cloud computing | Paul Wallbank - Communications Professional

Apple and the argument for hybrid cloud computing

The argument between cloud computing purists and hybrid advocates continues with both sides suffering setbacks

There’s two different philosophies about cloud computing, hybrid and ‘pure’. In recent days the hybrid school hasn’t been doing so well, but the matter isn’t settled yet.

Pure cloud computing means doing everything in the cloud with all your software running over the net with the data stored on other people’s computers and everything is accessed through web browsers.

Hybrid cloud is where some of the work is done on your computer or smartphone with data often being synchronised between the device and the cloud storage.

Most smartphone and tablet computer apps do this and increasingly software like Microsoft Office and Apple iLife have a hybrid cloud computing angle.

Apple’s hybrid cloud service, iCloud, promised Apple users the ability to work on any device – laptop, desktop, tablet or smart phone – with the synchronised with central servers. Every Apple product you own can then access your iCloud data.

Recently though stories in the The Verge and Ars Technica report how Apple’s developers and customers are becoming steadily irritated by the lousy reliability of the company’s iCloud service.

Incumbent software and hardware vendors like Microsoft and Apple are pushing the hybrid idea for a good reason, it allows them to maintain their existing PC and laptop based products while being able to offer cloud services like their competitors.

For Microsoft and Apple, along with companies like Oracle, Dell and MYOB, the hybrid cloud gives them an opportunity to wriggle out of what Clay Christensen called The Innovator’s Dilemma.

Customers actually like the hybrid cloud as many distrust ‘pure’ cloud offerings as they don’t trust the providers or their internet connections. Basically they like to have a copy of their data stored in house.

The problem with the hybrid cloud is that it’s complex as Xero’s founder Rod Drury, one of the ‘pure cloud’ evangelists, said at his company’s conference last year, “hybrid technologies are cumbersome and add far more complexity into software. Cloud technologies are the right technologies.”

Complexity is what’s bought Apple’s iCloud unstuck as even some of best developers struggle with getting their programs to work with it.

All is not well for the ‘pure cloud’ evangelists either, as the shutting down of Google Reader has shaken many technologists and made them question whether the cloud is as safe as they would like.

Added to this uncertainty about the cloud is lousy service by providers, arbitrary shutting down of user accounts and the corporate boycott of Wikileaks – all of which have forced people to reconsider the wisdom of saving all their data or running applications in the cloud.

So the debate between the cloud purists is by no means over and it may well be that some form of hybrid, even just for local backup to your own computer, may turn out to be the common way we use cloud services.

What is for sure though is cloud software is biting deeply into the revenues of established software companies as people find the attractions of running programs and storing data on other people’s computers outweighs the risks.

Like all relatively new concepts it’s going to take a while for us to figure out how to use cloud computing most effectively in our business. The first step is how we manage the risks.

Democratising customer service

How a cloud computing service wants to radically change customer service and business

“Nobody got girls on the helpdesk” says Mikkel Svane, founder of online customer service company Zendesk.

Mikkel hopes to make customer service sexy again as businesses find they have to focus on keeping clients happy.

This is a reversal of management thinking of the 1980s where, as Mikkel says, “customer service is a cost centre, outsource it, don’t spend any time on it and don’t let customers steal any of your time.”

Now the internet gives customers to tell the world about a company’s service, the days of outsourcing or disregarding support are over.

Mikkel Svane and Michael Hansen of Zendesk

Cloud technologies are changing how software is used in business, as Mikkel found when he and his partners started Zendesk.

It became very obvious that building something that was easy to adopt, web based and integrated with email, websites. Something easy to use that didn’t clutter the customer service experience.

Something that moved from managing the customer service experience to focusing on customer service.

We built it, put it out there and customers starting coming.

A lot of these companies thought they could never implement a customer service platform. Suddenly small companies found they could compete with bigger competitors.

The appeal to investors

Having customers signing up proved to be a big advantage in Silicon Valley, no-one knew anything about a Danish company, but with local customers starting coming on board US Venture Capital firms understood what the company does.

That customer base proved powerful as Zendesk has to date raised $84 million dollars over four rounds of VC funding and is looking at a stock market float with an IPO in the next few years.

“Silicon Valley has a great tradition of building businesses.” Says Mikkel, “coming to Silicon Valley was such a big step for Zendesk, in taking it from being some little startup to being a real company that could scale very quickly.”

A question of scale

Groupon is a good example, when Mikkel and his team first met the Groupon team the group buying service was a team of four guys in Detroit. Groupon founder Andrew Mason personally signed off on the initial Zendesk subscription.

“What the hell is this company, we don’t get it.” Mikkel said at the time.

Three years later Groupon was the fastest growing company in history with thousands of support agents on their systems supporting hundreds of thousands of products.

Despite Groupon’s recent problems, Svane is proud of how Zendesk helped the group buying service with growth that no business had seen before.

“With Zendesk they got not only a beautiful, elegant system they also got the scale and the trajectory. Imagine if they’d tried to do that with an Oracle database? You’d have never been able to grow so quickly.”

On being a good internet citizen

In the past we talked about platforms – the Oracle platform, the Microsoft plaftorm – today the Internet is the platform.

“We are a good citizen on the Internet platform,” says Mikkel. “Shopify is a good citizen of the internet platform, these type of tools are easy to integrate. We are all good citizens of the Internet platform.”

Having these open system is the great power of the cloud services, they way they integrate and work together adds value to customers and doesn’t lock them into one company’s way of doing things.

The threat to incumbents

Vendor lock in has been a curse for businesses buying software. The fortunes of companies like Oracle, Microsoft and IBM have been built holding customers captive as the costs of moving to a competitor were too great.

Cloud services like Zendesk, Shopify and Xero turn this business model around which is one of the attractions to customers and it’s why huge amounts of money are moving from legacy solutions to cloud based services.

Another reason for the drift to cloud services is the reduction in complexity, the incumbent software vendors made money from the training and consulting services required to use their products.

Having simple, intuitive systems makes it easier for companies to adopt and use the new breed of cloud services.

Focusing on the business

Mikkel’s aim is to help businesses focus on their customers and products rather than worry about IT and infrastructure. In the long term it’s about helping organisations establish long term relations with their clients.

“Companies today realise that it doesn’t matter how much it matters how much I can sell to you right now, it pales into in comparison of how much I can sell you over the lifetime of our relationship. This ties into the subscription economy. It’s much more important for companies to nurture the long term lifetime relationship.”

