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BIG DATA: Cloud Providers and Their Access to Unprecedented Information
Monday, May. 19, 2014
Cloud services are becoming an increasingly important part of most business operations across sectors, industries, and geographic regions. Cloud service providers create a place for companies to run, build, and store applications without having to setup their own servers, in addition to offering other software and services. As firms flock to the cloud, the small number of major service providers such as Google and Amazon, now have access to a new type of growth indicator: spending on cloud services. Through monitoring the spending of the client base, across a wide array of businesses, providers are in a unique position to forecast market trends and even growth of particular companies. IBM has already stated intentions to use this data in their consulting practice, even with companies who do not use their cloud services. The debate is centered on whether “spending on cloud” is a special kind of metric, which violates the privacy of the clients, or if it’s akin to web traffic or app downloads. Some argue the metric is the type of information only an inside employee would have access to, and should be considered insider trading. What should we make of this new business practice?
Kirk: The monetizing of this data is another example of the creativity and opportunism of American business. If I owned a public warehouse, it would be inappropriate for me to tell others how much space a user occupied. Cloud spending supercharges this, because the metric is such a powerful indicator of growth and future prospects. Given the privileged access to this information that cloud providers have, use of it for investing or consulting purposes would be insider trading in my view. This is one more example of the law failing to keep up with new technologies. We have plugged these holes in other situations: we should do the same here.
Patrick: I’m on the other side of the fence on this one. I see “spending on cloud services” as a metric is organically produced in the course of doing business. Cloud service providers are not insiders, they’re service providers, and they are not bound by a professional code of ethics that necessitates discretion (e.g. attorneys, doctors). Also, allowing this information to be traded on will result in more efficient outcomes on the stock market, as prices will more accurately portray the value of the company. If cloud users demand “opt-out” clauses, then providers should take note; but that’s a business decision, not an ethics decision.
A Framework for Thinking Ethically (Markkula Center)
NEXT STORY: Google to Release Diversity Data
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