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Title: Type: Editor(s): E-mail: Author(s): Doc ID: D1.1 First Year Report on Conference Session Public Deliverable Michael Boniface (IT Innovation), Brian Pickering (IT Innovation) mjb@it-innovation.soton.ac.uk, jbp@it-innovation.soton.ac.uk Michael Boniface (IT Innovation), Brian Pickering (IT Innovation) D1.1-v1.1.doc
AMENDMENT HISTORY
Version
V0.1 V0.2 V0.3 V0.4 V0.5 V1.0 V1.1
Date
4th Aug 2011 8 Aug 2011 8 Aug 2011 9 Aug 2011 9th Aug 2011 9th Aug 2011 10th Aug 2011
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Author
Michael Boniface Michael Boniface Cristobal Cobo Anne-Marie Oostveen Michael Boniface Michael Boniface Michael Boniface
Description/Comments
Initial draft Executive summary, Introduction and Conclusions Review Review Updated based on review recommendations Final version Final version for submission to EC
Legal Notices The information in this document is subject to change without notice. The Members of the SESERV Consortium make no warranty of any kind with regard to this document, including, but not limited to, the implied warranties of merchantability and fitness for a particular purpose. The Members of the SESERV Consortium shall not be held liable for errors contained herein or direct, indirect, special, incidental or consequential damages in connection with the furnishing, performance, or use of this material.
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Table of Content
1 Executive Summary 2 Introduction
2.1 2.2 2.3 2.4 2.5 3.1 3.2 3.3 3.4 Purpose of D1.1 Document Scope Overview Structure SESERV Contributions to FIA History Rationale Impact The FISE Community 3.4.1 Socio-Economic Projects in Challenge 1 3.4.2 Collaboration Tools Motivation Agenda: Friday December 17, 2010 Session Report 5.1.1 Motivation 5.1.2 Objectives/Description Agenda: Wednesday, May 18, 2011 Report 5.3.1 Questions and Answers Round 5.3.2 Rapporteurs/Organisers 5.3.3 Other Contributors
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6 FIA Poznan: Value creation, Value Flows, and Liability over Virtual Resources
6.1 Motivation 6.1.1 The Infrastructure Perspective (Makis Stamatelatos, UNIVERSELF, Dieter Uckelmann, Bremen) 6.1.2 The Societal and Business Application Perspective (Man-Sze Li, Co-Chair of FInES Cluster, Artur Nowakowski, Verax Systems) Draft Agenda, Tuesday, October 25, 2011
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1 Executive Summary
This document is deliverable D1.1 First Year Report on Conference Sessions of work package WP1 on FIA Session and Scientific Workshops within the ICT SESERV Project 258138. This document provides the Future Internet Socio-Economics community and the European Commission (EC) with information about SESERVs coordination of socioeconomic topics and contributions to the Future Internet Assembly (FIA) during the period September 2010 to August 2011. SESERV has successfully led and coordinated a community of researchers and stakeholders in the area of Future Internet Socio-Economics through the FISE Working Group (FISE-WG) the organisation of FIA sessions and participation in the FIA Steering Committee (FIA-SC). The FISE-WG now includes active participants from key European projects with socioeconomic dimensions (e.g. SEQUIOA, FI3P, PARADISO2 and UNVERSELF) and a membership of over 120 researchers from diverse domains of expertise. The FIA topics covered during the period include Information as an Economic Good (Ghent) and Economics of Privacy" (Budapest). Session reports have been published on the SESERV web site and submitted to the EC for inclusion in the final FIA reports[1,2]. Initial plans for the FIA Poznan have been drafted following the successful acceptance of the FISE-WG session on Value creation, value flows and liability over virtual resources. SESERV partners (IT Innovation and Alcatel Lucent) are now established as members of the FIASC and have co-authored FIA terms of reference formalising FIA structures and procedures. Socio-economics remains a key discipline in the Future Internet research domain as technology continues to pervade all aspects of human life. SESERV has successfully reinvigorated the FISE-WG with active contribution and a significant growth in membership in 2011. This not only reflects the importance of the discipline but also the need for a coordination action such as SESERV to bring together such a diverse and distributed European community. The participation of other Challenge 1 Collaboration and Support Actions within the FISE-WG has ensured effective coordination and dissemination across Challenge 1, beyond what SESERV could have achieved alone. SESERV expects the FISE-WG to continue thrive over the next 12 months through FIA sessions at Poznan, Denmark and Cyprus. The discussion will kick-off in Poznan with an FIA session and the 1st FISE workshop examining how technology disrupts the Future Internet ecosystem. This is an additional event that has been organised on demand due to limited time available during FIA sessions. The workshop will not only deliver insight into the ecosystem but will also allow researchers to share the methodology they used. The workshop is an opportunity to explore techniques for analysing FI ecosystems, how impact is achieved and what are the emerging considerations for design and experimentation. The expected outcome is a shared understanding of FI business ecosystem, the stakeholders and a comparison of methodology used to understand both baseline and future scenarios. The outcomes will be incorporated into a joint paper for distribution to the Future Internet community.