Having a long term relationship with customers is going to be one of the keys for business success in today’s economy.

The days of transaction based businesses making easy profits from skimming a few percent off each sale are over and companies have to work on building long term relationship with customers.

Services like Zendesk, Xero and Salesforce are those helping new, fast growth companies grab these opportunities. For incumbent businesses, it’s not a time to be assuming markets are safe.

Retail and the internet of machines

Paypal and eBay are using the Internet of machines to put service station cashiers out of work.

Online retail and payment giants Ebay and PayPal hosted a media lunch in Sydney yesterday to publicise their Australian Business Update.

While eBay dominates the online selling market, PayPal’s position in the payment market place is extremely powerful with Internet monitoring company Comscore reporting in their Digital Wallet Roadmap how PayPal dominates the US market and does likewise in other markets like Australia.

Their update confirms the trends which have been obvious for some time, particularly in how mobile devices are now driving retail. eBay’s research indicates properly implemented multichannel strategies drives six times more sales than just having an online presence.

What was particularly notable with eBay’s presentation was how the Internet of Machines is changing the retail and logistics industries as smartphones and connected point of sales systems are cutting out jobs and middle men.

Paypal are particularly proud of their US partnership with cash register manufacturer NCR that integrates smartphone payments with the point of sales systems in restaurants, convenience stores and gas stations.

eBay illustrated this with their examples of coupon offers being tied to smartphone payment systems so people paying for gas with their smartphone get a voucher offer for various up sells.

Studies in the US have found a $10 offer can result in sales of up to $100. A pretty compelling deal for most merchants.

With these technologies, we’re seeing how connected machines are changing even the most mundane business tasks.

It may well be that the days of the service station cashier are numbered; it’s quite possible that in one generation we’ll have gone from full staffed gas stations to totally automated facilities.

The example of gas station attendants and cashiers is just one example of how automation is changing many retail and sales tasks. It would be a brave person to say their job isn’t safe.

Was telecommuting another broken technology promise?

Is telecommuting another broken technology promise?

Telecommuting promised, or still promises, to free caged office workers from their cubicles, relieve the sardine-tin conditions on our peak hour trains and reduce traffic congestion on clogged roads. But has that promise been lost like so many other predictions of the technology age?

Banning remote workers is the latest edict from Marissa Meyer as she continues her daunting task of turning around Yahoo!.

Meyer’s move follows Google’s Chief Financial Officer Patrick Pichette claiming telecommuting is counterproductive and discouraged at his company.

One of the great promises of the computer age – almost up there with the paperless office – is the ability to work from home as if you were sitting in an office.

So promising is telecommuting it’s one of the main selling points for Australia’s National Broadband Network.

Having two of Silicon Valley’s biggest companies come out against remote working, particularly Google with its reputation for innovation and creativity, seems to damn the practice.

This isn’t helped by Australia’s nanny state deciding that companies are liable for remote workers who manage to fall over in their own home – twice.

Risk is the real barrier to adopting telecommuting, the risk of a compensation claim for a remote working employee falling over while rummaging in their kitchen fridge is one aspect but a more a bigger risk in the mind of a bureaucrat is that a subordinate is not under their control.

Control is almost certainly what focuses Pichette’s mind. While Google is portrayed as a company full of original thinking, non-conformist geeks in reality only half the staff, at best, fit the stereotype while the rest are the same corporate bureaucrats you’ll find at an insurance company or a quantity surveyor’s office.

In the case of Yahoo! a decade of mismanagement has left the company unsure of who exactly works for them, Meyer’s solution is to order everyone into the office so she can count heads.

The fact that some Yahoo! staff will quit, others won’t be able to get to an office and some will turn out to have been long dead (with relatives gleefully cashing Yahoo!’s cheques) is a bonus for Meyer as she looks at reducing staff costs.

In reality remote working is growing, partly because so much of the white collar workforce has been contracted out and few freelancers are interested in hanging around clients’ offices if they can avoid it.

A bigger factor is that workplaces themselves are changing as fewer organisations need to have huge office blocks. While the cubicles themselves might not go away, they are going to be clustered where the customers and workforces are rather than locked away in modern ivory towers.

That has some major consequences for our workforces and cities which the bureaucrats – both in the private and public sectors – have barely started to get their heads around.

Photo of commuters at Liverpool Street Station courtesy of Genkaku aka James Farmer through SXC.hu

Pennies for Apps – how Apple and Google dominate online income

Apple and Google dominate our online revenues while the creators of content fight over pennies. Is this a passing phase?

“App Store tops 40 billion downloads” trumpets Apple in a media release curiously timed to coincide with the opening of the Consumer Electronics Show.

While impressive, those figures aren’t great for developers. As writer Ed Bott points out they are getting 17.5 cents per download.

Making things worse, that return is trending downwards. Tech site Giga Om put the return at 20 cents a year earlier.

Giga Om also points out App Store returns are skewed towards the big successful game apps, meaning the majority of app developers are scratching for pennies.

This phenomenon is also happening with online advertising as Google Adsense partners find their income dwindling for pay for click adverts.

On top of declining revenues, there’s the cut that Google and Apple take. In the App Store, Apple’s take is 30% while Google pocket over 50% of Adsense revenue.

Working for pennies has become the norm for for creators like musicians, writers and app developers in the digital economy. The long tail is fine, but it barely pays the bills for all but a few outliers. Everyone else needs a day job.

In some respects this isn’t new – writers, poets, musicians and painters have generally starved in their garrets throughout history – but the Twentieth Century model of intellectual property, record labels and broadcast empires offered at least a decent living to many.

Right now the 21st Century model seems to be that creators can go back to starving, while the big four online conglomerates make the profits previously shared around by the movie studios, record labels and book publishers.

Maybe though the rivers of gold which are making Apple and Google’s managers rich may turn out to be just as vulnerable as those of the newspapers they’ve displaced.

It may well be that the current dominance of the App Store and Adsense are a transition effect as we move to other business models. It’s difficult to see right now, but we can’t rule it out.

Was the netbook the Trabant or Model T of the computer world?

After only five years the netbook computer comes to an end having being killed by tablet computers and vendor hostility. We will remember these systems as the Model T or Trabant of the PC world?

Taiwanese technology website Digitimes reports Asustek have shipped their last eeePC netbooks, bringing to an end a product that promised to change the computing world when they were first released in 2007.

