Never Lost, Always Found: The business case for privacy

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Never Lost, Always FoundThe business case for
privacy

• 2nd Annual Privacy and Security Workshop
• Faculty Club, University of Toronto
• Nov. 1, 2001
• Lawrence Surtees
• Senior Telecom Analyst, IDC Canada

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Agenda

• Global wireless penetration/growth Canadian
  market
• Wireless Internet market forecast
• Wireless location Mobile e-commerce markets
• Privacy implications
• Consumer attitudes to location technology and
  online privacy

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IDCs International Research
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Rising Concerns Over Personal Privacy1970-1998Q
How concerned are you about threats to your
personal privacy in America today - very
concerned, somewhat concerned, only a little
concerned or not concerned at all?Source Louis
Harris Associates Privacy Journal 2000
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Global Wireless v. Wireline GrowthSource IDC,
March 2000
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Wireless Ascendant Canadian Subscriber Forecast,
1999-2005Source IDC Canada, Oct. 2001
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Canadian Wireless Revenue, 1999-2005Source IDC
Canada, Oct. 2001
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Number of Canadians on the NetSource IDC
Canada, 2001 ICMM Version 7.1
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Canadian PCS Phones With Internet Access
()Source IDC Canada, May 2000
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Canadian Wireless Internet Access,
2000-2005(Millions users)Source IDC Canada,
2001, ICMM Version 7.1
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Wireless Internet Use RisingBrowser hits/month
(000) Jan-Oct 2000Source Bell Mobility
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Non-PC Devices Internet AccessSource IDC
Canada ICMM version 7.1, June 2001
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The Internet eCommerce in CanadaSource IDC
Internet Commerce Market Model, v6.0 Jan. 2000
Consumer ecommerce 2004 19B Business-Business
ecommerce 2004 129B
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Mobile e-commerce in CanadaSource IDC Canada
ICMM v. 7.1
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NGN OSS Wireless CRM
Customer Interaction Portals
Admin-istration
Self- Service
End User
Hosted / Enterprise Apps
Customer Relationship Management
Billing
System Mgmt
Workforce Management
Customer Care
ERP
eCommerce
Bill Presentation
Sales Force Automation Order Config
Contracts, SLAs, Entitlements
Customer Records
Load Balancing / Node mgmt
Trouble Ticketing
3rd party And legacy apps
CRM
Invoicing
OSS/Service Commerce Engine
Rating
Performance Management
Accounts Receivable
Service Fulfillment
Directory
Network Monitoring
Application Performance
Application Management
Assign Design
Inventory Mgmt
LDAPDirectory API
INA QoS AAA
Service Activation
Elements/ Features
Perform. And Reporting
App Network SLA Mgmt
Bundle Definition Management
Apps (e.g. e-mail, www)
ToIP VPNs Wireless
Provisioning
Version License Control
Role and Access Definition and Management
Service Activation
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WASPs Future Wireless Carrier
Service Provider
Collector
Source IDC
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Location Determination

• Location Determination
• By 2003, over 50 of all cellular, PCS and SMR
  subscribers will have end-user equipment that
  allows location determination, rising to 83 by
  2005.

Location Determination is defined as the ability
of the wireless provider to determine the
position of the caller to within 50m for 67 of
calls and 150m for 95 of calls.
Source IDC, Wireless Location-Based Services
Update Market and Analysis 2000-2005, April 2001
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Focus group findings

• A focus group test of user tolerance for
  advertising in new media based on two-hour
  interviews with six groups of Internet-savvy,
  communications-intensive consumers (three
  college-age and three adult).
• (Kiersted and Thorat, IDC Report, Dec. 2000).

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Privacy Issues Location-Based Services

• Protection of Privacy Rights are central to the
  LBS design
• Real time customer control
• Real time customer visibility
• Application Specific Rules
• Time based Privacy Rules
• Subscriber Control of accuracy level

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Location Determination II

• Location Determination
• By 2005, location determination services revenue
  explodes to 5.7 billion for cellular, PCS and
  SMR subscribers.