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http://www.seserv.org/fise-conversation/informationasaneconomicgood http://www.seserv.org/fise-conversation/theeconomicsofprivacydebate
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2 Introduction
The European Future Internet Assembly (FIA) continues to provide a unique forum for discussion and debate between diverse but converging technical domains of the Future Internet. However, it is generally accepted that technology discussion alone without awareness and understanding of socio-economic context runs a greater risk of low impact and irrelevance. Of course there are no certainties but it is clear that socio-economic awareness is an increasingly important characteristic for researchers, engineers and policy makers building the Future Internet. With limited resources socio-economics helps to ensure that endeavours focus on the important priorities, that technical solutions developed have increased durability and that stakeholder impact (positive and negative) is considered throughout the technology lifecycle. As a consequence, socio-economics plays an important part of Future Internet research and the FIA by bringing multidisciplinary insight into what is primarily a technical community. Socio-economic activities at the FIA are led by the Future Internet Socio-Economics working group (FISE-WG)[3]. The FISE-WG has operated since the start of the FIA in 2008 and has been responsible for contributing to the FIA programme through future scenarios and FIA sessions on selected socio-economic topics. Since September 2010, the SESERV project has coordinated the FISE-WG, bringing together a broad range of Challenge 1 projects and researchers including those from multiple disciplines. The organisation of socio-economic sessions at the FIA is an important element of SESERV coordination and the foundation for fostering community dialog and debate (more information Section 4). In addition to supporting the FIA programme, SESERV partners were accepted as members of the FIA steering committee. In this role SESERV has coauthored the FIA Terms of Reference and provided recommendations on how to improve the effectiveness of the FIA.
http://fisa.future-internet.eu/index.php/Future_Internet_Socio_Economics
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virtual resources. Section 7 provides conclusions for the period and expectations for the following year.Future Internet Assembly
2.3 Overview
The European Future Internet Assembly also known as FIA, is a collaboration between projects that have recognised the need to strengthen European activities on the Future Internet to maintain European competitiveness in the global marketplace. Currently FIA brings together around 150 research projects that are part of Challenge 1 of the ICT programme of FP7. These projects are advancing the state of the art in: The network of the future Cloud Computing, Internet of Services and Advanced Software Engineering Internet-connected objects Trustworthy ICT Networked Media and Search Systems Socio-economic considerations for the Future Internet Application domains for the Future Internet Future Internet Research and Experimentation (FIRE)
The Assembly is structured to permit open interactions and cross-fertilization across technical domains, reaching out to whoever has talent in Europe's Future Internet research community. It works towards: Vision, challenges, scenarios and roadmaps for FI research. The development of pre-normative principles, concepts, design, architectures, recommendations and functional specifications of key FI system components and their interfaces The development and maintenance of a consolidated calendar of events Steering the FIA community towards a higher degree of coordination and integration of the FI research actions by improving communication and collaboration between participating communities and improving the visibility of research results.
The full terms of reference for the FIA can be found EC publication What is FIA?4
2.4 Structure
The structure of the FIA is shown in Figure 1. The organisation of the FIA is supported by the following organisations, projects and individuals: European Commission, as overall coordinator Steering Committee Members, these are representatives coming from the different research domains that select the topics for the FIA conference and organise parallel sessions
http://www.future-internet.eu/fileadmin/documents/misc/What_is_FIA.pdf
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The local host of the FIA Conference, quite often an institution from the country that holds the European Presidency for that half year Coordination and support action (CSA) projects committed in their work programmes to support the FIA. These are called FISA projects (Future Internet Support Actions) Research projects that support the FIA goals
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3.1 History
The FISE-WG was established to support socio-economic discussion and debate at the Future Internet Assembly. From the 1st FIA event in Bled (2008), it was recognised that socio-economics had a critical role to play in guiding Future Internet research and development. Although the Challenge 1 community was primarily composed of technical domains, the pervasiveness of the Internet into all aspects of modern life meant that consideration of socio-economic concerns was becoming increasingly important. This was reflected at FIA Bled where socio-economic was the subject of discussion during a stimulating plenary slot, supported and driven by the current SESERV partner UZH. Following Bled a set of working groups where established to support FIA activities, where the current SESERV partner IT Innovation became active in FISE, too. The working groups were established as cross-cutting entities to try and overcome the wall gardens that existed at the time within Challenge 1. Socio-economics, as an intrinsically crosscutting discipline, was accepted as one of the FIA working groups and FISE-WG was created. From Bled to Valencia, the FISE-WG provided various contributions to European Future Internet Community in line with the FIA objectives. This included the promotion of the European FI agenda and results, fostering dialog and creation of a FI community interested in socio-economic issues, strategic road mapping, position statements, scenario analysis, white papers and FIA publications. The first major publication was a joint position paper Future Internet Socio-Economics Challenges and Perspectives which was published in the FIA Book 2009[5]. The paper set the scene for socio-economic challenges facing the society, business and FI community over the coming years. SESERV partners led and participated in the FISE-WG from the outset providing caretaker roles for the group, organisation of sessions and presentations at FIA Events. SESERV partners led the creation of the initial paper from concept through to delivery; bringing together ideas and opinions from diverse domains. It was therefore a logical next step to establish a coordination action to support the FISE-WG to provide a closer link to FP7 research projects and improve the coordination of socio-economic activities within Challenge 1. So on this basis the SESERV project was initiated and continues to support and evolve the FISE-WG.