At the time the eeePC netbook picked up on a number of trends – cheap hardware, the maturity of the open source Linux operating system, affordable wireless access and, most importantly, the accessibility of cloud computing services.

There’d been a pent up demand for usable portable computers for years but Microsoft and their hardware partners consistently released clunky, overpriced tablet computers that simply didn’t deliver on their promises.

For users wanting a cheap, fairly robust portable computer then netbooks were a good choice, at the price you could even risk having one eaten by lions.

Unfortunately for netbook a few things went against the idea.

Customers don’t like Linux

An early blow to the eeePC was that retail users don’t like Linux. Most computer users are happy with Windows and MacOS and weaning them off what they know is a very hard sell.

Sadly on this topic I have first hand knowledge having suffered the pain of co-founding a business in the mid 2000s that tried to sell Linux to small businesses.

Asustek discovered this when they found customers preferred the more expensive Windows XP version over the original Linux equipped devices.

Unfortunately Microsoft’s licenses damaged the economics of the netbook and held the manufacturers hostage to Microsoft who, at the time, wasn’t particularly inclined to encourage customers to use cloud services.

Manufacturer resistance

Microsoft weren’t the only supplier unhappy with netbooks. Harry McCracken at Time Tech describes how chip supplier Intel worked against the products.

For manufacturers, the netbooks were bad news as they crushed margins in an industry already struggling with tiny profits. However all of them couldn’t ignore the sales volumes and released their own netbooks which cannabilised their own low end laptop and desktop ranges.

In turn this irritated the army of PC resellers who found their commissions and margins were falling due to the lower ticket prices of netbooks.

The rise of the tablet

The one computer manufacturer who stayed aloof from the rush into low margin netbooks was Apple who had no reason to rush down the commodity computing rabbit hole. It was Steve Jobs who launched the product that made netbooks irrelevant.

“Netbooks aren’t better at anything… they are just cheaper, they are just cheap laptops” Jobs said at the iPad launch in January 2010.

Immediately the iPad redefined the computer market; those who’d been waiting a decade for a decent tablet computer scooped the devices up.

Executives who wouldn’t have dreamt of replacing their Blackberries with an iPhone, let alone using an Apple computer proudly showed off their shiny iPads.

The arrival of the iPad in boardrooms and executive suites also had the side effect of kick starting the Bring Your Own Device movement as CIOs and IT managers found that their policy of Just Say No was a career limiting move when the Managing Director wanted to connect her iPad to the corporate network.

Rebuilding PC margins

Around the time of the iPad’s released the major PC manufacturers declared a detente over netbooks and joined Intel in developing the Ultrabook specification.

The aim of the Ultrabook was to de-commodify the PC laptop market by offering higher quality machines with better margins.

While the Ultrabook has worked to a point, competition from tablet computers and the demands of consumers who’ve been trained to look for sub $500 portables means the more expensive systems are gradually coming down to the netbook’s price points.

Today’s Ultrabook will be next month’s netbook.

For the PC manufacturers, the lesson is that computers have been a commodity item for nearly a decade and only savvy marketing and product development – both of which have been Apple’s strengths – is the only way for long term success in the marketplace.

Those US based manufacturers who haven’t figured this out are only go to find that Chinese manufacturers – led by companies like Taiwan’s Asustek – will increasingly take the bottom end of the market from them.

The car industry is a good comparison to personal computers in commoditisation – with the passing of the netbook, the question is whether we’ll remember the eeePC as a Trabant, Model T Ford or a Volkswagen Beatle.

Social media is not your friend

The terms and conditions of social media services show that these companies are not really your friends.

This article is nearly 5,000 worlds long, if you want the too long; didn’t read (tl;dr) verison then previous posts You Hold Us Harmless, Other People’s Platforms and Paying the Piper cover the issues discussed in this dissection of Instagram’s terms and conditions.

Photo sharing app Instagram’s changes to their terms of service has shown that many people don’t understand the terms of social media and other online services.

The terms and conditions of these companies’ services are very draconian in the license conditions for users’ posts and the risks users face if something goes wrong.

Under these terms, social media companies can sue you if you they are sued over something you post, similarly they claim to have the rights to anything you post to their services.

Almost every service has similar terms with Instagram’s being a good example of just how onerous and unfair social media services’ these contracts are towards users. This unfairness starts with the preamble.

The contract preamble

By accessing or using the Instagram website, the Instagram service, or any applications (including mobile applications) made available by Instagram (together, the “Service”), however accessed, you agree to be bound by these terms of use (“Terms of Use”). The Service is owned or controlled by Instagram, LLC (“Instagram”). These Terms of Use affect your legal rights and obligations. If you do not agree to be bound by all of these Terms of Use, do not access or use the Service.

This is the web equivalent of the ‘shrink wrap’ clauses of the boxed software world – by opening the box, or using the service, you agree to the terms regardless of how stupid, unfair or counter-intuitive they are.

There may be times when we offer a special feature that has its own terms and conditions that apply in addition to these Terms of Use. In those cases, the terms specific to the special feature control to the extent there is a conflict with these Terms of Use.

Because the services are complex, management might create a whole new set of terms to cover problem areas. Again, it’s put on the user to understand and know when ‘special features’ have specific terms that over-ride the standard conditions.

ARBITRATION NOTICE: EXCEPT IF YOU OPT-OUT AND EXCEPT FOR CERTAIN TYPES OF DISPUTES DESCRIBED IN THE ARBITRATION SECTION BELOW, YOU AGREE THAT DISPUTES BETWEEN YOU AND INSTAGRAM WILL BE RESOLVED BY BINDING, INDIVIDUAL ARBITRATION AND YOU WAIVE YOUR RIGHT TO PARTICIPATE IN A CLASS ACTION LAWSUIT OR CLASS-WIDE ARBITRATION.

As an example of how unfair these contracts are, then this clause is probably the best. If you drill down into the arbitration processes described at the end of the term, you find this can be subverted which is probably necessary as the clause on its own is probably unenforceable.

Basic Terms

Instagram’s basic terms are pretty well identical to almost every social media service. While the layout and some of the wording may be different, the conditions placed on users are standard.

At the very end of this section is the clause that allows Instagram to suspend any account for any reason. While this is standard across social media and cloud computing services it gives great power to Instragram’s management and is something that all internet users need to be aware of.

