Before they will power 21st century business, technology innovations will first disrupt 20th century business models. As NYU media pundit Clay Shirkey puts it, disruptions don’t typically take us cleanly from current business model A to new business model B, but from business model A to chaos to business model B. It is often the case that before we can progress in a new direction we must retrace some steps and take time to map out a new route, and this likely will be the case in spades in the digital millennium.

Strikes and law suits are often signs of disruption.  When they are prompted by innovative digital technologies that threaten the status quo, defensive maneuvering by the establishment is not only expected but called for – until a new order emerges that capitalizes on the advantages brought by unstoppable innovations yet assures their fair and responsible use.

The billion-dollar law suit for “massive intentional copyright infringement” brought last year by Viacom against Google/YouTube for providing access to Viacom content illegally uploaded by fans is a case in point. To address the issue, Google introduced a copyright identification system called Video ID, which tracks unauthorized videos. It enables a copyright owner to either block the clip, leave it up, or enable YouTube to sell ads linked to the material and share the revenue. According to a CNET News blog post, “Google said on its blog… that copyright owners were choosing to turn a buck from unauthorized clips 90 percent of the time.”

The CNET News post quoted Google, “It’s clear to our (more than 300) Video ID partners that our technology has created a framework that allows copyright holders to sanction the creativity of their biggest fans…These partners now have a new way to successfully distribute and market their content online.” The CNET News post went on to report, “Several start-ups are working on technology that will track unauthorized videos wherever they exist on the Web and then insert an advertisement into the clips.”

Digital content actually allows for tighter owner control then ever. In the past, media giants whose terms of sale legally prohibited certain personal uses of content could not discover such illegal uses nor enforce their claims, but now copyright owners can do so via the Internet. The Digital Millennium Copyright Act (1998) supports this new-found ability, a result of the powerful lobbying muscle of the media industry. Ultimately, though, the consumer will not be put back in his box, and a win-win solution, such as Google/Viacom’s, will be hashed out for the Writers Guild strikers in Hollywood (they so far won minor concessions for Internet distribution), the New York City cab drivers (they so far lost their battle to shun imposed GPS devices in their cars), and countless conflicts to come.

The immense disruptive potential of digital innovation, however, will take much time to address – 50 years, according to a gathering of prominent CEOs at the 2008 World Economic Forum in Davos – and I agree.

What do you think?

“Trust” Means …?
“Trust” is a gut word.  It’s one of those words we use all the time, but often struggle to define in the context of its use.  When asked about exactly what we mean, we often mumble through some confused description that often includes such words as “assurance,” “belief,” “confidence,” “faith,” “reliance,” “reliability” or even “security” as we try to invoke an empathic nod from listeners.

We love this word.  It has the power to evoke an approving response in all kinds of circumstances, even if we don’t exactly know what we mean!  For example, banks have historically had “trust” as part of their name (e.g., SunTrust Bank, Pacific Trust Bank, California Bank and Trust, Branch Banking and Trust) to help us feel confident in letting them hold and manage our money.  Today, that application of the word “trust” has been adopted by dozens and dozens of technology and Internet companies as part of their company name, invoking the power of the word “trust” to support presumed market predispositions.  (See Volume 1 or Volume 7 of the Digital Trust report series for a sample of companies using “trust” in their name.)

For a long time we have acknowledged the important sociological and psychological dimensions of the word “trust” and the ability to apply trust as a “quality” for people or institutions.  But, even in this application, we are not quite sure what we mean.  And, we have a lot of choices.  For example, Google reports more than 27,000 “hits” when a search for “definition of trust” is pursued!

Uncopyable?!
In an essay in “The Technium” called “Better Than Free,” Kevin Kelly uses “trust” as an example of a quality (of a person or enterprise) that is intangible and uncopyable, and which therefore can have value in a network economy that copies everything over and over and thereby makes things “worthless.” He goes on to name eight values (qualities), not including trust, as attributes that cannot be copied, and which therefore add value to free copies … making the copies “better than free.” It is an interesting point of view, and certainly worthy of reading.