3.2 Rationale
The socio-economic aspects that affect the Internet are as complex and interwoven as society itself. This complexity is based on the interdependence of those disciplines that study changes in human nature, where economics, political science, humanities, psychology and law are linked to concepts like privacy, freedom of expression, intellectual property and social networks but also to topics like education, security, regulation, private
http://www.future-internet.eu/fileadmin/documents/madrid_documents/FISE/FISE_position_paper_final.pdf
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life, communication, business, trust, intangible incentives, to name but a few. The Future Internet Socio-Economics FISE Working Group (FISE-WG) is a multidisciplinary community of researchers and professionals working at the intersection between technology, society, regulation and the economy. Members of the group are connected by the common desire to discover new perspectives on Future Internet research challenges by considering insights from multiple and complex interconnected domains that reflect current and future operational environments of Future Internet systems. By designing, developing and applying technology with socio-economic awareness research outcomes are likely have increased relevance, durability and impact. The FISE-WG aims to bring together those who study and those who build the Future Internet to discover new perspectives on Future Internet research and to understand impact of technology.. FISE-WG members participate in a multidisciplinary community of researchers and professionals, learn from others in different, related fields and bridge the gap between technical innovation and socio-economic outcomes.
3.3 Impact
FISE will perform activities that support the FIA objectives with the aim to increase the awareness of socio-economic insight in Future Internet research. This will be achieved by: Documenting vision, scenarios and research challenges that consider socioeconomic priorities as part of the FIA road mapping activity Fostering multidisciplinary debate through coordination and contribution to FIA sessions related to socio-economic issues Fostering community engagement through the maintenance of an open web presence on LinkedIn (http://www.linkedin.com/groups?about=&gid=3870856) and wiki (http://fisa.future-internet.eu/index.php/Future_Internet_Socio_Economics)
The key performance indicators used to measure the performance of the FISE-WG are detailed in SESERV deliverable D4.1 First Dissemination, External Liaisons and Exploitation Plans
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(PARADISO is an acronym formed by the two words PARADIgm and SOcietal, and an obvious reference to a better world). SEQUOIA: The SEQUOIA project aims to perform an assessment of the socio-economic impact of the research projects in the area of Software as a Service and Internet of Services (SaaS and IoS); develop a self-assessment methodology that on-going and future research projects will be able to adopt and apply on their own after the end of this support action; develop a set of recommendations for how self-monitoring mechanisms can be adopted in order to facilitate the self-assessment process and enable the impact of SaaS/IoS to be optimised in future calls. FI3P: macro-economic study in support of the Future Internet public partnership aiming to explore the impact of the FI-PPP on the European Internet industry Internet Science: This network of excellence (funded by the Seventh Framework Programme) is expected to start Oct-2011 with the aim of bring together a multidisciplinary team of European researchers for the purpose of exploring the epistemology of Internet Science. 3.4.2 Collaboration Tools SESERV has established and maintains various collaboration tools to support the FISEWG. These are described in more detail in SESERV deliverable D4.1 Firstly, a LinkedIn Group was setup in spring 2011 to provide a forum for dissemination and discussion of Future Internet Socio-Economics. The group currently has 123 members from within Europe and beyond, and is used as a primary channel for disseminating SESERV information with direct RSS feeds from the SESERV website. The group is also used by other projects such as SEQUOIA and PARADISO to disseminate opinions and results. The group is led by individuals within SESERV, other projects and organisations. Secondly, a FISE wiki was created as a collaboration space for the creation of shared content such as agendas and working papers. The FISE wiki has been migrated from the SESERV.org domain to the future-internet.eu domain to disassociate ownership, to encourage cross-project participation and encourages the permanence of the FISE-WG beyond the lifetime of the project. Finally, SESERV maintains a FISE mailing list http://lists.eurescom.eu/exilist.cgi.pl?filter=fise for discussion and dissemination of information.
