It takes effort, skill, and investment to be a hub

When we think of Facebook we often think of it as a social networking site.  Yesterday, for a period of time, people trying to log into other, 3rd party, sites which use their Facebook account for authentication were redirected to an error page.

At this point it became clear to them that services such as Facebook and Twitter have become much more that just social networking sites.  In the race for global domination, many players in this space have a strategy of creating an ecosystem that revolves around them as the hub.  The success of their business model is ultimately tied to volumes of users, and the digital footfall of those users.  This has led them to ‘open up’ their authentication services to other sites.

For the user, the benefits are that they need to remember less passwords, and they have come to largely trust Facebook et al with their security.  From the other side it allows the hub to follow what the users are doing in order to ‘curate their life’ which is a valuable commodity to advertisers.

In taking this approach they have quietly built ecosystems with them at the hub or as the keystone.  However, as people such as the Food Standards Agency, O2, Blackberry, and others have found in the recent past, the hub position is one that has significant rewards, however, it isn’t without significant risks.

If for any reason the hub fails in a way that destabilises the ecosystem then it can have catastrophic effects.  Deep trust can take years to build, and seconds to lose.

In this increasingly networked world of services and products, companies clearly see the opportunity of being the hub, however, how many of them have truly invested in the skills, and capabilities that are required to sustain such a position?

A hub has to: be robust yet flexible; considered yet agile; active yet in the background.  These are all balances and trade-offs that have to be taken in a multi-dimensional, dynamic way and constantly through time.

Whilst the examples that we have seen are largely the result of technical failures, what is shows is that to play such a pivotal role the hub has to be robust in terms not only of the technology, but of their processes/policies/practices, their information flows, communications, and their connections to the rest of the ecosystem and the users.

Shocks will happen to ecosystems, however, the level of impact is will be driven by how well the keystone player rebalances the ecosystem to counter the shock.  Get this wrong and it can be catastrophic for the ecosystem, get it right and the past investment can pale into insignificance.

Collaboration Trumps Competition

When I read Mat Honan’s article earlier this week it certainly hit home the potential risks associated with life in the cloud.  For those of you who didn’t see the article, Mat, a journalist at Wired magazine, found that his Twitter and Gmail accounts had been hacked, and he found out when his computer and phone were remotely wiped using his iCloud account.  What made it more important was that the hackers hadn’t used sheer computing power to crack the passwords, they had taken the time to understand the security processes that Twitter, Amazon, Google, and Apple use.

They managed to find a way of playing the four companies off against each other to piece together enough information to take over the Twitter account which was their real target.  A lesson for us all, and if you’re suddenly feeling rather vulnerable then have a look at the Guardian article which may help you sleep tonight.

Whilst important from a personal level, and much has been written about that this week, it is also important at an industry level.  We have been ‘educated’ that the cloud is the way forward, and it certainly has benefits.

In the rush for market share, the companies on the cloud bandwagon, however, have focused on the user experience, the and the robustness of their data security from a physical perspective, in an individualistic way in order to create competitive advantage.

In this rush, and the competition around it, what this week has shown is that they have missed the real risk that affects all of them equally.  The risk that the consumers lose faith in their ability to store their treasured and valuable documents and photos.

If only, amongst the competition, the main players had thought to look at the industry level risk and then collaborated in that area, where success was fundamental to ‘the cloud’ rather than giving any one company an advantage then it is likely they would, themselves, have seen the fundamental flaw in their collective approach.

It’s always easy in hindsight, and I’m sure we’ll now see a rush towards two-factor authentication and biometric log-ins.  Whilst this would be a good step forward, what is really needed is two fold.

Firstly, companies to wake up to the importance of commercial innovation in terms of the processes, information flows and the like, that are increasingly important in the world and to invest a higher proportion of resources in that area.

Secondly, in a competitive world, organisations need to ensure that they aren’t blinded by competition and that they seek opportunities to collaborate when the potential risk is wider than just themselves.  It is a real skill to be able to compete with someone one day and collaborate the next, but one that is increasingly important in an increasingly open source world.