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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

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Page 1: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 2: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 3: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

••

••

•••

• •

••

••

••••

• ••••

• • ••

••••

••••

United StatesArgentinaBrazilCanadaChileColombiaMexicoVenezuela

AustriaBeneluxCzech RepublicDenmarkFinlandFranceGermanyGreeceHungaryItalyNorway

PolandRussiaSpainSwedenSwitzerlandTurkeyU.K.

AustraliaChinaEgyptHong Kong (AsianResearch Center) IndiaIndonesiaIsraelJapanKorea

MalaysiaNew ZealandNigeriaPhilippinesSingaporeSouth AfricaTaiwanThailand

IDC’s International Research

Page 4: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 5: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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)

Page 6: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 7: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 8: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 9: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

Canadian PCS Phones With Internet Access (%)

Source: IDC Canada, May 2000

0102030405060708090

100

1999 2000 2001 2002 2003 2004

Per

cen

tag

e

Page 10: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 11: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 12: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 13: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 14: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 15: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 16: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 17: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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.

Page 18: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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).

Page 19: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 20: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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.

Page 21: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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)?

Page 22: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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.

Page 23: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 24: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 25: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

The case for legislated protection

• Continued business ambivalence• Superficial adherence to four pillars of

privacy protection• Increased consumer trust

Page 26: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 27: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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.

Page 28: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 29: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

Warning:

No single privacy solution can fit all

needs.

Page 30: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 31: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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.

Page 32: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

Privacy Enhancing Technologies

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

Page 33: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 34: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

Payment Agent ArchitectureSource: IDC, 2000

Page 35: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

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

Page 36: Never Lost, Always Found: The business case for privacy 2nd Annual Privacy and Security Workshop Faculty Club, University of Toronto Nov. 1, 2001 Lawrence

Want More Information?

• This Presentation:

Lawrence Surtees

[email protected]

416-369-0033 ext. 297

• Customer service:

Stephen Symonds

IDC Canada

416-369-0033 ext. 266