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o Obj 1.1 Networks: SESERV (http://www.seserv.org/) George Stamoulis o Obj 1.2 Services: SEQUOIA (http://www.sequoiaproject.eu/) Andrea Nicolai o Obj 1.6 FIRE: Paradiso2 (http://paradiso-fp7.eu/) Roger Torrenti
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profoundly changing the labour market. Service providers can now offer the ability for individuals to provide small skill packets to employers, which can only be realised through large social networks and information exchanges. Search needs to move beyond text and beyond content to smart searchers (demand curve), repositories (supply curve) and search engines that use multi-sourcing of information. The way we search is changing the creative processes. Traditional scholars used to be in textual communities around a piece of content (e.g. a book). Connections where made through the mind of the author. Search is entirely different, today people do not read the text, people look at what they already know. With text communities people already knew because they had studied the material and could quickly move on to have critical discussions. With search today building on common search terms this is good reinforcing but poor for innovation. Enabling Role of the Information Broker (an Example from the Energy Domain) Simonovs presentation focused on the role of information sharing and brokering in increasing the efficiency of energy grids through a reduction in imbalance between supply and demand. Information can be used to create anticipatory knowledge. Information sharing is important to ensure we achieve a carbon neutral environment but ensuring we use energy in the right ways and in line with societal goals. By collecting energy usage patterns based on past behaviours and combining this with environmental information and predictive models better forecasts for our energy needs can be made. The challenge is the cost of real-time monitoring of energy consumption considering the sampling rates and the amount of data generated. There is currently a lack of capacity in real-time data processing to realise the benefits. The question is at what resolution do we take measurements? For 20 million households with a sampling rate of 15 minutes will generate 1.92 Terabytes of data/sec, for 1 sec sample rate this increases to 1728 T Bytes of data/sec. The cost of creating this anticipatory knowledge is a critical factor in assessing its value. The new information must bring more value than the cost of creation (monitoring, distribution of monitoring, processing, etc). Simonov discussed the need to switch from individual and collective decision making. The overall goal is to reduce the imbalance in the energy system, a key source of inefficiency and emissions. The FI challenge is how to transform the additional costs for the knowledge into increased venues for the supplier and reduced costs for consumers. This is where the information broker comes into play. By sharing real-time monitoring information between large groups of consumers in common information spaces the predictor models can be improved and actionable insights created that can reduce inefficiencies and create a win-win for everyone. Simonov presented results from the EC HPPC/SEA projects which are developing such a predictor models based on generic algorithms that deliver insight into consumer demands based on real-time monitoring information. Beyond Copyright Eriksson presented an analysis of trends and revenue models within the music industry. Following years of reduced revenues due to music piracy and pricing pressures, the music industry is looking for business models that move beyond digital downloads. In this context the information is the experience or the coordinator of the experience. Culture is seen as increasingly immaterial, liberated from physical constraints (e.g. digital music) and with streaming services in the cloud nobody holds the files anymore and no commitment (e.g. purchase a product) is really required. The problem then moves to search as the
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production process moves from a manufacturing paradigm to information production and distribution challenge. In reality, information is not the primary good as it does not recognise the parts of the cultural domain in the environment. A film is the same whether it is seen in the cinema or at home but the collective experience of going to the cinema is important. The industry is looking to increase revenues by creating community experiences around content where individuals have to make greater social and financial commitments. This has manifested in a move from copyright to a model where live experiences and performances by artists are increasingly important. Eriksson called this the post-digital age where real and digital worlds are combined to move from networked content to networked experiences. The impact of this shift moves revenues from labels who record the content to artists who create the performances. Service providers must create incentives to disclose, share and facilitate relationships through online and physical events. This requires investment and commitment in a deeper sense from individuals. In fact this can be seen in music scenes which are built up on networks of trust. The selection of acts and events has a large impact on attendance which is important for the discovery of new acts. The challenge is the shift to focus to local, social context and the role information can play in specific social situations. Eriksson discussed FabLabs where people can access digital fabrication tools and share information with people at a physical location. This is similar to the medieval textual communities discussed by Cave earlier in that now we form communities around social objects. Eriksson finished on cultural production and cultural expression where the recorded element does have an important function for creating cultural memory over time. In this case memory (experience + recording) can invoke something beyond the experience but before things go too way out we called time on this interesting presentation.
