Should you be scared of our evil cloud overlords?

I must admit that until Matt Jacobson of Facebook stopped by my workplace for a marketing session yesterday and spent significant time debunking peoples concerns about storing their stuff online, I’d mostly focused on the corporate, legal, and commercial issues and not concerned myself too much with the fact that the majority of my personal data is living a good and active life online.

Maybe it’s because I’m a child of the Microsoft hegemony, and used to the fact that in order for all of us to benefit from a technology, somebody has to define the ground that the rest of us builds upon. Sure, that kind of power almost begs for them to overstep, misuse it at times, and reap as many commercial benefits as they can in the process, but ultimately they’re accountable to all of us and – as happened with Linux and ten years of MS court-cases – the world will find away around it when they overplay their hand.

For Facebook, Google+, Flickr, LinkedIn, Apple, Amazon, and all the others vying for a piece of our personal and social data pie, and no matter what Matt says, it’s therefore necessary to balance value against exploitation. If companies want to stay in the game, they have to provide you value higher than the downside of allowing them to give commercial stakeholders access to, not only your personal data and family pictures, but also to behavioural and social data that will ultimately give them more awareness of who you are, and what you are likely to do, than you probably know yourself.

What most of the more agressively expansionist players online – sorry for not calling them benign idealists – have realized is of course that, unlike traditional business models, in online business the consumer is the product, companies are the consumers, and volume the currency. So when you see them actively trying to minimize their commercial benefits, it’s not because they believe in a rosy future of technology-driven freedom for all. It’s simply to drive more users, more data, and more volume.

When Google therefore provides services for free, open up their software for developers, sets advertising costs at market standard even though they provide much more value per dollar, and says they’ll “do no evil”; When Facebook launches the Open Compute project, gives developers free access to their APIs, and provides a world-class service free of charge or in-your-face advertising; and when any company that wants to be something online is providing services, software, and even content for free, it’s not because their blind idealists, but because the race is on to take over where Microsoft left off and become a part of the next big OS in the cloud where power is not in the code you maintain but in the data you hold.

More traditionalist companies like Apple, Amazon, and Barnes & Noble, are stuck struggling to make old-fashioned business models – that require content-control all the way down to the device in your pocket and charging a percentage all the way – work in the cloud, while cloud companies like Google lean back and simply utilize their user and data volume to build the same services virtually for free once a standard has been fleshed out.

This is why Apple for all intends and purposes invented the modern Smartphone, Amazon invented one-click buying, and both of them spent years grinding out the details of how to legally distribute content online, while Google just leaned back, waited until they were done, and then threw Android, Google Wallet, Google Music, and free books into the mix. It’s not because Google is a slow copycat that don’t want to make money, they’re just in a data-volume business where they can make money with a fraction of the risk and effort, and Facebook is positioning itself to be able to do exactly the same.

So you shouldn’t be too concerned about sharing your life with the Facebooks, LinkedIns, and Googles of the world. Trust me, they are very aware that having your trust, getting you to use their services and giving them access to your personal data-stream is the cornerstone of their business, so they’ll do anything in their power not to jeopardize that relationship.

This isn’t to say that there wont be cases of misuse, oversteps of privacy, commercial exploitation, and all the other nasty words that the last century has made us grown-ups allergic to. But as the young people of today – who are gladly moving their entire lives to the cloud without a concern in the world – are showing us, it’s really not a question of exploitation, but of a new type of business in which the consumers may not pay or have direct control over their data, but where the market mechanisms are already in place to ensure that any company overstepping your boundaries will see the impact on their bottom line.

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Update

With the release of Facebook timeline and the privacy controversy, here’s a few more links you might be interested in: