never lost, always found: the business case for privacy 2nd annual privacy and security workshop...
TRANSCRIPT
Never Lost, Always Found:The business case for
privacy
Never Lost, Always Found:The 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
2nd Annual Privacy and Security Workshop
Faculty Club, University of Toronto
Nov. 1, 2001
Lawrence Surtees
Senior Telecom Analyst, IDC Canada
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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United StatesArgentinaBrazilCanadaChileColombiaMexicoVenezuela
AustriaBeneluxCzech RepublicDenmarkFinlandFranceGermanyGreeceHungaryItalyNorway
PolandRussiaSpainSwedenSwitzerlandTurkeyU.K.
AustraliaChinaEgyptHong Kong (AsianResearch Center) IndiaIndonesiaIsraelJapanKorea
MalaysiaNew ZealandNigeriaPhilippinesSingaporeSouth AfricaTaiwanThailand
IDC’s International Research
Rising Concerns Over Personal Privacy:1970-1998Q: 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
0
20
40
60
80
100
1970 1977 1978 1983 1990 1991 1992 1993 1995 1997 1998
Concerned Very Concerned
Global Wireless v. Wireline Growth
Source: IDC, March 2000
0
200
400
600
800
1000
1200
1400
1998 1999 2000 2001 2002 2003
Fixed access lines (M)
Wireless subscribers(M)
Wireless Ascendant: Canadian Subscriber Forecast, 1999-2005
Source: IDC Canada, Oct. 2001
0.0
5.0
10.0
15.0
20.0
25.0
Nu
mb
er o
f Su
bsc
rib
ers
(mill
ion
)
0
10
20
30
40
50
60
70
Pen
etra
tion
(%)
Subscribers 6.9 8.7 10.5 13.3 15.8 19.4 22
Penetration (%) 22 28 34 41 48 59 66
1999 2000 2001 2002 2003 2004 2005
Canadian Wireless Revenue, 1999-2005
Source: IDC Canada, Oct. 2001
0
2
4
6
8
10
C$B
Revenue 4.3 5.2 6.0 6.7 7.4 8.0 8.7
1999 2000 2001 2002 2003 2004 2005
Number of Canadians on the NetSource: IDC Canada, 2001 ICMM Version 7.1
0
5
10
15
20
25
30
1999 2000 2001 2002 2003 2004 2005
Millions
38%46%
55%62%
69%76%
80%Per cent of Population
Canadian PCS Phones With Internet Access (%)
Source: IDC Canada, May 2000
0102030405060708090
100
1999 2000 2001 2002 2003 2004
Per
cen
tag
e
Canadian Wireless Internet Access, 2000-2005(Millions users)
Source: IDC Canada, 2001, ICMM Version 7.1
0
2
4
6
8
10
12
2000 2001 2002 2003 2004 2005
Millions
Wireless Internet Use RisingBrowser hits/month (‘000); Jan-Oct 2000Source: Bell Mobility
0
1000
2000
3000
4000
5000
6000
Jan Feb Mar Apr May Jun Jul Aug Sept Oct
Non-PC Devices & Internet Access
Source: IDC Canada ICMM version 7.1, June 2001
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2000 2001 2002 2003 2004 2005
% PCs
% Non-PC
The Internet & eCommerce in Canada
Source: IDC Internet Commerce Market Model, v6.0 Jan. 2000
0
20
40
60
80
100
120
140
160
C$B
illi
ons
1997 1998 1999 2000 2001 2002 2003 2004
Consumer Business
Consumer ecommerce: 2004 $19B
Business-Business ecommerce
2004 $129B
Consumer ecommerce: 2004 $19B
Business-Business ecommerce
2004 $129B
Mobile e-commerce in CanadaSource: IDC Canada ICMM v. 7.1
0.004 0.042 0.2540.882
2.339
5.319
0
1
2
3
4
5
6
2000 2001 2002 2003 2004 2005
C$B
illi
on
NGN OSS: Wireless CRM
Service FulfillmentService FulfillmentPerformanceManagementPerformanceManagement DirectoryDirectory
Services Menu
Assign& Design
NetworkMonitoring
ApplicationPerformance
ServiceActivation
InventoryMgmt
Elements/Features
Perform. And
Reporting
Sales ForceAutomation &Order Config
CustomerCare
TroubleTicketing
Contracts,SLAs,
Entitlements
CustomerRecords
LDAPDirectory
& API
Apps(e.g. e-mail,
www)
INA QoSAAA
ToIPVPNs
Wireless
GatewayGateway
OSS / LegacyInterconnect
App & NetworkSLA Mgmt
Customer Relationship ManagementCustomer Relationship Management
OSS/Service Commerce EngineOSS/Service Commerce Engine
BillingBilling
Invoicing
Rating
AccountsReceivable
Customer Interaction PortalsCustomer Interaction PortalsSelf-
Service End UserAdmin-istration
WorkforceManagement eCommerce ERP
CRM3rd party
Andlegacy apps
Hosted /Enterprise Apps
Hosted /Enterprise Apps
SystemMgmt
SystemMgmt
LoadBalancing /Node mgmt
ApplicationManagement Application
Management
Provisioning
ServiceActivation
BundleDefinition &Management
Version &LicenseControl
Role and Access Definitionand Management
BillPresentation
WASPs: Future Wireless Carrier
Source: IDC
Integrator
ASP
Content
Portal
Financial
Portal
Content
ASP
IntegratorFinancial
Location Location DeterminationDetermination
$$
$$
$$
$$
$$$$
PortalPortal
ContentContent
ASPASP
IntegratorIntegratorFinancialFinancial
Service Service ProviderProvider
Service Service ProviderProviderCollectorCollector
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.