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would be in the Future Internet; what business models are used and whether and how privacy could be monetized. We discussed possible policy and legislation issues that could have a direct impact on the economics of privacy. In particular, we addressed the following challenges: Innovative business models for privacy. The new business models harness personal information of users. We discussed how data ownership and the data ownership tussle between stake-holders influence economic transactions and what economic agents reap from these transactions. Based on the tussle analysis outcome, the relevant economic exploitation potential may be assessed in terms of the economic choices an agent has, as well as the value of a resource an agent has control over. Furthermore, we discussed how market players influence consumers in the disclosure of personal information and in obtaining consent to conduct different activities with the collected information. Finally, putting the pieces together, the session provided views on how viable innovative business models for privacy can be integrated into the sustainable business models of the Future Internet. Pricing for/of privacy. Personal information is increasingly used in the marketplace for personalized services and behaviour-based pricing as well as targeted marketing. The question is, on the one hand, what would be the fair price for personal information. On the other hand, the question of how to price privacy is still at large. This depends very much on the individual perception and evaluation of privacy. This session discussed evaluation methodologies and feasible pricing mechanisms for/of this special economic asset. Privacy as a service. Putting pricing and business models together, understanding users needs, taking into account legislation on privacy protection, we come to the point of providing privacy services. The session also addressed the issue of how to create a feasible and sustainable framework to provide privacy services for web-based services, social computing, and cloud computing.
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Jonathan Cave (Warwick University and RAND Europe) Nicola Jentzsch (DIW Berlin) Kai Rannenberg (Goethe Univeristy Frankfurt) 11:25 11:50 Moderated discussion on the challenges of Economics of Privacy in the Future Internet o The discussion shall begin with a Q&A between moderator and panellists. The moderator shall gradually open the Q&A to the audience. 11:50 12:10 EU projects: position statements o To stimulate discussion, the moderator shall invite position statements by relevant EU projects SESERV (Eric Meyer from Oxford Internet Institute) PARADISO 2 (Roger Torrenti, project coordinator) BiC (Jim Clarke, project coordinator) 12:10 12:25 Moderated discussion (continued) 12:25 12:30 Wrap-up (Martin Waldburger, University of Zurich)
5.3 Report
The session identified privacy as a major socio-economic concern in the Future Internet. Tuan Anh Trinh introduced the session (cf. PPT slide set) by highlighting that while the issue has been discussed in previous FIAs, the economic aspect of privacy has not been thoroughly investigated. Trinh mentioned the examples of Google and Facebooks success that have the root cause in their innovative business models. According to Trinh, these business models are partly based on the innovative use of personal information of the users. He challenged the audience by putting the question: Will these business models be sustainable in the Future Internet? Finally, Trinh positioned personal information as an economic asset. This statement was reflected from multiple points of view throughout the session: Nicola Jentzsch differentiated after reminding that privacy is a human right and thinking about it in economic terms would not change this basic fact in her keynote speech personal from private information. Jentzsch introduced the according economic definition of privacy: Privacy is a state of asymmetric distribution of personal information among market participants. She explained the set of three pre-conditions for markets for personal data to emerge: First, property rights to personal information have to be specified. Second, the infrastructure for transfer of personal data has to be in place. Third, incentives for firms and consumers for collecting/trading and disclosing personal information, respectively, have to prevail. She, thus, explained the economic cost-benefits calculus conducted by consumers when disclosing personal data (so-called privacy calculus) and how salience, social comparison and other effects impact on the consumers decision. Jentzsch spoke about competition strategies of firms in markets for personal data: firms will conduct targeting, behavior-based pricing and social sorting, for example, with differing impact on consumer welfare. She explained how competition intensifies if consumers choose to remain anonymous and buy only standard products. She also stated that
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customer lock-in could increase when personalization increases switching costs. Finally, Jentzsch explained how research about consumer lock-in can be undertaken referring to a research project conducted for ENISA. Estelle De Marco shed light on the legal situation for privacy and, by that, the legal frame to be consistent with in personal information markets. She showed the link between privacy and personal data, which are elements of the private life and protected for this reason by multiple international and European legal sources (European Convention of Human Rights, EU Charter of Fundamental Rights, EU Directives). She emphasized that the EU legal requirements apply in many cases, even to non-EU entities, and highlighted the main legal requirements (imperative information and, in many cases, consent of the consumer, for instance). Regarding consumer perception of privacy and its exploitation, she notably highlighted that a more positive attitude is noticed when legal requirements are respected. The actual valuation of personal information in economic terms determined the main topic for Aljosa Pasic and Kai Rannenberg. Pasic asked attendees whether they would share their political opinion for 20 . The majority would have. He went on and asked about religion where somewhat less attendees, but still the majority in the audience, would accept the offer. Pasic, however, asked why a company would want to pay 20 if that information is (often) available for free? In this respect, he commented on the legal situation which he found to be general in nature (e.g., proportionality principle) and incoherent from state to state. This may