Digital Trust Value for Real
Notwithstanding the soft claims of value for intangible, uncopyable qualities (even including trust), there is a trust contributor that delivers a real, measurable payoff in new value created through security services and technology.  This is the trust created and delivered by security technology and service.  This is digital trust as defined by the Digital Trust research program and report volumes.  (See all the Digital Trust volumes here.) Specifically, digital trust is evidence-based confidence that systems operate as advertised, and that no unadvertised functions are occurring.  It is:

* Announced with features and functions.
* Completed with life cycle characteristics of design, development, deployment and operation.
* Capable of value creation beyond a reduction in the risk of loss.

Digital trust is an important contributor to the full fabric of trust in any context.  But, when examined by itself, digital trust contradicts popular notions about how trust is created, conveyed and valued.  Unlike the “uncopyable” quality that is described in Kevin Kelly’s essay, we find that:

* Digital trust is hard, real and quantifiable.  It measurably affects both speed and cost, and can create value in other ways as well.
* Digital trust is fast.  In fact, “nothing is as fast as the speed of digital trust.” [1]
* Digital trust can be purchased (with money and effort) in at least four ways as seen in Volume 7 of the Digital Trust report series (see “How Much Does Digital Trust Weigh?” on pages 2-5).

Better Than “Better Than Free”
So, “better than free” is certainly an attractive notion to contemplate.  But, once we know what digital trust really is, the value that can be created, conveyed and sustained with digital trust is even better than that!

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1 This phrase is adapted from the original “Nothing is as fast as the speed of trust” as seen in Stephen M.R. Covey, The Speed of Trust (New York: Simon & Schuster, 2006).

Digital Disruptions: Technology Innovations Powering 21st Century Business

Complete with its own blog by Alex Fuss, 2008 LEF Associate on Digital Disruptions, and all of you who contribute to this dialogue on disruptive technologies—those technologies that, per Harvard professor Clayton Christensen, introduce to the market very different value propositions than were previously available.

But I am getting ahead of myself. Let me (Alex, here) kick this blog off with an excerpt from a presentation I gave in April at an LEF Client Forum:

The digital disruptions begun with the Internet’s launch at the end of the 20th century and responsible for a tremendous spike in global productivity promise a second-round impact in the 21st century that we can only begin to imagine.  At CSC we have identified seven categories of digital disruptions that are rapidly impacting today’s business models:

1. New Media
2. Augmented Reality
3. Social Power
4. Information Transparency
5. Digital Spectrum
6. Platform Makeover
7. Smart(er) World

The year-long research effort by CSC’s LEF to identify these categories and delve into the implications of specific technologies they comprise will result in the Digital Disruptions research report, to be released in October 2008. 

Looking back, having worked on the Digital Disruptions report for over a year has undoubtedly broadened my horizons, deepened my research and analysis skills, greatly expanded my network of technology innovators and pundits, and left me with some new habits that should serve me well long after the report is officially released.  Foremost among these habits is the tendency to scour the news daily for any and all technology breakthroughs and filter the announcements and pronouncements through the prism of the report, defracting them through the gradients of its seven themes.

Leveraging the blog, I will, in true Web 2.0-fashion, share my personal thoughts on the implications of relevant industry events as they occur, and solicit your personal and professional comments. I am by no means an expert on the subject – “Digital Disruptions” is too broad and too fast-changing a topic for anyone to master – and look to the collective wisdom of all to help us understand the technology landscape forming before us, and how to best use that shared knowledge to advantage.

Though the report is not out yet, if you would like to familiarize yourself with the report’s themes, you can listen to the podcast of the research preview I gave in April by subscribing to the LEF RSS feed (http://www.csc.com/lefpodcast) and adding the podcast from the LEF Forum, April 2008, podcast 12 “Digital Disruptions.” In addition, Clayton Christensen’s book The Innovator’s Dilemma provides a good foundation for understanding disruption in the context of technology innovations.

I’m looking forward to a stimulating collective discussion, an actualization of theme 3 above: Social Power.

À la prochaine (until next time)…