1. You must be at least 13 years old to use the Service.

This clause is standard to all US based online services. This is not because of some altruistic concern about children, its to comply with the Children’s Online Privacy Protection Act (COPPA).

Interestingly the US Federal Trade Administration is extending COPPA to smartphone apps which will mess with some of the more unethical behaviour in that sector.

2. You may not post violent, nude, partially nude, discriminatory, unlawful, infringing, hateful, pornographic or sexually suggestive photos or other content via the Service.

This clause is a cop-out which, by its wide definition, can catch almost any behaviour depending who is making the value judgement. Most famously the equivalent clause in Facebook’s terms has underpinned that company’s War On Nipples.

A notable aspect of this clause are the two words “other content” – what ‘other content’ is that? Well, it could be anything and it opens the opportunity for Instagram to shut down any user if they want to. The online blockade of Wikileaks is an example of how these nebulous words can be used.

3. You are responsible for any activity that occurs through your account and you agree you will not sell, transfer, license or assign your account, followers, username, or any account rights. With the exception of people or businesses that are expressly authorized to create accounts on behalf of their employers or clients, Instagram prohibits the creation of and you agree that you will not create an account for anyone other than yourself. You also represent that all information you provide or provided to Instagram upon registration and at all other times will be true, accurate, current and complete and you agree to update your information as necessary to maintain its truth and accuracy.

The currency in trade for social media services is the information about their users – so it’s necessary they know when you change jobs, get married or move to a new city. Naturally there isn’t a corresponding obligation on Instagram to inform users of service changes.

For social media experts and consultants this clause shows why its important to get a release from clients before setting up accounts on their behalf. Similar clauses apply to almost every service with Facebook being particularly touchy about who can and can’t set up company pages.

The ignorance of social media experts of the terms and conditions in the services they advise clients on is breathtaking and much of the mis-informed commentary over Instagram’s changes.

4. You agree that you will not solicit, collect or use the login credentials of other Instagram users.

A perfectly fair clause to protect users’ login details. This is a standard Acceptable Usage Policy on most corporate networks and online services.

5. You are responsible for keeping your password secret and secure.

This clause is also fair. It’s your responsibility to keep your details safe. It is interesting though that Instagram don’t assume any responsibility for protecting users’ details.

6. You must not defame, stalk, bully, abuse, harass, threaten, impersonate or intimidate people or entities and you must not post private or confidential information via the Service, including, without limitation, your or any other person’s credit card information, social security or alternate national identity numbers, non-public phone numbers or non-public email addresses.

Most social media users overlook this clause and many skirt with problems. Were Facebook – which has similar rules – and other services to properly enforce this rule against ill mannered users, much of the debate on Internet bullying would settled.

7. You may not use the Service for any illegal or unauthorized purpose. You agree to comply with all laws, rules and regulations (for example, federal, state, local and provincial) applicable to your use of the Service and your Content (defined below), including but not limited to, copyright laws.

Covering Your Ass (CYA) is a key management performance indicator and the primary concern of any corporate attorney. This clause covers the backsides of Instagram and Facebook’s management against illegal behaviour by their customers.

Whether these terms are enough to deflect responsibility away from the social media services for information that’s uploading is a topic that’s maintaining the lifestyles of a large number of lawyers and will continue to for the foreseeable future.

8. You are solely responsible for your conduct and any data, text, files, information, usernames, images, graphics, photos, profiles, audio and video clips, sounds, musical works, works of authorship, applications, links and other content or materials (collectively, “Content”) that you submit, post or display on or via the Service.

This clause is the classic desperate CYA term to push responsibility for copyright infringement, obscenities or other legal complications onto users.

9. You must not change, modify, adapt or alter the Service or change, modify or alter another website so as to falsely imply that it is associated with the Service or Instagram.

Another fair clause to avoid spoofing or ‘man in the middle’ attempts to steal passwords. Sadly the bad guys don’t care about stinkin’ terms and conditions.

10. You must not access Instagram’s private API by means other than those permitted by Instagram. Use of Instagram’s API is subject to a separate set of terms available here: http://instagram.com/about/legal/terms/api/ (“API Terms”).

For social media services the Application Program Interface (API) is an essential factor in a platform’s success. Allowing others to plug into feeds and data has been one of the ingredients of Twitter’s success.

Given the importance of APIs, it’s no surprise services want to control access. How Facebook and Instagram balance the users’ demands to share with the need to control data will be one of their great management challenges.

11. You must not create or submit unwanted email, comments, likes or other forms of commercial or harassing communications (a/k/a “spam”) to any Instagram users.

No spamming. This is good.

12. You must not use domain names or web URLs in your username without prior written consent from Instagram.

This term is a funny little one aimed at controlling spammers and marketers. Fair enough although it will irritate some business users.

13. You must not interfere or disrupt the Service or servers or networks connected to the Service, including by transmitting any worms, viruses, spyware, malware or any other code of a destructive or disruptive nature. You may not inject content or code or otherwise alter or interfere with the way any Instagram page is rendered or displayed in a user’s browser or device.

At first reading this clause is fair, although the bad guys don’t care. Restricting how an Instagram page is displayed or rendered on a user’s device though may cause problems with some equipment. We’ll see how that pans out.

14. You must comply with Instagram’s Community Guidelines, available here: http://help.instagram.com/customer/portal/articles/262387-community-guidelines.

Instagram’s community guidelines are worth a post in themselves although the terms and conditions cover the much of what users can and can’t do.

15. You must not create accounts with the Service through unauthorized means, including but not limited to, by using an automated device, script, bot, spider, crawler or scraper.

No scraping. Which again is fair enough although those who steal content from other sites don’t care about terms and conditions.

16. You must not attempt to restrict another user from using or enjoying the Service and you must not encourage or facilitate violations of these Terms of Use or any other Instagram terms.

Another standard clause with little to object to.

17. Violation of these Terms of Use may, in Instagram’s sole discretion, result in termination of your Instagram account. You understand and agree that Instagram cannot and will not be responsible for the Content posted on the Service and you use the Service at your own risk. If you violate the letter or spirit of these Terms of Use, or otherwise create risk or possible legal exposure for Instagram, we can stop providing all or part of the Service to you.

This last clause is really important as it allows Instagram to terminate accounts at their ‘sole discretion’. This is a standard clause in every cloud computing, social media and online service.

