How Personal Cloud Networks Enable New Business Models2013-07-02Gary Rowe, CEODrummond Reed, CTODan Blum, Principal Consultant

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Introducing: Gary Rowe, CEO• 35 Year technology executive with Data General,

Honeywell, NCR, AT&T• 1998-2009: President, Burton Group

– Highly respected research and analyst firm in identity, directory, security, cloud computing and privacy areas

– Grew annual revenue from $1.5M in 1998 to $30M+ – Sold to Gartner in Dec. 2009

• 2010-Present: Active investor with Tech Coast Angels in San Diego

• 2011-2012: Advisor to Respect Network Corp• October 2012: Joined as CEO

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Today’s Presentation Will Cover

1.Gary• The problem: lack of personal control on the Internet

• The solution: personal clouds and personal cloud networks

• Major benefits of a personal cloud network

2.Drummond• How it works: the 3 layers of a personal cloud network

3.Dan• Next steps: bringing personal clouds and business together

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The Problem: Managing Personal Data, Communications, and Commerce Online

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For many people, managing personal

data and communications is…

Too much work Too unsafe

Too distractingToo many owners

OVERWHELMING

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Personal computers, smartphones, and social networks were supposed to make all this much easier for us…

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…instead they have just given us more data, relationships, and communications to manage—

and less control

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Lack of Control Often Means Lack of Privacy

• Without data ownership there can be no expectation of privacy• Aggressive data aggregation & behavioral tracking is causing further erosion

– Geo-location data on mobile devices– Tracking tied to social networks and social login services– Ads popping up with a context you didn’t think you had exposed– Google and Facebook everywhere, correlating your data– WSJ “What They Know” series of articles– “Creepy factor”

• Consumers accept some lack of privacy in exchange for valuable services, but we are approaching a tipping point as businesses push for more and more private data

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Businesses are also Between a Rock and a Hard Place

– Want user data at scale, but its hard to quantify ROI

– Unsustainable dose of “big data steroids” to maintain growth

– How can “big data” comply with rising regulations internationally?

– Only a few huge businesses with large lobbying and security expenses can win at that game

– Other businesses reduced to taking the crumbs on the table

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The Solution: Personal Clouds

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What is a Personal Cloud?

• A cloud-based platform the individual owns and controls– A repository for my data, applications and preferences – A place to manage connections, relationships, communication– My oasis on the Internet

• Secure, lifetime data repository with NO ambiguity in terms of who controls the data

• A platform for applications—much like a personal computer or smartphone—but running in the cloud and accessible from all my devices

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Personal clouds are #3 on Gartner’s list of Top 10 Strategic

Technologies of 2013

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Many vendors already offer proprietary personal cloud storage solutions for this purpose

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But cloud storage is just the tip of the

iceberg

The real potential of personal clouds is

much larger

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Why? Because a personal cloud is more than just a way to share data between all of your devices… Personal Cloud

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…it is a way to share data across a new kind of network

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This is a dramatically different model than today’s social networks, whose value lies in aggregating and centralizing vast quantities of personal data

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A peer-to-peer trusted communications network

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A network that can also safely connect people to businesses

Business Cloud

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A personal cloud network

Business Cloud

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So a personal cloud network brings Privacy by Design to personal data sharing on a global scale

Business Cloud✔

✔ ✔

✔✔

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Personal Cloud Network Benefits

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Each link on the network is a secure communicationsconnection called a personal channel

Personal channel

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A personal channel is an opt-in permissioned relationship for exchanging both secure messages and secure data

Secure messaging

Secure data sharing

Respect Network communications are based on the open standard XDI semantic data interchange

protocol

Business Cloud

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So the first major benefit is providing a P2P channel for communication and semantic data exchange

Business Cloud✔

✔ ✔

✔✔

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This leads directly to the second major benefit: a personal cloud network can offer network-wide

safe single sign-on

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For example, Respect Connect will offer an alternative to Facebook Connect through your personal cloud