render the evaluation of privacy compliance a lengthy and costly process, he added. For companies, he found two optimization dimensions in privacy compliance to be key: costs and risks (both to be minimized). Hence, he concluded that a solid cost-benefit analysis is needed. For that purpose, a structured approach to the analysis of complex systems is needed. One possible example of such an economic valuation approach for privacy-enhancing Identity Management (IdM) was introduced by Rannenberg. This valuation approach wants to overcome the shortcomings of common decision making processes. And it should lead to a set of decision-relevant economic consequences of adopting, mediating or providing privacy-enhancing IdM services. Accordingly, he proposed a process model that identifies stakeholders with their costs and benefits and assesses aggregated and clustered costs and benefits under different scenarios (e.g. with and without a trusted third party). Rannenberg concluded that minimization and decentralization of data is important, as well as the empowerment of users. In the following round of project statements, Eric Meyer (SESERV Coordination Action) positioned privacy in a socio-economic context, as privacy to him is a question of technological capacities, goals, and attitudes. Meyer asked whether there could and should be a trusted third party that can release personal information if really needed. He suggested that such a trusted agent which he mentioned is not a new concept per se might address privacy issues raised in the session. So, he concluded that potential solution approaches may exist for some problems, but we are not implementing them as yet. Meyer invited the audience to participate in the respective privacy-oriented discussions within SESERV, e.g., during the Oxford workshop in June 2011. Roger Torrenti introduced Paradiso 2 as a project that explores the future of society. The project produces recommendations to the EC and the exploration of the limitations of the Internet is one of these recommendations. Privacy (from no privacy up to full privacy) has been identified as such a limitation.
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Jim Clarke (BIC Coordination Action) presented recent activities from around the globe specifically on economics of privacy including those within the EU, US, Canada, Korea and Australia. If there is any interest in contacting or linking with the people involved in these activities, this could certainly be facilitated by BIC, according to Clarke. 5.3.1 Questions and Answers Round Q: Did trusted entities that keep personal information private emerge in the market? A: Jentzsch explained that this was the case for recent start-up companies such as Allow, MyID.com and Bynamite. She explained that in some cases consumers would be paid for the sale of their data. Q: Are there models for the valuation of privacy and, if yes, have they been reliably tested thus far? A1: Jentzsch explained that there is research on quantification of privacy, however, much remains to be done in that area. The valuation of consumers regarding their personal data could be assumed to be context-dependent, but yet not completely arbitrary. A2: Rannenberg stated that no one really knows the value of privacy. One way to circumvent this issue is to involve users into the decision making problem and to aggregate valuation after that. Q: Is privacy a possible asset in public services, too? A: Rannenberg stated that the presented assessment model could be applied in the design of a public service as well. Q: How to address a users question: Can I see all the data you are collecting about me? A1: Rannenberg proposed a dashboard which may help users see the data being collected. A question however is how to organize the data in the dashboard in a meaningful way. A2: De Marco emphasized that a right to access is granted in the European Directive, as well as a right to be informed. If, despite these rules, it stays in practice difficult for a user to know who is collecting his data, for several reasons, we can note that within the framework of the revision of the Directive 95/46/EC, it is notably foreseen to increase transparency for data subjects and to strengthen users rights. Regarding profiling, the information of users is mandatory, and information given in the general terms and conditions being not sufficient when a cookie is used, under EU law as interpreted by the Article 29 working party. Q: How could the cost of privacy compliance be determined? A: Pasic pointed out that different levels of compliance have to be considered. For security, for instance, there is compliance with ISO standards (ISO certification).
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5.3.2 Rapporteurs/Organisers Tuan Anh Trinh, Budapest University of Technology and Economics Nicola Jentzsch, DIW Berlin Estelle De Marco, Inthemis Martin Waldburger, University of Zurich
5.3.3 Other Contributors Aljosa Pasic, Atos Origin Jonathan Cave, Warwick University and RAND Europe Kai Rannenberg, Goethe University Frankfurt SESERV (represented by Eric Meyer, Oxford Internet Institute) PARADISO 2 (represented by Roger Torrenti, Sigma Consultants) BiC (represented by Jim Clarke, Waterford Institute of Technology)
6 FIA Poznan: Value creation, Value Flows, and Liability over Virtual Resources
6.1 Motivation
The creation, distribution, and consumption of virtual resources are foundation elements of the Future Internet and the digital economy. Disruptive innovations in virtualised infrastructures has reduced TCO, enabled faster time-to-market for new application and services, and improved business continuity/disaster recovery. Virtualisation is rapidly moving from its roots in computing to encompass all Internet-connected hardware from the network to the Internet of Things. In addition, disruptive innovations in content distribution and business models have moved virtual goods into a major revenue stream for the media and entertainment industry. Consumers are spending real money on intangible virtual goods with the estimated total European market for virtual goods alone in 2010 estimated at $1.02 billion which is comparable to the US. In the session, virtualisation and liability aspects will be approached from two perspectives: Infrastructure Perspective: in order to explore value creation and revenue flows in Future Internet business scenarios for network and service co-management as well as to exploit such issues in the area of Future Internet of Things, Societal and Business Application Perspective: in order to challenge business applications in Software as a Service context and services infrastructures for social and business innovation.