In the past this has meant people whose names Google doesn’t like have had their accounts suspended while dozens of online traders have found their accounts suspended. A Norwegian woman even found she lost her entire ebook collection when Amazon closed her account without notice.

As online services can shut you down without notice or cause, its important not to rely on these providers or invest too much into their products. This is a a serious threat to many businesses who depend on these services as well as a weakness in the social media business model.

General Conditions

Instagram’s general conditions are where the real legal meat is and where many commentators have overlooked the risks in using these services.

The general conditions start with a re-iteration of the previous term

1. We reserve the right to modify or terminate the Service or your access to the Service for any reason, without notice, at any time, and without liability to you. You can deactivate your Instagram account by logging into the Service and completing the form available here: https://instagram.com/accounts/remove/request/. If we terminate your access to the Service or you use the form detailed above to deactivate your account, your photos, comments, likes, friendships, and all other data will no longer be accessible through your account (e.g., users will not be able to navigate to your username and view your photos), but those materials and data may persist and appear within the Service (e.g., if your Content has been reshared by others).

Again, we reserve the right to shut you down without notice or liability. The first you will know of a problem is when the service stops working and all your pictures and other information is lost.

That some things, particularly shared photos, may persist on the service after an account is closed down is a consequence of the social features of these sites. Facebook, Twitter and others make the same point in their conditions.

2. Upon termination, all licenses and other rights granted to you in these Terms of Use will immediately cease.

If we decide to can your account you lose your rights, not that you had any though.

3. We reserve the right, in our sole discretion, to change these Terms of Use (“Updated Terms”) from time to time. Unless we make a change for legal or administrative reasons, we will provide reasonable advance notice before the Updated Terms become effective. You agree that we may notify you of the Updated Terms by posting them on the Service, and that your use of the Service after the effective date of the Updated Terms (or engaging in such other conduct as we may reasonably specify) constitutes your agreement to the Updated Terms. Therefore, you should review these Terms of Use and any Updated Terms before using the Service. The Updated Terms will be effective as of the time of posting, or such later date as may be specified in the Updated Terms, and will apply to your use of the Service from that point forward. These Terms of Use will govern any disputes arising before the effective date of the Updated Terms.

As previously pointed out, while users are required to inform Instagram of changes to their account details; the service is under no obligation to inform you when they change conditions.

This is common to all online services and is a hangover from the boxed software days when vendors like Microsoft and Adobe claimed the right to change the terms of contract unilaterally.

4. We reserve the right to refuse access to the Service to anyone for any reason at any time.

Just in case you were in any doubt, Instagram can turn of your account whenever they feel like it.

5. We reserve the right to force forfeiture of any username for any reason.

This clause is important as social media sites have shown themselves to be quick to pander to the whims of governments, large corporations or celebrities. If someone more powerful than you decides they have right to your screen name, Instagram will give it to them just as other service will.

6. We may, but have no obligation to, remove, edit, block, and/or monitor Content or accounts containing Content that we determine in our sole discretion violates these Terms of Use.

Again this clause just re-iterates what’s already been stated. The notable part of this clause is Instagram deny that they are obligated to remove offensive content or anything that breaches their terms.

Every other online service has a similar clause and it illustrates the inherent unfairness in these contracts in that users are liable, but the service accepts no responsibility for anything it does or doesn’t do.

7. You are solely responsible for your interaction with other users of the Service, whether online or offline. You agree that Instagram is not responsible or liable for the conduct of any user. Instagram reserves the right, but has no obligation, to monitor or become involved in disputes between you and other users. Exercise common sense and your best judgment when interacting with others, including when you submit or post Content or any personal or other information.

Users are responsible but the service is not. Instagram’s management might decide to become involved in vicious online disputes or cyberbullying, but then again they may not.

8. There may be links from the Service, or from communications you receive from the Service, to third-party web sites or features. There may also be links to third-party web sites or features in images or comments within the Service. The Service also includes third-party content that we do not control, maintain or endorse. Functionality on the Service may also permit interactions between the Service and a third-party web site or feature, including applications that connect the Service or your profile on the Service with a third-party web site or feature. For example, the Service may include a feature that enables you to share Content from the Service or your Content with a third party, which may be publicly posted on that third party’s service or application. Using this functionality typically requires you to login to your account on the third-party service and you do so at your own risk. Instagram does not control any of these third-party web services or any of their content. You expressly acknowledge and agree that Instagram is in no way responsible or liable for any such third-party services or features. YOUR CORRESPONDENCE AND BUSINESS DEALINGS WITH THIRD PARTIES FOUND THROUGH THE SERVICE ARE SOLELY BETWEEN YOU AND THE THIRD PARTY. You may choose, at your sole and absolute discretion and risk, to use applications that connect the Service or your profile on the Service with a third-party service (each, an “Application”) and such Application may interact with, connect to or gather and/or pull information from and to your Service profile. By using such Applications, you acknowledge and agree to the following: (i) if you use an Application to share information, you are consenting to information about your profile on the Service being shared; (ii) your use of an Application may cause personally identifying information to be publicly disclosed and/or associated with you, even if Instagram has not itself provided such information; and (iii) your use of an Application is at your own option and risk, and you will hold the Instagram Parties (defined below) harmless for activity related to the Application.

This is where the complexity of APIs comes into play, if the user grants access to a third party application that trashes their reputation of account then there are risks to the service and the individual. Once again the terms push all the responsibility onto the user.

While this is fair enough should a user install an app, irritatingly Instagram doesn’t accept responsibility for services they might recommend. Again, you are responsible and they are not.

9. You agree that you are responsible for all data charges you incur through use of the Service.

It’s hard to hold Instagram responsible for ISP or telco charges although many users would have no idea of the costs or risks of using the service on certain data plans.

10. We prohibit crawling, scraping, caching or otherwise accessing any content on the Service via automated means, including but not limited to, user profiles and photos (except as may be the result of standard search engine protocols or technologies used by a search engine with Instagram’s express consent).

Another clause that re-iterates what we already know with a little twist about search engines needing Instagram’s consent.

Rights

The least understood part of social media are usage and intellectual property rights. This area has caused the most outrage and generated the most misinformation.

1. Instagram does not claim ownership of any Content that you post on or through the Service. Instead, you hereby grant to Instagram a non-exclusive, fully paid and royalty-free, transferable, sub-licensable, worldwide license to use the Content that you post on or through the Service, subject to the Service’s Privacy Policy, available here http://instagram.com/legal/privacy/, including but not limited to sections 3 (“Sharing of Your Information”), 4 (“How We Store Your Information”), and 5 (“Your Choices About Your Information”). You can choose who can view your Content and activities, including your photos, as described in the Privacy Policy.