Personal cloud loginsSocial

network

Social logins

• Proprietary• Not portable• Not contextual• Limited data

sharing options• Depends on the

social network• Lost if you lose

the account

• Open standard• Portable• Contextual• Unlimited data

sharing options• Under your

personal control• Protected for life

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The third major benefit is that, just like a social network or a smartphone, a personal cloud network is a

platform for new apps

Social Mobile

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However these apps can offer new trusted data sharing services not available from social/mobile apps today

Secure messaging

Secure data sharing

Personal clouds will enable developers to:• Strongly assure users that the app will respect

each user’s personal data• Securely message and intelligently notify

users without writing any additional code• Store and access shared data with a full,

standard, portable permission model• Create new shared data types at either the

global or community levels• Give users full data portability with no

additional effort

App Cloud

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The fourth benefit is that a personal cloud network is the next major step in digital relationship management

This is the vision of Vendor Relationship Management led by Doc Searls at the Harvard Berkman Center

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For a marketer, a personal channel is a new tool for building lifetime relationships and high-loyalty customers

Ongoing intimate dialog about customer needs and company offers

Personal channels enable businesses to:• Give customers one-click access (e.g., sign-

on, ordering, receipts, recommendations)• Learn more about a customer with one-click

(e.g., sizes, preferences, reputation)• Be notified about customer events and

intents (e.g., change-of-address, new baby)• Notify customers about exactly the topics in

which they are interested• Retain customers no matter how often they

move or change contact addresses

Business Cloud

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How it Works: The 3 Layers of a Personal Cloud Network

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Introducing: Drummond Reed, CTO

• 1995-2007: Co-Founder & CTO, Cordance• 2004 – Co-Chair, OASIS XDI Technical Committee• 2005 – Founding Board Member, OpenID

Foundation• 2009 – 2010 Executive Director, Information

Card Foundation• 2010 – Founding Executive Director, Open

Identity Exchange• 2011: Co-Founder Respect Network

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Building a successful personal cloud network

requires all three layers of the “BLT sandwich”—business, legal, and

technology

Technical Layer

Legal/Trust Layer

Business Layer

Members

The technical layer: the personal cloud “stack”

Members People & Businesses

Mobile AppsWhispe

r

JSON & XDI

Endpoints

Apps

Discovery Dictionary Reputation Billing Signaling

Network Services

XDI Endpoints

CSPs (Cloud Service

Providers)

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DOXDesktop

Apps

Web Apps

Respect Network

APIs

Peer-to-PeerPersonal Clouds

SquareTag

Registry

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The technical layer: semantic data model

• A personal cloud is modeled as a semantic data graph

• The graph maps your identities, data, and relationships across multiple providers

• Link contracts in the graph enable privacy-respecting data sharing – it’s your choice

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The technical layer: XDI semantic data interchange protocol

Secure messaging

Secure data sharing

XDI is an open standard from OASIS for:• Contextual identification of people,

businesses, devices, and data• Global persistent addressing of entities,

attributes, and relationships• Scalable semantic mapping of data from

different sources and schemas• Interoperable authorization using XDI link

contracts and policy expressions• Privacy and data portability by design

Business Cloud

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Even with the best technology in the world, without a strong trust

model no one will use a personal cloud network Technical Layer

Legal/Trust Layer

Business Layer

Members

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Type Trust Framework

U.S FICAM

Status

U.K. Identity Assurance

U.S. NSTIC

Kantara Identity Assurance

Telecom Data Verification

Respect Trust Framework

Mydex Trust Framework

Home

OIX

OIX

OIX

Kantara

OIX

OIX

OIX

Live (2010)

In progress

In progress

Live (2010)

In progress

Live (2011)

In progress

Government-Initiated

Industry-Initiated

User-Centric

Digital trust frameworks are a new tool for combining technology and policy to achieve large-scale trust online