Revenue is defined as that generated directly
from the location-based services, such as driving
directions, location-specific directory
assistance, restaurant reservation services,
etc., and does not include indirect revenue, such
as increased airtime charges due to higher MOU.
Source IDC, Wireless Location-Based Services
Update Market and Analysis 2000-2005, April 2001
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Platform for Privacy Preferences (P3P)

• Question
• When P3P is operational and bundled into
  browsers, will preference-settings be pre-loaded
  to
• - favor the collection of user data (opt-out) or
  
• -will they be set at maximum privacy protection
  level (opt-in)?

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Wireless Advertising

• Wireless Advertising
• Wireless ad revenues will explode from 1.9
  million in 2000 to 7.7 billion in 2005
• CAGR of 429!
• Contributing Factors
• Wireless Internet growth
• Wireless SMS growth
• Location-determination allows highly targeted ads

Includes ads delivered to wireless subscribers
over both wireless Internet and wireless SMS.
Source Valuable Real Estate Advertising on the
Wireless Internet, March 2001
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Wireless Device Form-Factors
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Say cheese on wireless - Compaq iPAQ H3650 Pocket
PC

• Memory
• 32 MB RAM

• Operating System
• Windows-Powered Pocket PC

• Battery
• Lithium Polymer

• Processor
• 206 MHz Intel StrongARM

• Weight
• 6.3 oz. / 170 grams (including battery)

• Screen
• Touchscreen
• Reflective front-lit TFT
• 240 x 320 resolution

• Dimensions
• 5.1 x 3.2" x .62
• 130 x 15.9 x 83.5 mm

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The case for legislated protection

• Continued business ambivalence
• Superficial adherence to four pillars of privacy
  protection
• Increased consumer trust

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Factors Driving Corporate InfoSec
InvestmentsSource IDC Canada, April 2001
N200Q Which ONE of the following factors is
most important to driving your current investment
in security?
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Seals versus Legal?ATT Labs Survey, 1999

• Asked whether respondents would be more or less
  likely to provide personal information if
• the site had a privacy policy stating information
  would be used only to process the request
• a law prevented the site from using information
  for any purpose other than processing the
  request or
• the site had both a privacy policy and a seal of
  approval from a well-known organization such as
  the Better Business Bureau.
• Source Lorrie Faith Cranor, Joseph Reagle and
  Mark Ackerman. Beyond Concern Understanding Net
  Users' Attitudes About Online Privacy. ATT
  Labs-Research. Technical Report TR 99.4.3. April
  14, 1999. www.research.att.com/resources/trs/TRs/9
  9/99.4/99.4.3/report.htm.

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Frequency of Privacy Concerns Causing U.S. Web
Users to Leave a Web SiteQ Over the past six
months, how many times have you left a Web site
primarily due to privacy reasons?
N779Source IDC Online Consumer Internet
Privacy Survey, Oct. 2000
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Warning

• No single privacy solution can fit all needs.

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Frequency of Privacy Concerns Causing Canadian
Web Users to Avoid e-CommerceQ Have concerns
over privacy of personal information on the
Internet affected your decisions to purchase
online? N3,026Source IDC Canada e-Omnitel
Consumer Internet Privacy Survey, Aug. 2001
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Message from survey data -

• Privacy is not only GOOD for business
• but
• essential for e-commerce.
• And there are novel methods to protect consumer
  privacy online.

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Privacy Enhancing Technologies

• E-wallets
• Single-use credit cards
• Anonymizer sites and software
• Cookie crunchers
• Protective browsers and
• Personal firewalls. . .

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Secure wireless components
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Payment Agent ArchitectureSource IDC, 2000
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Internet User Familiarity with Privacy OptionsQ
How familiar are you with the following consumer
online privacy tools?N779Source IDC Online
Consumer Privacy Survey, Oct. 20001not at all
familiar 5very familiar
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Want More Information?

• This Presentation
• Lawrence Surtees
• lsurtees_at_idccanada.com
• 416-369-0033 ext. 297

• Customer service
• Stephen Symonds
• IDC Canada
• 416-369-0033 ext. 266