Who owns your pictures and other creatives works is the most contentious issue in social media. The key in this clause is the following;

you hereby grant to Instagram a non-exclusive, fully paid and royalty-free, transferable, sub-licensable, worldwide license to use the Content that you post on or through the Service

It has to be understood that, regardless of what Instagram’s management say to the contrary, they have the right to sell your photos and anything else you choose to post to the service.

This clause is not unique to Instagram and should be kept in mind whenever you post baby pictures, wedding photos or the eulogy to your grandma online, not to mention your company’s logo or other creative works.

2. Some of the Service is supported by advertising revenue and may display advertisements and promotions, and you hereby agree that Instagram may place such advertising and promotions on the Service or on, about, or in conjunction with your Content. The manner, mode and extent of such advertising and promotions are subject to change without specific notice to you.

While Instagram’s management have publicly backed down on the original advertising changes that upset their users, this clause leaves the door open to reintroducing those adverts without notice.

3. You acknowledge that we may not always identify paid services, sponsored content, or commercial communications as such.

Again this is not a step back from the original changes that upset users. How Instagram manage to inject unidentified adverts into users’ feeds without compromising the service will be worth watching.

4. You represent and warrant that: (i) you own the Content posted by you on or through the Service or otherwise have the right to grant the rights and licenses set forth in these Terms of Use; (ii) the posting and use of your Content on or through the Service does not violate, misappropriate or infringe on the rights of any third party, including, without limitation, privacy rights, publicity rights, copyrights, trademark and/or other intellectual property rights; (iii) you agree to pay for all royalties, fees, and any other monies owed by reason of Content you post on or through the Service; and (iv) you have the legal right and capacity to enter into these Terms of Use in your jurisdiction.

This clause is the most pernicious in social media circles – it means that if Instagram is sued for something you posted then you are responsible for all their costs.

In many ways this clause is social media’s doomsday machine; the first service that tries to claim costs against a user will bring the whole social media business model down as subscribers stop posting content.

5. The Service contains content owned or licensed by Instagram (“Instagram Content”). Instagram Content is protected by copyright, trademark, patent, trade secret and other laws, and, as between you and Instagram, Instagram owns and retains all rights in the Instagram Content and the Service. You will not remove, alter or conceal any copyright, trademark, service mark or other proprietary rights notices incorporated in or accompanying the Instagram Content and you will not reproduce, modify, adapt, prepare derivative works based on, perform, display, publish, distribute, transmit, broadcast, sell, license or otherwise exploit the Instagram Content.

What’s ours is ours, and what’s yours is ours too. The standard business model of social media.

6. The Instagram name and logo are trademarks of Instagram, and may not be copied, imitated or used, in whole or in part, without the prior written permission of Instagram, except in accordance with our brand guidelines, available here: http://help.instagram.com/customer/portal/articles/182487. In addition, all page headers, custom graphics, button icons and scripts are service marks, trademarks and/or trade dress of Instagram, and may not be copied, imitated or used, in whole or in part, without prior written permission from Instagram.

Ditto above.

7. Although it is Instagram’s intention for the Service to be available as much as possible, there will be occasions when the Service may be interrupted, including, without limitation, for scheduled maintenance or upgrades, for emergency repairs, or due to failure of telecommunications links and/or equipment. Also, Instagram reserves the right to remove any Content from the Service for any reason, without prior notice. Content removed from the Service may continue to be stored by Instagram, including, without limitation, in order to comply with certain legal obligations, but may not be retrievable without a valid court order. Consequently, Instagram encourages you to maintain your own backup of your Content. In other words, Instagram is not a backup service and you agree that you will not rely on the Service for the purposes of Content backup or storage. Instagram will not be liable to you for any modification, suspension, or discontinuation of the Services, or the loss of any Content. You also acknowledge that the Internet may be subject to breaches of security and that the submission of Content or other information may not be secure.

Once again, Instagram’s management accept no responsibility for anything. Including actually providing the service they claim to supply.

8. You agree that Instagram is not responsible for, and does not endorse, Content posted within the Service. Instagram does not have any obligation to prescreen, monitor, edit, or remove any Content. If your Content violates these Terms of Use, you may bear legal responsibility for that Content.

As in the rest of the document, all responsibility and risk lies with the user, not the provider.

9. Except as otherwise described in the Service’s Privacy Policy, available at http://instagram.com/legal/privacy/, as between you and Instagram, any Content will be non-confidential and non-proprietary and we will not be liable for any use or disclosure of Content. You acknowledge and agree that your relationship with Instagram is not a confidential, fiduciary, or other type of special relationship, and that your decision to submit any Content does not place Instagram in a position that is any different from the position held by members of the general public, including with regard to your Content. None of your Content will be subject to any obligation of confidence on the part of Instagram, and Instagram will not be liable for any use or disclosure of any Content you provide.

If you’re dumb enough to post it, then don’t whine if whatever you published ends up on the 6 o’clock news, the Huffington Post or in a half time ad during the Super Bowl.

10. It is Instagram’s policy not to accept or consider content, information, ideas, suggestions or other materials other than those we have specifically requested and to which certain specific terms, conditions and requirements may apply. This is to avoid any misunderstandings if your ideas are similar to those we have developed or are developing independently. Accordingly, Instagram does not accept unsolicited materials or ideas, and takes no responsibility for any materials or ideas so transmitted. If, despite our policy, you choose to send us content, information, ideas, suggestions, or other materials, you further agree that Instagram is free to use any such content, information, ideas, suggestions or other materials, for any purposes whatsoever, including, without limitation, developing and marketing products and services, without any liability or payment of any kind to you.

Unsolicited contributions won’t be paid for, which is standard for the online world.

The rest of the contract

Instagram’s terms and conditions go on for several thousand more words detailing dispute procedures, warranties and which laws apply – specifically the state of California. All of which only emphasise how one-sided the contract is.

An amusing touch in the Governing Law and Venue section is Instagram’s disavowal of the United Nations (in their capitals);

WILL SPECIFICALLY NOT BE GOVERNED BY THE UNITED NATIONS CONVENTIONS ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS

In other words, “we’re Americans – you can prise our unfair contracts out of our cold, dead hands.”