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Designed specifically for the privacy and security requirements of a P2P personal cloud network, the Respect Trust Framework

won the Privacy Award at the 2011 European Identity Conference

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To reach its potential, a personal cloud network

also requires a sustainable, scalable

business model

Technical Layer

Legal/Trust Layer

Business Layer

Members

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For example, the Respect Network business model is patterned after the credit card interchange fee model

Payment

Transaction Relationship

Issuing bank Acquiring bank

Interchange fee$

$$

$Relationship fee

$

$$

$Rewards Rewards

On a credit card network, businesses pay interchange fees based on the

value of the transactions facilitated by the network

On the Respect Network, businesses pay relationship fees based on the

value of the relationships facilitated by the network

Personal channel

Cloud provider Cloud provider

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This model has already attracted a rich ecosystem of partners

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Next Steps: Bringing Personal Clouds and Business Together

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Introducing: Dan Blum, Principal Consultant and Chief Security Architect

• Internationally-recognized security and identity expert• 1998-2009: Burton Group

– Principal Consultant for large enterprises, leading technology providers– Research Director for Identity and Privacy Strategies (IDPS)– Lead author on initial IDPS Reference Architecture– Consultant for U.S. E-Authentication and Canadian Cyber-Authentication

programs (2004-2006)– Research Director for Security and Risk Management Strategies (SRMS) and

lead author on SRMS Reference Architecture

• 2010-2013: VP & Distinguished Analyst at Gartner– Agenda manager for security reference architecture– Lead analyst for cloud security and other topics– Won Golden Quill Award in 2011

• March 2013: Joined Respect Network to develop consulting practice and create peer cloud security guidance

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Understand the Personal Cloud Value Chain

Developers

Businesses

Consumers and businesses receive the relationship value

produced by the network (businesses pay for this value)

Cloud Service Providers (CSPs)

Consumers

Relationship

As with smartphones, developers build value-added apps for the platform and are paid by buyers of those apps

CSPs deliver cloud hosting services and are paid both

relationship fee revenue and direct value-added service fees

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• Lifetime customer relationship management• Safe, permanent single sign-on• One-click semantic data sharing• Secure cloud-to-cloud messaging• Intelligent notification and event processing• Strong assurance of privacy & respect

For Businesses Value proposition:

Next steps:

• Discover: What business models and opportunities for personal cloud networks make sense in our vertical industry?

• Evaluate: What use cases can we enable? What providers could we use?• Plan: How do we make the business case?• Implement: What architecture and implementation strategy gives us

the best path to value?

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• New revenue stream• New service offerings• Build customer trust• Gain customer insight• Increase customer retention• Improved security/privacy compliance

For CSPs Value proposition:

Next steps:• Discover: How can we enhance existing services or create new services

as a personal cloud provider?• Evaluate: What technologies should we use and which partnerships

should we seek?• Plan: What levels of assurance should we support? • Implement: How do we develop security and privacy architectures fit

for the purpose?

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Upcoming Respect Network Webinars

• Respect Connect: From Social Login to Personal Cloud Login• Trust and Reputation on a Personal Cloud Network• CRM Meets VRM: How a Personal Cloud Network Will Enable

Real Vendor Relationship Management• Connecting the Internet of Things to the Internet of People

Need Something More? Respect Consulting: Planning Workshops or Engagements

• Purpose– Assess an organization’s opportunities and readiness for personal cloud– Develop a strategy, plan for the future

• Assessment factors– Business model and customer issues– Geographical, technological and regulatory profile– Baseline security, privacy and identity postures

• Benefits– Discover business opportunities and use cases for personal clouds– Identify gaps and issues– Discover stakeholders in the business, facilitate discussion– Develop vision, strategy, architecture and implementation plans

Gary Rowe, CEODrummond Reed, FounderDan Blum, Principal Consultant

gary@respectnetwork.comdrummond@respectnetwork.com

dan@respectnetwork.com