Now here’s something you don’t see every day: the words “health” and “vault” in the same sentence.  Oh sure, we expect to see “health” and “exercise” or “health” and “diet” or even “health” and “medicine,” … but “health” and “vault”?

Well, let’s all get used to it because Microsoft has launched HealthVault, a free advertising-supported health portal.  (See article.) Others like Revolution Health, WebMD and a number of insurance companies have been working on, or offering, similar portals that allow people to upload their medical records to a Web site and then choose to share that data with doctors, other health care providers or family members. 

Like all the others, Microsoft has offered assurances about patient control over all data submitted and the privacy of all personal information.  But health care information automation in the U.S. has struggled under concerns about the protection of private information and the inability to exchange health care data from one user or application to another.  Despite the efforts under the Health Information Portability and Accountability Act (HIPAA), and studies that show huge potential for cost savings in the health care system in excess of $500 billion over 15 years, the U.S. does not yet enjoy the same progress as some other countries have seen (e.g., Germany, Britain).

Value for Everyone?
If Microsoft (and Revolution Health, WebMD and various insurance companies) is successful over time in its claims of data protection and privacy for the individual, then the individual patient can obtain value from this service.  (None of the health care portal providers have offered up the transparency and evidence of design, deployment and operation to confirm and expand on the digital trust claims being made.) But, this service, and the digital trust that accompanies it, does not offer value to the other important constituencies involved, so it is limited in its ability to pull health care information automation together for the big payoff.

For example, doctors, clinics and hospitals need other kinds of digital trust beyond mere patient records confidentiality to capture value in the service.  Imagine automatic (wireless) digital blood pressure cuffs, thermometers and even digital (wireless) stethoscopes easily, reliably and securely collecting, recording and transmitting patient data to a (secure) standard repository of clinical data (maybe even the HealthVault)!  Parts of this scenario have already been built and are being used in smaller ways.  For example, devices like the Health Buddy are used today in the Health Hero Network.  Or, imagine government accountability reports and pharmacy controls being included automatically!  These functions deliver value for other constituencies needed to succeed in overall value capture.  And, they need different kinds of digital trust to come along with them.

Been There Before!
The Digital Trust report series has chronicled this kind of circumstance before.  The whole scenario around electronic voting (see Volume 4 on “Compliance Management: the Business of Keeping the Business in Business” ) illustrates what happens when digital trust is absent for an important constituency.  In that case, election boards captured value from a claim of digital trust, but individual voters did not see the (different) digital trust necessary for their value payoff.  Only today, as digital trust features and evidences are being made mandatory through law and regulation, do we see the full value trail for electronic voting.

Maybe that’s what it will take for digital trust to emerge completely enough for all of the constituencies involved in health care information automation.  It would be a shame, however, if all we did was wait for law and regulation to force it to happen when the digital trust technology we need is already here.

The first tenet of the Hippocratic Oath is “First, do no harm.” While I’m sure we’ll need a little bureaucratic boost to get standard formats and protocols, I’m also pretty sure that even Hippocrates himself would want us to press on with integrated technology, including digital trust technology, to deliver the tremendous value of better health care at less cost.

Just in case you were wondering, there are many people who do not see intellectual property piracy as a victimless crime.  The latest study cited yesterday in the Washington Post identifies costs to the U.S. economy of $58 billion per year and a loss of over 350,000 jobs in the entertainment industry and its supplying industries.  Moreover, a companion interview with NBC Universal CEO Jeff Zucker on CNBC reported $2.6 billion a year in lost tax revenue, adding to the pain.

Not just tunes, videos and software
So, real penalties to a lot of real people are occurring up and down the value chain in the entertainment industry, with much greater impacts even beyond that industry.  And, it’s a global problem.  For example, as reported in the latest study, of the 13 billion U.S.-recorded songs estimated to have been illegally downloaded in 2005, 9 billion were downloaded overseas.  Further, as pointed out in Volume 3 of the Digital Trust report series (“Intellectual Property Protection: Minding your Mind Power” ), the problems and penalties do not stop with the entertainment industry.  Intellectual property (IP) of all kinds in nearly every enterprise of the S&P 500 accounts for about 80% of the total value of the enterprise!  Protecting IP while enhancing the value of those intangible assets is a prime objective of digital trust.

Calling for better digital trust technology
The latest data also shows that law enforcement and consumer awareness are important in solving the problem.  But, at best, they just help us “hold our own.” Even when content producers make some content free (e.g., see the new Hulu.com advertising-supported site for Fox and NBC programming), the problem gets extended elsewhere in the value chain.  Without better digital trust technology to help deliver fair value for fair use (both inside and outside the entertainment industry), we’ll continue to wage a series of skirmishes to eliminate some illegal outlets and production facilities even while others get started.  We’ll also unnecessarily restrain value capture for IP because we just can’t figure out how to protect it outside the legitimate (licensed) distribution.  This ends up being a case of IP protection “whack-a-mole” as new techniques for violation crop up just as fast as old ones are shut down.

