their solutions, rather than slower growth applications.

Manufacturers lacking experience in service provision may wish to enter service via alliances or acquisitions. Companies should raise consumer awareness of the widespread risks associated with digital data, from identity theft through to surfing without a firewall. Education could protect all customers and stimulate demand.

Service providers should demonstrate the value of their offerings, particularly to the enterprise sector, where the business case for data protection and other services can be difficult to justify88. This is often because companies struggle to put a financial value on their data89. Helping companies to quantify the value of their bits and bytes will likely be a step in the right direction.

The flight to privacy

People usually regard it as a good thing when a supplier knows them well. If a maitre d' guides us to our usual table, a shop owner knows the names of our kids, or a bartender prepares our favorite drink before we have even sat down, this is generally regarded positively.

A good memory is also a useful skill for a successful merchant. But the computers that underpin online services have vastly superior recall. Not only do they know what people...