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September 22, 2014

Creating a Lucrative Market for Digital Privacy

Posted by Suryaprakash K. (View Profile | View All Posts) at 10:48 AM



Samsung buys SmartThings [Source: http://www.youtube.com/watch?v=2owuLOntyj4]

We're one step closer to that surreal society in which everything that surrounds you and comes in contact with you is connected to the Internet. It's easy to get quite excited about the prospect of just how convenient your personal life might become when the Internet of Things (IoT) takes on a massive scale.

There's a lot that needs to happen first. Some technology analysts predict that it could take five years or so for products - everything from table lamps to bracelets to coffee makers - to be embedded with sensors that allow them to be connected. It seems corporations are taking the IoT seriously. It reminds me when the world wide web just started becoming popular. Companies made sure they reserved the appropriate URL for their homepages even if they didn't know how they were going to use the net. I even recall a prominent CEO in the mid-1990s saying that he wasn't sure how the Internet would affect the various industries that his conglomerate was involved in. But he was nevertheless making sure they were prepared for the possibilities of how the web could affect commerce down the line.

The promise and potential of the IoT is no less exciting. Enterprises of all stripes know that it's going to be a game-changer - whether or not they're on the front lines of these changes. Those companies that have direct exposure to the rapidly evolving market for the IoT are the ones taking the most significant steps now. For example, it was recently reported that Samsung just dropped a cool $200 million on a start-up called SmartThings. It's just one of many new companies dedicated to the IoT. The platform will allow the owner to control all of her Samsung-branded devices and appliances from her Samsung mobile phone.

There indeed is a scramble to be the first among the major brands and companies that control the platforms that make the IoT possible. But I'm going to make a bold prediction: There will be another lucrative market that develops alongside the IoT - one that ensures privacy. At a certain point the Internet of Everything will become so huge that consumers will value the ability to more or less escape from that network. Consumers aren't the only ones who will make a market for privacy. So will enterprises of all stripes. One place this is already playing out is in the financial services arena.

For years the communications platform of choice for the world's major banks has been the Bloomberg terminal. For those of you who aren't familiar with it, it's a one-stop shop for big banks to communicate amongst each other and look up information about the capital markets. Yet now we're learning that a consortium of banks are getting together to invest in a platform that would take their communications completely in-house. It's been reported that Goldman Sachs is considering taking a stake in the chat platform known as Perzo. Among other banks interested in making an investment in the chat service are Morgan Stanley, JP Morgan, Deutsche Bank, HSBC, and Bank of America. These banks are all archrivals, yet they've expressed willingness to work together and invest in a communications platform that would conceivably make their chats ultra-private.

If you have doubts that there is increasingly a premium placed on privacy, check out the Perzo homepage. It's designed to look like a locked bank vault. We're also seeing start-ups emerge that allow regular consumers to send text messages and images that only exist for short time before vanishing. It's said that every action that is done digitally makes a stamp that will exist permanently, somewhere. As the IoT becomes more of a reality, look for new enterprises to address the need for people and companies to have as light of a digital footprint as possible.

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