Digital trust technology for IP protection is gradually improving, but there’s still big room for improvement.  Here’s a case where value generation through security is staring us in the face; all we need are a few better ideas!

The conversation is eternal.  In a never-ending quest to out-Apple Apple, Internet music download sites are continuing to invent new ways to attract buyers.  (See article.) Apparently, the iTunes behemoth represents a market too big to be ignored by the music companies themselves or entrepreneurs with “a better idea.” New download services seem to pop up all the time, each of them with a better idea about rights management, pricing, convenience, or some combination of the three. 

Better Ideas for Music Downloads?
Just recently, we’ve seen new ideas from Qtrax, Spiralfrog, AmieStreet, Ruckus Network and Lala.  Perhaps more importantly, equally-sized behemoths like Amazon and Wal-Mart are getting into the act as well.

The music industry is warming to these new download models for two reasons: a viable alternative to decreasing CD sales, and a way to gain bargaining clout with Apple and its iTunes stronghold by creating alternatives to iTunes.  But, the same old problems exist.  How do I compete with Apple’s price and convenience, and legally control the distribution of the content so that everybody who has a value investment gets a fair return?

As for price, perhaps Qtrax Chief Executive Allan Klepfisz said it best when he noted “The idea is to make a better version of free.” Qtrax, Spiralfrog and Ruckus Networks are offering downloads free to consumers supported by advertising sales.  AmieStreet has a new take on the price equation, making songs free at first, but having the price inch up as high as 98¢ based on the popularity of the tune.  In this case, popularity is measured by the number of downloads.  As usual, Wal-Mart has undercut the Apple threshold by offering unfettered tunes free of DRM for 94¢ instead of iTunes $1.29, and DRM-encumbered music for just 88¢ versus iTunes 99¢.  Amazon’s pricing scheme is unclear. 

Are These Ideas More Right?
But price is not the whole story.  Rights management is also key to online music sales; music companies must feel they are getting reasonable compensation for themselves and their artists.  None of the download outlets has access to the full catalogue of music from the major record producers.  Most new outlets are promoting rights-free downloads (with various pricing schemes), but that is a further restraint on the number of tunes that are made available at the price points being applied.  Trust in the technology to give fair value for use remains a stumbling block.  Like iTunes, Wal-Mart is attempting to put a price on rights and give a value to trust for fair use.  For some merchants, control of the technology to create content management (e.g., Apple’s FairPlay) often leads to control of the content rendering devices that can deal with that technology (e.g., an iPod).  So, the value equation for DRM expands to the devices as well as to the value chain for music producers.

Trust, particularly digital trust, is a big factor.  It is at the core of sharing music downloads and, now, even returning them.  Among other things, start-up Lala is planning to allow returns of downloaded songs a user doesn’t like.  Lala’s founder, Bill Nguyen, admitted, “There’s a significant amount of trust involved….But it’s unsustainable if we don’t do it right.” Volume 3 of the Digital Trust series, “Intellectual Property Protection: Minding Your Mind Power,” provides a more complete treatment of DRM as a digital trust technology.

No End in Sight
There is no end in sight to this story of fair value return for content.  In fact, the story gets more intricate with the inclusion of media beyond audio.  For example, NBC will begin offering free downloads of its most popular TV shows in the next few months under a service called NBC Direct.  Having appropriate rights management for the shows, which include “The Office” and “The Tonight Show With Jay Leno,” is a key factor to making this breakthrough service work.  The shows, which will be available the night they are broadcast and will contain ads that can’t be skipped, are not transferable to other computers or disks.  After seven days, the shows (files) essentially self-destruct.  So, rights management is a big part of fair value capture for NBC Direct.  An NBC executive emphasized the importance of rights management, asserting that “piracy was and is our No. 1 priority.”

But wait – there’s more!  In addition to the free downloads, next year NBC plans to offer downloads for a fee, without ads, that are transferable and do not self-destruct.  This is a classic example of digital trust, in the form of rights management for content, as a key enabler of new business value.  This kind of value creation through digital trust for intellectual property (IP) is also described in Volume 3 of the Digital Trust series.

Rights in a “Liquid” Form
One of the irritants in many rights management techniques is the need to have rights-managed content transfers to a PC, and then controlled transfers to subsequent rendering devices (players).  As technology continues to advance, the presumption of a specific platform for receiving and rendering content becomes less and less plausible.  One of the main reasons consumers seek to have rights-free versions of tunes is to be able to play them on any kind of rendering device.  Even today, companies like Lala are offering a direct download to the player (in this case an iPod), bypassing the PC altogether.  That doesn’t eliminate the rights management on the iPod (songs cannot be transferred elsewhere), but there seems to be value in eliminating that interim step…especially if the song is somehow “free.” And, it’s a first step to the ultimate “liquid platform” of players of all types.

