Apple’s self-serving privacy crusade against Facebook is pure genius. And it’s a playbook that could work in your industry too
Apple’s recently-launched iOS 14.5 disabled the ability of ad networks to track you. Just like that.
Well, OK… not just like that. But not far off.
Apple has very cleverly positioned this as a triumph for the individual over the faceless corporation: Facebook and other major app developers like Foursquare or Activision Blizzard will no longer have such unfettered access to your data. You, the individual, are back in control. Apple is fighting the good fight.
There’s another analysis of this situation we can make. One that is rooted in hard-headed competitive strategy. And an emerging technology, known as ‘Confidential Computing’, could hold the key to executing the same strategy against the incumbents in your industry.
The reality is that Apple has identified something profound: many of their competitors’ business models are utterly dependent on unfettered access to your data. And Apple’s is not.
MORE FOR YOU
So if Apple can restrict advertisers’ access to data, it fundamentally weakens key competitors… and it makes Apple look like the good guys. Win-win! If you’re Apple, that is.
Now, Apple is hardly a random challenger, pluckily seeking to take on the incumbents. It just happens to have noticed that its competitors’ biggest asset – their access to your personal data – can be ruthlessly turned into their greatest weakness.
But this idea – turning your competitors’ data from an asset into a liability – could be far more broadly applicable.
For example, in many information-centric markets, the biggest players are often little more than data warehouses with some custom analytics and long customer lists. You’re never going to peel off their customers one-by-one. But can you turn their privileged access to that database against them?
Or perhaps you’re looking at online marketplaces and would quite like your fair share of those juicy commissions that flow whether prices go up or down? After all, sometimes it seems like all they do is match buyers to sellers, and yet somehow end up owning huge amounts of market data that they then sell back to their customers. Can you make their privileged market position a competitive disadvantage for them?
What do these examples have in common?
Answer: these businesses are all fundamentally built on aggregating data from multiple parties who are hesitant to share data with one another directly, and processing it to create additional value.
And, because they are incumbents, they’re running on tech stacks designed for a world before data privacy became a ‘thing’. They have huge databases full of customer data, which means they are only ever one ‘fat finger’ error from a data breach that makes the front page of all the newspapers.
Deep in their hearts, these data aggregators know that their access to all this data has gone from being an asset to a liability. And most of them are terrified.
The supposedly impregnable incumbents are actually trapped. Their business models and systems architectures are on the wrong side of an unstoppable industry trend towards privacy-first computation. The very things that made them so successful and powerful – their huge customer data sets – are now the things that could bring them down. It would only take one rogue employee. One catastrophic hack.
It’s almost tragic: these firms have reached the pinnacle of success by asking their customers to trust them with their most precious information. And it now turns out that ‘trust’ is not enough.
It’s no longer enough to promise that you ‘won’t be evil.’ You need to be able to prove that you or anybody with access to your systems simply can’t be evil.
And this is because there’s a new technological sheriff in town that means it’s even possible to contemplate such a thing. It goes by the boring name of ‘Confidential Computing’ but it promises something transformational. The firms who master it won’t need to beg their customers’ trust. They’ll be able to prove they’ve earned it instead. And those who find themselves on the wrong side of this trend won’t know what hit them.
Quick Explainer: if you search ‘Confidential Computing’ you can’t be blamed if you get confused very quickly: the technology industry is its own worst enemy when it comes to explaining new concepts! So here’s what you need to know right now: this new technology lets you run applications that prevent anybody from tampering with them or seeing things they shouldn’t – not even you, the operator. And – this is the key part – these applications can cryptographically prove this to their users, with a proof that is provided by the physical hardware that is doing the computations. If you’re providing services to a customer, you can use this technology to convince them beyond doubt what your service will do with their data, before they’ve even sent it. They no longer have to trust you; they can verify for themselves. That’s the essence of confidential computing, and it’s a game-changer.
But what does this have to do with ‘David versus Goliath’ competitive strategy? How can this strange new technology give aspiring upstarts a chance to dethrone powerful incumbents in existing markets?
The answer rests on how Confidential Computing enables solutions that can prove to users how their data will be processed, who can see it, and what they can do with it. No longer do users simply have to hope, pray and trust. They can audit and inspect it for themselves! It’s a fundamental step forward in computer and data security.
We will look back on 2021 in astonishment.
We will be appalled that firms shared information with each other without any technological enforcements over how that data will be used. We will be aghast that firms could freely assemble vast data sets of other people’s information, where only paper contracts and ‘folk memory’ constrained what could happen to it.
Confidential computing, and related techniques such as Fully Homomorphic Encryption and Zero Knowledge Proofs are going to blow through the halls of today’s industry incumbents like a storm they haven’t seen before.
So, if you’re a challenger seeking to take on one of these profitable service providers, whose business has been built on handling and processing other people’s data, then this is your moment. And if you’re a senior leader at an incumbent, the clock is ticking, but there’s still time.
If you’re a challenger, you can construct services that analyse your customers’ data without your staff needing to have access to it. You can build products where your customers can easily pool their data together for matching, analysis or any other purpose, all whilst verifying technologically exactly what you can – and cannot – do with it. And once these solutions begin to roll out, the world will change in the blink of an eye: once customers – and regulators – see that this new privacy-first architecture is possible, they will begin to demand it.
Just as Apple doesn’t need direct access to detailed customer records to succeed, neither do you if you build a solution using privacy-preserving techniques. And just as Apple can use that to hammer Facebook into the ground, you can do the same to the incumbents in your target market.
And if you are one of those incumbents, don’t sit there waiting for the steam roller. Instead, drive the change you know is coming.
Confidential Computing is here today. The wave is about to hit!