The serious aspect to this is that there is nothing in Instagram’s conditions that is unusual, the claiming of an unlimited license over posted content and shifting all responsibility onto the user are standard procedure for cloud computing, social media and other online services.

Before using them, you need to understand that these services are not your friends and do not have your professional or business interests at heart. The better you understand this, the better equipped you are at using these services to your advantage.

Ending the era of the computer password

Has the humble computer password reached the end of the line?

Earlier this year, Wired Magazine writer Mat Honan had his entire digital identity stolen from him when hackers cracked his email password and then systemically took over all of his cloud and social media accounts.

Matt writes of his experience on Wired and proposes it’s time to kill the password.

The problem with Mat’s proposal is that he doesn’t suggest an alternative.

The age of the password has come to an end; we just haven’t realized it yet. And no one has figured out what will take its place.

Every alternative authentication method to passwords has flaws just as serious, if not worse. Many are plainly impractical.

All of them, including passwords, have the common weakness that those holding the information can’t be trusted either – one of the greatest ways for passwords to get into the wild is when incompetents like Sony give them away.

Security is evolving, in the meantime we need to keep in mind some basic rules.

Use different passwords for different accounts
Only access accounts from trusted and up-to-date computers
Create strong passwords for accounts that matter, like online banking and email
Strong passwords are multiword phrases
Use two-factor authentication if its available
Don’t link unnecessary social media and cloud accounts together
Be very careful

We should also remember that a skilled, motivated hacker will probably break into your account regardless of your computer security. In this respect it’s no different to the physical world where a determined criminal will get you regardless of the locks and alarms on your house.

It’s also important to remember that security is more than just evil hackers; data can be damaged or given away by a whole range of means and people breaking into systems is only one risk of many.

Computer security is an evolving field and while it might be premature to declare the password dead, we’re going to see big changes as we try to lock down our valuable digital assets.

Windows Phone 8 launch

Can Windows Phone 8 reclaim Microsoft’s lost mobile crown?

This week’s launch of Window 8 Phone is part of Microsoft’s strategy to remain relevant in a world where personal computers and laptops are being left behind by smartphones and tablet computers.

In many ways, the tablet and mobile market is an opportunity lost by Microsoft – for a decade the market had been desperate for decent tablet computers and smartphones. The Windows tablet and PDA product in the early 2000s ran on was expensive, heavy and clunky hardware that discouraged even the most determined user.

The failure of Microsoft and their partners cost the company dearly when the iPhone and then the iPad stole the market from them. Today Apple’s iPad owns the tablet computer market while the iPhone on its own makes more money than all of Microsoft’s products put together.

Microsoft’s response to this threat to their core business has been slow and wasn’t helped by the company Windows Vista disaster, a mis-step that broke the PC upgrade cycle.

Fortunately Windows 7 put Microsoft’s core business back on an even keel as they contemplated their customers’ move away from the personal computer.

The strategy now for Microsoft with Windows 8 is the “run anywhere” philosophy where a document created on your tablet computer can be accessed just as easily on your PC or on a smartphone. This relies on a cloud computing service and the same operating system running on all devices – interestingly this “hybrid cloud” idea underpins Apple’s iCloud as well.

Being able to run documents across all Windows devices was a key part of Microsoft’s launch today with a demonstration of how Office 2013 files can be accessed.

To get the full features of Windows Phone though you’ll have to be running Windows 8 AND Microsoft 2013 on your tablet and personal computer.

Vendor lock-in isn’t surprising as this strategy lies at the heart of Microsoft’s business model – the problem is the market is moving away from the Windows platform and many of the devices, and people, Windows Phone users will be communicating with are using Android or Apple systems so many of the gee-whiz functions are lost.

One of the functions displayed is Rooms, which allows like minded people to share various features. As the Microsoft media release says;

Sometimes you want to share and chat with one group, not your entire social network. Rooms allow you to create private groups of people who have Windows Phone 8 — like your family members best friends or fantasy football league — and easily connect with just them. Chat, share calendars, shopping lists or photos in an ongoing conversation where only those invited can join in. You can share some aspects of Rooms with friends and family on other smartphones as well.

The problem is that when your family members, best friends or fantasy football league competitors aren’t using Windows 8, the Rooms function becomes little more than a glorified shared calendar – Dropbox and Google Docs provide more features.

For the family user Windows Phone 8 does have unique feature in allowing a children friendly profile called Kids Corner, where parents can quarantine the little ones from the main address books and features while allowing only certain apps to run. Unfortunately there’s only one Kids Corner so the little darlings will have to fight it out over the Angry Birds account.

That Angry Birds app is the harbinger of where Microsoft’s multiple screen strategy will either succeed or die in the ditch as it will be the available applications which will determine whether customers will buy the device over the iPhone or Android competitors.

Looking at the Samsung, HTC and Nokia phones that will be released running Windows Phone next month, all seem to be decent pieces of hardware although the Nokia 920 seems to be a hefty unit compared to the competition. Overall though all three phones seem to be decent competitors with their own strengths compared to the Android and Apple opposition.

The success of Windows Phone will define Microsoft’s place in the post-PC world, now its up to the company and its partners to sell them.

Rethinking customer support

As the computer power at our fingertips gets more powerful, the tools to help customers are getting smarter and better.

One of weaknesses in most organisations is getting customer service right, good support takes time which costs money and leads many big and small companies to scrimp on support to save a few costs.

In a conversation with BMC Software’s Suhas Kelkar about customer support – Remedy, one of the biggest helpdesk software packages is a BMC product – the discussion turned to how the process has changed in recent years.

Not too long ago we reached for manuals, but those vanished as CDs and then downloads became common. Then we’d call the manufacturer’s helpline or our unfortunate store who sold us the item.

Today we Google a problem to see if we can find a quick solution and if that fails we reach out to our social networks by posting the question on Twitter or Facebook. We may even post the problem to a support forum to see if anyone has an answer.

Only if can’t find the solution anywhere else do we call the support line, for most of us it is the last resort.

In some ways this is a success for corporate cost cutting as most of us call a “helpline” only in desperation as we’ve trained to expect long waits, confusing menus and poorly trained operators.

That model developed in the 1980s – in order to pay rockstar salaries to executives it was necessary to cut staff wages and training costs with after sales support often being the first business area to suffer cuts.

