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Scary Technology #3 - Why companies can't be trusted with our data

By | October 15, 2010, 1:56pm PDT

Summary: Can you or an employer be trusted with your most personal data? Are better laws and ethical standards needed to guide the development and use of new technologies?

Yes, I’m pretty torqued about the flippant, wrong and error-prone ways companies play fast and loose with our personal data, our privacy and our identities.

Let’s face it – these companies are poor, very poor stewards of our information. I’ve had my identity hacked twice at my old college alma mater. That hallowed institution kept former student information online decades after I attended it and, worse, stored it via social security number. They didn’t fix the problem after the first breach. No, it took two breaches to get sort of serious about it.

I don’t trust businesses to protect our data. One retailer my family frequented didn’t protect the credit card data transmitted in its retail stores. That gaffe caused us to replace a lot of credit cards.
Firms make a lot of mistakes regarding our information. First, they assume it is their data. Legally, that might be right but not if it gets misused, hacked, etc. At that point, they realize it is our information and it is now a liability of the company. Where businesses get tripped up is that they think this information is just data when to us it our identity, our private information and something very valuable to us.

The second mistake businesses make regarding our information is to assume that it is constant. It isn’t and their records are often out of date.

The third mistake businesses make is to assume that their information is correct. Man, is that one wrong, wrong, wrong. I know lots of people who tell marketers different birth dates than their real one. They fib about their income. They do this for many reasons but I do it because I don’t want this data misused by others to commit identity theft. No one really should know my mother’s maiden name or the street I grew up on.

Businesses collect more information than they need, don’t protect the data we give them and then don’t even use the information we willingly give them. How many new product warranty cards have you filled out in your life? Why in the world does a refrigerator manufacturer need to know what hobbies you have or whether you like casino gaming? These firms ask for this information to sell to others. They don’t need it to administer warranties or provide service. However, in all of the dozen or so major appliances I’ve bought the last three decades, I’ve never heard from any of these appliance firms. They don’t use the information we give them except to violate our privacy and sell our information to others.

No, I don’t believe businesses take our privacy, data and identities seriously as they don’t see customers as assets. Look at their balance sheets. Customers aren’t there. No, we’re a cost to them and our costs are buried in their call center and support line items in the income statement. To most firms, customers are something to have as little contact as possible post-sale. Customers are though a rich source of data to be sold, re-sold and sold again. Customers, to too many firms, are faceless entities you do things to (not with).

I get a lot of marketing magazines. In the back of some of them are advertisements from firms hawking mailing lists. Yes, virtually any magazine you subscribe to is selling your information to list providers. Even more galling, magazines you pay for are doing this to you. But, I have real problems with manufacturers or retailers selling very personal information to others. Honestly, just because you ordered some incontinence products via a web-merchant doesn’t mean you want your mail box filled with offers from other retailers of similar products or services.

I don’t want a GPS enabled cell phone as it’s no one’s business where I am. I don’t want to be bombarded with sales pitches from nearby merchants. I don’t want anyone knowing when I’m out of town as I don’t want thieves hitting my home. You see, my location is my business (not someone else’s).

New technologies are presenting us opportunities to track our children, our spouses and our friends. But should we? While some applications of this technology make sense (e.g., using GPS to find a lost Alzheimers sufferer), the same technology can be used to invade the privacy of others. The issue here is that technologists lack a code of ethics for the amazing things they create (see prior post) and, equally bad, people and companies misuse these new technologies. We need new ethical standards and maybe new laws to better protect the personal liberties we should have in a free country.

I think we all should pour it on when it comes to privacy. Call, write, phone, pester, etc. every political candidate you know. I’ve written a couple of letters to our state attorney general – have you?

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Brian is currently CEO of TechVentive, a strategy consultancy serving technology providers and other firms. He is also a research analyst with Vital Analysis.

Disclosure

Brian Sommer

I am co-owner of TechVentive, Inc. The company has been engaged on numerous consulting engagements, often for technology firms, service firms and litigators. As a general rule, I do not write about current clients of TechVentive. Should that occur, I will note this in blogs. Readers should assume that I have had client relationships with many ERP and other technology providers. Some of these relationships may be quite small and short-lived while others more significant. One of TechVentive's business units publishes research reports about technology providers. As a result, this business receives small amounts of revenues from a wide variety of software firms, software buyers and others when they purchase copies of reports. Some firms do secure reprint rights to these reports. None of these purchases, individually, represents a significant amount of total revenue for me and the nature of it is hard to predict where it will come from. I also provide some marketing strategy and/or market segmentation work for software firms as I have developed a unique database that segments the largest 4000+ technology buyers in the world. Many technology firms periodically engage me for unique views into this database for future marketing campaigns. I do not blog about these efforts and do not blog about client firms while they are active clients unless some pressing news story erupts. If that event occurs, I will indicate any perceived or real conflict of interest. Occasionally, I will develop unique intellectual property pieces for technology or service providers. If I should blog about a vendor with whom I have recently developed a special information product, I will note this in a blog to avoid any appearance, real or unintended, of bias. For the most part, I have no investments in technology firms. While I've been offered friends and family stock and other inducements in the past, I have steadfastly refused these. I used to be a partner with Andersen Consulting and had no ownership stake in the firm for many years. I frequently refer to this in my blogs and do not hide my prior association with the company. I did purchase a few shares of Accenture and Cognizant stock in late - 2008. I have sold some of those positions in late 2009. Readers should assume that most software conferences that I write about involved some measure of fees waived and/or travel reimbursement. I do not charge vendors to attend these events nor will I accept payment for same. I do get reimbursed for many speaking engagements. I generally note at the end of blogs whether the vendor reimbursed me for travel expenses. Generally, this includes airfare and hotel. I do not request, receive nor accept travel perks such as first class airfare.