In the session several aspects related to network, service and application management need to be addressed in the context of Future Internet and virtualized infrastructures:
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What are the value structures? What are the activities that contribute to value creation? How does money, information and knowledge flow between stakeholders? How does such information and knowledge impact value creation? What monetization strategies are working? What technical abstractions have the potential to maximise value creation from physical assets (e.g. Grid vs Cloud)? How should responsibility be distributed between stakeholders? What are the corresponding scenarios? Who is the value guarantor? What is the balance between regulation, self-regulation and market forces?
6.1.1 The Infrastructure Perspective (Makis Stamatelatos, UNIVERSELF, Dieter Uckelmann, Bremen) Future Networks are expected to be highly dynamic and ubiquitous; at the same time the wide introduction of network virtualisation enabling co-existence of several virtual networks over the same physical infrastructure results in complex scenarios of network and service co-management. Introducing autonomic networking may have several business impacts related to changes in the business players positioning in the various values chains, split, re-assignment and decentralisation of control contributing to improved QoS, better service provisioning and QoE as well as the emergence and support of new relationships between stakeholders and roles archetypes: resource owner splits from resource provider or platform provider. The Future Internet ecosystem is therefore increasingly organised into systems interacting and exchanging virtual resources between infrastructure, application and services that are aggregated into complex integrated communities. This ecosystem is providing the potential and opportunity for new business roles and patterns of value exchange between virtual trading communities, virtual knowledge communities and emerging intermediaries. However, technology and business need to be developed in a way that will ensure a cost benefit (make money save money) as well as a certain level of trust inside the ecosystem and especially between value producer and value consumers meta-roles. In this sense, accountability and liability in value networks of virtualised resources remains a challenge due to the opaqueness of contractual relationships and indeterminate distribution of responsibilities between stakeholders. Value propositions should be always assigned a value guarantor to ensure liability between the value producer and the value consumer; it is expected that different scenarios will be deployed reflecting differentiations in liability and responsibility between involved players in new dynamic value chains. Such scenarios will always be challenged in terms of their viability, and, therefore, novel business meta-models are expected to be developed to reflect more generic responsibilities, flows and interrelations inside the ecosystem; such meta-models can serve as references for the different scenarios. Such reference models will provide a framework for the setup, the analysis and the description of business activities and reduce the complexity of an ecosystem to its core elements and their interrelations; more detailed business models instances will then be applicable to certain parts of the ecosystem (e.g. within an enterprise) to better understand
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business potential, scenarios viability and corresponding roles positioning in the new everchanging contexts. Moreover, the Internet of Things provides a (conceptualised/abstracted) networked infrastructure enabling incremental business transformation as well as radical business changes; increased competition, market changes and new laws or regulations may require a radical rethinking of doing business. We are considering the value of information provided through the Internet of Things rather than on physical product offerings as the value proposition. Therefore, special rules concerning "Information as a Service" have to be considered. The fundamental rules of value creation through information in the Internet of Things may change business models for the Internet of Things. However, there is also a need for corresponding infrastructures to monetize on information in the Internet of Things. Open billing interfaces need to enable the free flow of money/payments without a tie-in to a specific billing provider at minimal transaction costs even for micro-payments. 6.1.2 The Societal and Business Application Perspective (Man-Sze Li, Co-Chair of FInES Cluster, Artur Nowakowski, Verax Systems) Research from the Future Internet Enterprise Systems (FInES) domain suggests that an increasing number of enterprise centric services will be commoditized and factorized in the Internet of the Future as a set of Utility Services, available to all enterprises at a very low or zero cost, with guaranteed quality of service, and provided under non-discrimination and non-exclusivity policies. The Utility Services are to be contrasted with Value Added Services, which are premium, typically pay-as-you-go services, offered on a proprietary basis. Historically, the commoditization of hitherto value added services has been a clear trend in many industrial sectors including ICT. It is envisioned that IT services which are commoditized would be provided as (part of) an open platform, or via federation of open platforms. Examples of utility services include service search, composition, security, privacy, collaboration and interoperability. At the same time, Software as a Service (SaaS) is a software distribution model widely discussed recently, with more and more suppliers applying it. However, contrary to SaaS predecessors (Platform as a Service, Infrastructure as a Service), its more general application with regard to enterprise software is still debated in the context of business, technological, legal, quality and security aspects. The proposed innovative service infrastructure, as a collection of utility services provided via one or more open platforms is called Interoperability Service