Friday, May 29, 2009

Reading :: Identity in the Age of Cloud Computing

Identity in the Age of Cloud Computing: The Next-Generation Internet's Impact on Business, Governance and Social Interaction
By J.D. Lasica

So here I am at the coffee shop, typing away on my new netbook, still trying to decide whether this particular machine will work for me. But I'm doing all my work using the same tools that I use on my Mac laptop: GMail, GCalendar, GDocs, and of course Blogger. To a great extent, cloud computing has already been widely adopted and has enabled greater device independence, greater portability, and greater opportunities for interconnection and collaboration.

We don't need a report to tell us that - but this report looks ahead to the implications of cloud computing for "business, governance, and social interaction," as the title states. The report reflects the conversations of a roundtable convened in 2008 at the Aspen Institute of "28 leaders from the ICT, financial, government, academic, and public policy sectors" (p.vii). The principals see cloud computing as an important shift: "Like the migration of electricity in the early 1900s from local generation to an electrical grid with metered service, the cloud signals the movement of hard and soft functions such as storage, software applications and services to an off-premises service industry" (p.vii). And in light of that shift, "What control do we have over our identities, security, and privacy? How will it change economic and business models? What are the implications for governance and cyber-security?" (p.vii). The report reecommends "that a user-centric open identity network system is the right approach at this point" since it could allow people to manage their own identities, customize them, and make identity scalable across the Internet (p.viii).

The report starts by asserting that "digital natives" increasingly see no gap between online and offline lives, asserting that "I am whatever I say I am" (p.1). It was not always thus, Lasica reminds us: not that long ago, it was common to assert that on the Internet, nobody knows you're a dog. But now identities are much more articulated, defined, and tied to each other as well as offline presence. The roundtable sees this trend continuing and deepening in the future (p.2).

One consequence of increasing cloud computing is that capacity can be distributed. When corporations run their own server farms, costs are unsustainable, "with server resources often idle eighty-five percent of the time" (p.11). Not surprisingly, companies are moving toward "virtualization -- using someone else's computer to do the heavy lifting for you" (p.7). One example is Animoto, "which scaled very quickly from 50 to 3,500 servers" (p.11), and was able to rent appropriate server space as needed. And this nimble approach means that "when companies adopt virtualization technologies and thus lower on-site energy consumption, IT's footprint should go down dramatically" (p.12).

The report quotes Padmasree Warrior, CTO of Cisco Systems, as foreseeing three stages of cloud formation: first, companies offload their IT to private clouds; second, common standards enable companies to move information from private to external enterprise clouds; third, a public or semipublic "inter-cloud" where entities can share and mash up data (pp.13-14).

All three articulations of the cloud, particularly the third one, have implications for identity. "When the Web first became a mass phenomenon around 1993, we were all free to take on whatever persona appealed to us" (p.15), but social networks began to change that, and "Facebook became a game-changer, kicking off anyone who refused to use their real names. On Facebook and a new breed of copycat social networks, identity is front and center, grounded by real biographies, real friends and real media" (p.16). But this sort of identity is quite restrictive. The roundtable participants predict a "third incarnation of online identity - call it identity in the cloud" (p.17). And "this new system would recognize that eaqch of us has multiple identities. We will be able to spoon out bits and pieces of our identity, depending on the social or business context we find ourselves in" (p.17). An open identity system might reveal only the parts of the identity necessary to a particular transaction, working as a trusted intermediary in the same way eBay intermediates between buyers and sellers (p.18). Multiple identities become necessary and manageable, with business, health care, singles, and virtual world profiles, for instance (p.18). This "identity layer resides not in a governmental or company database but in the cloud" (p.19).

The roundtable participants contrast this notion of a cloud identity with Microsoft Passport, the abandoned plan to create centralized identities (p.19). "The course correction came about not because of a newfound altruism but because of the companies' recognition of a new kind of ecological capitalism, where their business interests were intertwined with the interests of customers, suppliers, and even competitors. Competition has evolved beyond a multiplayer zero-sum game into a more complex, cooperative exchange where mutually advantageous outcomes depend on a new kind of rationality in a wider ecology of players" (p.20).

The participants also discussed how these changes could result in new concepts of money, with information replacing money for many purposes (p.27). We already see this tendency "as instant global communications make possible bartering not only for tangible goods but also for text minutes, airline miles, virtual world currency and other non-physical assets" (p.27). In China and India, people already use prepaid mobile phone minutes as an alternate currency (p.32). To scale, such systems need better website reputation systems, systems that can't be gamed (p.31).

The roundtable "identified twelve ways the cloud will transform business":
1. Greater global reach
2. Greater customization
3. Reduced barriers to entry
4. The end of scale
5. Easier entry into adjacent markets
6. Greater specialization
7. Greater innovation and experimentation
8. Greater information transparency
9. Greater organizational complexity
10. Faster turnaround times and greater speed to market
11. Greater competitive intensity and disruption of existing markets
12. A shift from marketing push to customer pull (p.34)
Briefly, scale "is no longer an integral pillar of the new economy" (p.38). People's contributions will become more narrow and specialized across a range of markets, since greater connectivity means finding more precise fits rather than turning the employees in one's proximity into generalists; employees will no longer be units of one, but "fractions," hired for specific tasks (p.39). "Companies no longer pay for employees; they pay for solutions, essentially fractionalizing the employee into ever smaller and more productive slices of labor by enabling co-location in a virtual way through technology" (p.40). And "relationships come together based on a particular product or project and then disband at the end" (p.40). (Longtime readers of this blog will recognize this theme, which runs through my second book and my investigations of freelancers and coworking.)

At the same time, the roundtable anticipates scalable learning across the organization (p.42) and greater organizational complexity (p.44). In this environment, "the real impact of cloud computing may be this: in the future, everyone becomes an entrepreneur" (p.71).

The report concludes with a lengthy list of U.S. policy proposals, including formulating an identity agenda, modernizing the national energy grid, and deploying world-class broadband (pp.73-74).

All in all, this report seems like a strong summary of the issues facing identity in the future. I'm not sure I was really surprised by any of the report, but these threads were brought together well and succinctly, and in language that is easily absorbed. I'd recommend this report to C-level execs and academic departments.


Nalneesh said...

Please can you post a link to your report?

Clay Spinuzzi said...

The link is at the top of the blog post. Just click on the title.