0
20
40
60
80
100
120
140
160
180
2000
2001
2002
2003
2004
2005
Location Enabled Subs (M)Total Cellular/PCS/SMR Subs (M)
Location Determination
Source: IDC, Wireless Location-Based Services Update: Market and Analysis 2000-2005, April 2001
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.
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).
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
MPC Privacy Rules
MPC
SMSC
WAP Gateway Internet
Location Determination:– By 2005, location
determination services revenue explodes to $5.7 billion for cellular, PCS and SMR subscribers.
0
1000
2000
3000
4000
5000
6000
2000
2001
2002
2003
2004
2005
Location Determination ServicesRevenue ($M)
Source: IDC, Wireless Location-Based Services Update: Market and Analysis 2000-2005, April 2001
Location Determination II
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.
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)?
Wireless Advertising:– Wireless ad revenues will
explode from $1.9 million in 2000 to $7.7 billion in 2005
– CAGR of 429%!
– Contributing Factors:• Wireless Internet growth
• Wireless SMS growth
• Location-determination allows highly targeted ads
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
2000
2001
2002
2003
2004
2005
Total Number of Wireless Ads (M)Total Wireless Ad Revenue ($M)
Source: Valuable Real Estate: Advertising on the Wireless Internet, March 2001
Wireless Advertising
Includes ads delivered to wireless subscribers over both wireless Internet and wireless SMS.
Wireless Device Form-FactorsP
IM
Em
ail
& M
es
sag
ing
Pe
rso
na
lize
d I
nfo
We
b C
on
ten
t
Wireless - Today
PIM
Em
ail
& M
es
sag
ing
Pe
rso
na
lize
d I
nfo
Wireless - Today
PIM
Em
ail
& M
es
sag
ing
Pe
rso
na
lize
d I
nfo
Vo
ice
Wireless - Today
= Optional Functionality
= Default Functionality
Wireless Terminal Smart PhonePDA
Wireless of Tomorrow
PIM
Em
ail
& M
es
sag
ing
Pe
rso
na
lize
d I
nfo
We
b C
on
ten
t
eW
alle
t
Vo
ice
En
terp
ris
e A
pp
s
Say cheese on wireless - Compaq iPAQ H3650 Pocket PCOperating SystemOperating System
Windows-Powered Pocket PC
ProcessorProcessor 206 MHz Intel
StrongARM
ScreenScreen Touchscreen Reflective front-lit TFT 240 x 320 resolution
MemoryMemory 32 MB RAM
WeightWeight 6.3 oz. / 170 grams
(including battery)
DimensionsDimensions 5.1” x 3.2" x .62 130 x 15.9 x 83.5 mm
BatteryBattery Lithium Polymer
The case for legislated protection
• Continued business ambivalence• Superficial adherence to four pillars of
privacy protection• Increased consumer trust
Factors Driving Corporate InfoSec Investments
Source: IDC Canada, April 2001; N=200Q: Which ONE of the following factors is most important to driving your current investment in security?
0 25 50 75 100
Previous security breaches
New applications
New systems
Increased corporate awareness
Legislative requirements
Mobile computing
Corporate growth
Customers expectations
Increased network access requirements
ecommerce/ebusiness initiatives
Increased use of the Internet/Intranets
Percentage (%)M id-Size Large
Seals versus Legal?AT&T 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. AT&T Labs-Research. Technical Report TR 99.4.3. April 14, 1999. www.research.att.com/resources/trs/TRs/99/99.4/99.4.3/report.htm.
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?
N=779Source: IDC Online Consumer Internet Privacy Survey, Oct. 2000
14
8
38
20
10
10
0 10 20 30 40
Never
1 time
2-3 times
4-5 times
6-10 times
More than 10 times
% of Respondents
Warning:
No single privacy solution can fit all
needs.
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? N=3,026Source: IDC Canada e-Omnitel Consumer Internet Privacy Survey, Aug. 2001
0 20 40 60 80 100
In past week
Past Month
Past 3 mos
Past 6 mos
Past Year
Never
From any Web site (%); N=2,259 From a trusted Web site (%); N=1,806
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.
Privacy Enhancing Technologies
• E-wallets;• Single-use credit cards;• Anonymizer sites and software;• Cookie crunchers;• Protective browsers; and• Personal firewalls. . .
Secure wireless components
Encryption
Authentication/authorization
Trust
Nonrepudiation
Integrity
Privacy
Assures the overall trust tofacilitate ebusiness
Protects data fromcorruption, destruction,or unauthorized changes
Enforces access controlto resources
Precludes denial of avalid transaction
Protects data fromunauthorized viewing
Provides the underlyingfoundation for allsecurity components
Payment Agent ArchitectureSource: IDC, 2000
Internet User Familiarity with Privacy OptionsQ: How familiar are you with the following consumer online privacy tools?N=779Source: IDC Online Consumer Privacy Survey, Oct. 20001=not at all familiar; 5=very familiar
0
20
40
60
80
5 13 10 9 3 2
4 7 10 9 4 2
3 10 16 15 10 8
2 9 12 15 11 13
1 61 53 52 72 75
Opting Out eWalletsOnline
registrationAnonymous
servicesInfomediaries
Want More Information?
• This Presentation:
Lawrence Surtees
416-369-0033 ext. 297
• Customer service:
Stephen Symonds
IDC Canada
416-369-0033 ext. 266