Eventually this started to backfire and the Dell Hell saga as one of the leading examples where the computer manufacturer’s lousy support became industry legend. It’s fair to argue that Dell has never quite recovered from the damage the period of poorly outsourced support did to their brand.

To repair the damage to their brand, Dell adopted a crowdsourced support model where company forums were available for customers to ask about problems with the hope other customers could answer before expensive staff became involved. Eventually other companies adopted this system.

Social media has created a doubled-edged sword for businesses, it’s easier for people to ask their friends for help but it also increases the risk of brand damage if online posts aren’t monitored and responded to.

All of this is forcing a rethink of how customer support works. For businesses big and small, social media and crowdsourcing tools are changing the way we talk to customers and how they can talk about us.

The big data push is also changing customer support as businesses now have the computing power available to mine knowledge bases, issue registers and call logs to identify market trends and weaknesses in their products or sales teams.

For business owners and managers stuck in the 1980s ways of customer support, they are in for a wretched time over the next few years.

Amazon and the Soviet customer service model

We all value our collections of CDs, books and photos, but what happens when we completely lose the digital equivalents?

The story of Linn, a Norwegian lady who had her account terminated by Amazon, demonstrates the dangers of being locked into one Internet company’s empire. Get cut off and you lose everything related to them.

A little understood part of the cloud computing and app world is that you, the customer or user – which isn’t necessarily the same thing – don’t really own anything. The money you spend on ebooks, mobile apps or web storage are for licenses to use the services, not the products themselves.

Should the supplier decide they no longer want to provide you with their service, then you lose your account and everything with it.

This is what happened to Linn when Amazon’s algorithm decided her account was in some way breaching their terms and conditions.

We have found your account is directly related to another which has been previously closed for abuse of our policies. As such, your Amazon.co.uk account has been closed and any open orders have been cancelled.

Per our Conditions of Use which state in part: Amazon.co.uk and its affiliates reserve the right to refuse service, terminate accounts, remove or edit content, or cancel orders at their sole discretion.

“At their sole discretion” is the key point here. This is a standard term in most online contracts and reflects the legal realities of the physical world where a shopping mall manager or bar owner can ask you to leave their property without having to tell you why.

When you use a virtual service, which includes e-books and cloud computing software, you are on someone’s virtual property and they can ask you to leave any time they feel.

Of course those rights are subject to any contract you might have with that e-book seller, cloud computing service or shopping centre but you have to be in a position to enforce them – not an easy task when you’re in Norway and their lawyers are in Connecticut.

Even if you want to enforce the agreement you believe these services have entered into, the grossly biased contracts attempt to put all obligations on users or customers while freeing the vendor of the distraction of being responsible for anything.

The real problem though is the lack of notice and fairness – this blog’s previously looked at how PayPal, Facebook and Google will shut down business sites without any warning or due process.

It’s one thing to get thrown out of a shopping mall but it’s another matter when your car and week’s groceries are still in there.

Even more worrying in Linn’s case is how ebooks and music purchased with Digital Rights Management (DRM) controls can be erased by companies like Amazon. Which is like walking home from the shopping mall you’ve been banned from to find the manager has called by to confiscate the toaster and TV you bought last week.

What’s particularly notable in all of these stories though is the Soviet customer service model, the Amazon”Executive Customer Relations” representative Linn dealt with refused to tell her what she’d done wrong or what rules she broke.

The only thing “Michael Murphy” would tell her was she was effectively banned for being linked to a blocked account and stated;

“Please know that any attempt to open a new account will meet with the same action.”

No notice, no appeal, no rights. The computer says no and the bureaucrat cannot help you further.

Trust lies at the core of all business and this is even more true when buying services like e-books and cloud computing products. If you can’t trust a vendor to provide a service, or to act openly and honest with you when a problem occurs, then it’s unlikely you’ll use that service.

A lack of trust is what web 2.0 companies like Amazon and eBay risk with hostile, Soviet style customer service. This is the weak point of the entire online business model.

For individuals and businesses it’s important to understand that those e-book, cloud storage or social media services may appear to be a bargain, but there are risks lurking in the fine print.

The new Soviets might be doing well at the moment, but their days are numbered just as the USSR’s were.

Ominious days for the omni-channel

The omni-channel retail buzzword bites the dust, and a good thing too.

At the beginning of the year we heard much about Omni Channel strategies as it dawned on retailers like Harvey Norman, David Jones and Myer that this Internet thingummy they’d heard about wasn’t going away.

When asked at the time what a ‘omni channel’ strategy was, Gerry Harvey admitted he’d had no idea what it was a week before it was announced while Myer CEO Bernie Brooks said late last years it was something about having electronic kiosks and free delivery.

So it was interesting to hear the CEO of US cloud computing service Netsuite, Zack Nelson, talk about his company’s ‘omni channel strategy’ this week at a lunch in Sydney.

On being asked what exactly Netsuite’s omni channel strategy was Zack let the cat out of the bag about the holy grail of the omni channel.

“There are so many channels, there are no channels,” said Zack. “Omni-channel was the only word we could find.”

So we can safely put the omni-channel myth to rest – the idea businesses can focus on one, two or three channels such as bricks and mortar, the web, iPhone apps or tablet computers was always flawed and risked locking companies into one or two technology platforms at a time when things are changing quickly and in unexpected ways.

Netsuite’s response is to adopt ‘responsive design’ principles where sites adapt to the device being used rather than spend lots of money building apps for devices that might be redundant in the near future.

This is true of business in general – we often forget the core role of our businesses, like the retailer’s mission is to get goods into the hands of eager consumers and TV stations or newspapers are ways of delivering advertising. Instead we fixate on the type of delivery vans we use, the background colour of our websites or which apps we are going to develop.

For retailers there’s a far more fundamental problem which Micheal Hills of CoCo Republic described at the same lunch, “people boast about buying designer labels online at discount prices but still want to go to bricks and mortar stores.”

That paradox is the sort of problem many businesses have to deal with which aren’t going to fixed by trendy buzzwords.

In Netsuite’s defense their use of the word ‘omni-channel’ is about offering multiple currencies and languages in the one package rather than selling to customers on different platforms. They aren’t using it as a cover for failing to notice their markets have changed in the last decade.

The main change in the market place is the good old fashion imperative of getting back to the basics of service and delivering value for money. The days of making money from finance packages or vendor rebates instead of looking after the customer are over.
Some managers are yet to understand this and their companies won’t have the luxury of indulging in buzzwords over the next decade.