As technology continues to make the platform more and more irrelevant (more liquid), rights management technology has to keep up.  Otherwise, the clash between fair value and fair use will continue forever.  In the end, the only thing that will matter is the application itself, not the platform on which it sits.  Volume 5 of the Digital Trust series, “Liquid Security: Digital Trust when Time, Place, and Platform Don’t Matter,” explores the emergence of the liquid enterprise and the digital trust that is helping to capture value in this new model of operations.

The Right Right Will be Mighty
New forms of content, particularly in packaging, distribution and rendering, are possible with digital trust for IP.  When flexible and fair rights management is combined with the liquid security that makes the application pre-eminent (not the platform), then we have an explosion of value on our hands.  This is how enterprises can use digital trust to make the most of their valuable IP.

For the first time in two years, Ford Motor posted a quarterly profit!  (Article.)

If you are a Ford shareholder or drive a Ford, that’s wonderful news.  And, we can hope for a sustained turnaround for the struggling auto maker.  But Ford would not even have a shot at becoming competitive if it were not for the value of its intellectual property (IP), including the blue oval logo.  In its quest for cash to fund a restructuring, Ford mortgaged its North American factories and its IP for a $20 billion loan.  Even without knowing exactly how much of that loan is secured by factories and how much by the IP, we know that the loan would not have been possible if the IP, including the brand value of the blue oval logo, had not been included as collateral.

It seems a bit extreme, but that’s certainly one way to monetize IP!  As with anything used as collateral, the lender must continue to value the IP high enough to justify the credit that’s been extended.  So, Ford must work to preserve the value of IP assigned to the loan.  In this current time of tightening credit, the value of IP will probably even need to rise, else credit terms will have to be revised.  If you thought IP was just something warm and fuzzy, think again.  IP, including brand value, has real value, and that real value can be used in real ways.

Companies who recognize this real value pay close attention to ways to optimize the value of their IP, even while protecting its use.  Certainly, the application of information technology security matters a lot in IP protection strategies.  For example, the Chief Marketing Officer (CMO) Council has recently completed studies that show just how important security is to brand reputation and the resulting value of the brand.  Since the great majority of our IP is created, stored and exchanged in soft copy, an IP optimization strategy that doesn’t include security technologies is doomed.

Some enterprises are finding new ways to optimize the digital portions of their IP protection strategies, using new technologies for digital trust.  The IP Protection volume of the Digital Trust report series examines how IP value can be optimized with creative applications of new technologies and new approaches.

The irony of this research is that strict protection of IP is not the answer.  IP must be acknowledged, accessible, in useful formats, monetizable, and accountable as well as protected.  Otherwise, its value (even as Ford has chosen to use it) is not available.

Brand value rises and falls on a number of factors, including the amount of trust that consumers and enterprises assign to the brand.  And, Ford’s problem with IP value (including brand value) continues.  Though not necessarily attributable to problems with digital trust, the latest global brand value rankings show that Ford’s brand value has slipped 19% in the past year.  That could mean trouble for the credit-based restructuring plan at Ford.

Sometimes we think of intellectual property just like clouds – soft, fluffy, interesting to look at, but vaguely unreal.  The reality is that intellectual property delivers value just like plants, equipment and inventory.

Just ask the owner of the blue oval logo.

In this world of online fraud, the last thing I would expect from a financial services company, when calling for customer service, is to be asked for my online password as a means of verifying my identity!  This company assured me they were who they said they were, for I did dial their number.  Yet, with Web sites being spoofed these days, and VoIP on the rise, who says that you can’t spoof phone numbers as well?  So, after I refused to give an “in the clear” password over the phone, they said they’d have to transfer me to their “identity verification service.”

After a long wait, I was finally connected with their fraud unit.  Now, that was interesting.  After presenting my case, they asked what phone number I was calling from.  I gave them my number, still finding it pretty dumb as they could have easily looked at the caller ID.  They acknowledged that the number I provided was, indeed, a number they had on file, so I was then instructed to hang up and they’d call me on that number. 

When they did, I asked again, “Why in the world do you ask for passwords?” Their response was that they have found this is more secure than asking for a social security number and has significantly decreased fraud.  That’s scary!  How in the heck would they know that?  Maybe they have a clearer conscious against identity theft by not asking for SSNs, but what if the password to my credit card account online is the same password I use to identify my credit card or financial account password vault?!  I graciously asked that they refrain from this “worst practice” and consider some other two-factor approaches.

Sad that this whole encounter with identity was only to get me to a point where I could finally tell them why I was calling.  I had recently disputed a credit card charge (online) but was calling to say that the charge was valid after all.