Utility (ISU) and is one of the four Grand Challenges identified in the Research Roadmap1 of the Future Internet Enterprise Systems Cluster2, of DG INFSO at the European Commission. SaaS can be considered as an approach enabling or facilitating utility service infrastructures. Preliminary results from the ongoing research on service infrastructures described above indicate that technical, social and business innovation is increasingly intertwined. Specifically: Business innovation is constrained by continuous tension and tussle of interests between innovation and monopolisation/lock-in. Technical collaboration between the relevant actors, which is essential for bringing and implementing utility services to the market, can easily be eroded by competitive pressures and the general trend towards ICT consolidation, There is in principle business (and money) to be made for implementing sector or application specific utility services for encouraging and catalysing the development
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of value added services within individual and well defined industrial settings. However, interoperability of enterprise centric services between such islands of service infrastructures cannot and should not be automatically assumed, The ROI for (utility) service infrastructures based on the supply-demand model of conventional economics is not compelling for market actors in purely commercial terms, The structure (topology) of enterprise networks will be as important as the structure of the Future Internet in which they inhabit. The parallel present market developments characterised by the rising dominance of open service platforms and infrastructures, while creating its own ecosystem, are simultaneously deconstructing existing value chains and market structures. In other words, incremental market evolution may paradoxically lead to its opposite: large scale dislocation, consolidation of market power and foreclosure of market opportunity,
In parallel, for SaaS wide application in ecosystems and enterprises a number of business; technological and legal issues have been identified: Different actors have their role and their interests: software vendors, system integrators / software resellers, data centers, end-clients. Various billing approaches can be applied: cooperation between software vendors and data center providers can be arranged either according to the service separation model or revenue sharing models, Technological challenges include software delivery platform, standard application interfaces, integration issues, Legal aspects include constructing Service Layer Agreements, questions of responsibility and legal regulations, With regard to SaaS security, there are many reservations concerning the identity management, weak standards (SAS 70, ISO 27001), security processes nontransparent, risky access from everywhere, uncertain data location. Also, the imperfections related to the processes of preparing and handling SaaS solutions are often underlined. Concerns about quality overall performance, reliability of suppliers and SLA compliance are discussed.
The question for the (Future) Internet as a Universal Business System for Enterprises and SMEs in particular has been raised leading to the proposition of considering different forms of innovation through the lenses of business innovation, with potential ramifications of how to go about conceptualising, architecting, developing, testing and ultimately implementing technical architectures and enterprise systems. Moreover, again from a business perspective, such endeavours need to account for continuous innovation of business models and the underlying value models upon which the specific business models premised. At this stage, relevant key questions include: Assuming that the existence of utility based service infrastructure(s) is(are) a precondition for realising the Future Internet as a Universal Business System, who is/are going to develop and maintain such infrastructure(s), and according to what principles and interests? How to preserve the neutrality of the Internet of Services and the open competition among Added Value service providers, while providing basic Utility Services as a public good?
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Is the commoditization of certain basic services a necessary pre-condition for stimulating entrepreneurship and innovation? What would be the optimal governance model for the service infrastructure(s)? What are the technical ramifications for architectural development? How could SaaS be exploited towards utility-based service infrastructure? Which are the software categories better and worse matching the SaaS distribution model? The suggested criteria to assess software suitability: business criticality, need for security assurance, legal requirements, usage patterns, data storage, software specificity.
The Societal and Business Application Perspective (30 mins) - Chair Man-Sze Li (FInES Cluster) 4-5 position statements (10 mins) discussion (20 mins)
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8 Abbreviations
Acronym CSA EC EU FI FIA FIA-SC FISA FISE NoE ICT ISU IT SLA SaaS SME WG WP Definition Collaboration and Support Action European Commission European Union Future Internet Future Internet Assembly Future Internet Steering Committee Future Internet Support Actions Future Internet Socio-Economics Network of Excellence Information and Communication Technology Interoperability Service Utility Information Technology Service Level Agreement Software-as-a-Service Small and Medium Sized Enterprise Working Group Work Package
9 Acknowledgements
This deliverable was made possible due to the large and open help of the SESERV consortium, members of the FISE-WG and other Challenge 1 projects. The authors would like to thank: SESERV partners Burkhard Stiller, Martin Waldburger (UZH), George Stamoulis, Costas Kalogiros, Didier Bourse (Alcatel Lucent), Daniel Field (ATOS) and Eric Meyer, Cristobal Cobo, Anne-Marie Oostveen (OII). Partners of the SEQUIOA, PARADISO2, FI3P and UNIVERSELF projects All FISE-WG members who have contributed to successful FIA sessions over the past 12 months.
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