Biography

Brian Sommer

Brian is in a unique position to diagnosis the winners and the losers in technology and services. He was the longest running (10 years) and most senior director of Andersen Consulting's (now Accenture's) global Software Intelligence unit - a position that required him to pick the best possible software solutions for hundreds of clients globally. He advised the firm on ERP software market forecasts and helped establish manpower planning estimates by vendor for deployment globally.

Brian continues to remain close to technology buyers and sellers. When he left Andersen Consulting, he co-created a dot-com with blogger and former arch-enemy at Price Waterhouse, Vinnie Mirchandani. That firm helped broker efficient services contracts between software buyers and systems integrators. Since then, he's created TechVentive, Inc. - a company that helps technology firms better understand their markets - and Vital Analysis - the research and publishing arm of TechVentive.

Brian still travels the world and publishes an impressive number of articles, research reports and blog posts annually to help software and services buyers make better business decisions. He can be reached at: brian @ vitalanalysis.com

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RE: Scary Technology #3 - Why companies can't be trusted with our data
FAULKNE 13th Oct
Good day to confirm this comment I would appreciate T h e b e s t o f Z D N e t d e l i v e r e d your website very nice to everyone Yes, Oracle is the only one with shared-disk architecture, but that is there advantage. It means you can add or remove nodes and the database lives on. In a shared nothing architecture, if you lose a node, you lose the system. I'm sure Oracle appreciates EMC highlighting their advantage.I also desire to signal in your RSS feeds. Thank you as soon as once again and maintain up the great operate Awesome post! Thank you very much || thanks for nice content this is really benefit to me.
Over three (?) years ago the FCC mandated that every cell phone be given the ability to locate it when it is on - so now you have a semi-GPS tracking device on you whenever your cell phone is on - at least accurate to within 500 feet anyway.

And yes, data is $ and only after a company loses $ for losing someone's data that is traceable back to a unique person do they get serious about it.
0 Votes
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You are preaching to the choir
P. Douglas 15th Oct 2010
A lot of people don't realize the harm that can come to them, through the abuse of private information. Every time you place private information into someone's hands when you don't have to, you put yourself unnecessarily at risk. From what I've seen, mistakes like this, come around to haunt everyone, sooner or later.
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Double edged sword
CobraA1 16th Oct 2010
Indeed, it is a double edged sword. It can harm as much as it can help.

I think the people who want to push tech for the sake of tech really need to think about what they are doing.

The best way to push tech is to push it only to help us, not push it at any cost.
Yes because I feel uncomfortable with myself already from all of the technology around us. Where are the days where not everybody had a computer or a myspace account and spent 10 hours a dayy on a computer?
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Anybody who reads your blog probably thinks along your lines. Sadly, it is clear that the majority of people do not think along these lines. Witness the success of Facebook and Google.

The most insidious gatherer of personal information is Google. They do it by providing billions of people "free" apps and services, and people just love it. Yet every time you use a Google app or service, or a web page with Google script in it, they are adding to their profile of you.

While they claim to "do no evil", they are a commercial company and will do what they need to to make money and grow.

The dangers of companies like Google are threefold. They could have a change of policy through management change, they could have a change of policy through being acquired, or most dangerously, they could suffer internal leaks.

We have already seen the last within Google, yet the furor only lasts a few days. It is only a matter of time until someone in Google decides to make a few million by selling some, or all, of their database.

In comparison, Facebook is rather innocuous as they are more upfront about acquiring your personal data. Unlike Google, who do it by spying, Facebook lets you put most of the data on your website.

The bottom line is that, it is only when there is a major breach security that some of the public will wake up. We need an informational 9/11 to create some public awareness.
As long as this is true, and I don't ever see it being otherwise, corporations will continue to skimp on security. In my observation, whenever it comes time to cut IT costs, the security function gets hit first and hardest. Corporate IT management will always give short shrift to security, because they do not see a huge ROI on it, and never will. Why spend money on security, when you can buy more servers? I see this all the time, and it will never change. Anyone who thinks the corporate holders of your personal data have any interest in maintaining security is hopelessly deluded. They'd rather just risk a breach, the small financial penalty, and the low cost of credit monitoring for the affected customers, than actually make their security better than minimal. Name one company involved in a major security breach that has suffered any real, long-term business losses. Or any meaningful financial penalties in fines and court judgements. Can't? Didn't think so.
LOL Technology is a waste of time

Won't be long now before Soylent Green kicks in and we all become wafers
The Billion Dollar privacy question really is :Good or Evil: Have We Shared Too Much with Facebook , Google & Apple? http://ityb.it/2p8Hr this is a great info graphic that sums it all up. We all really need to start thinking about this issue and our personal data
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Good day to confirm this comment I would appreciate T h e b e s t o f Z D N e t d e l i v e r e d your website very nice to everyone Yes, Oracle is the only one with shared-disk architecture, but that is there advantage. It means you can add or remove nodes and the database lives on. In a shared nothing architecture, if you lose a node, you lose the system. I'm sure Oracle appreciates EMC highlighting their advantage.I also desire to signal in your RSS feeds. Thank you as soon as once again and maintain up the great operate Awesome post! Thank you very much || thanks for nice content this is really benefit to me.

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