Tesla’s first-ever CIO, Gene Glaudell, is leading TM Forum’s charge on digital trust. He talked to Annie Turner about why it is at the top of his agenda and its critical importance to the increasingly digitized global economy.
“I haven’t been this excited about going to work since I was the first CIO at Tesla Motors,” says Gene Glaudell. What’s he so excited about? Digital trust, but let’s take a step back first. Two years ago, Glaudell was focused on global financial services and digital payments, and specializing in advising top execs about seemingly intractable business and technology issues.
“I came across a Commonwealth Bank of Australia case study and found TM Forum was central to its successful strategy, and of course financial services are now undergoing the same disruption that telecom has been going through for 15 years,” he explains.
Glaudell runs his own company, Gn0man, and joined TM Forum, because he “recognized the value of its assets and community to jump-start financial services taking the transformation journey too.” He got involved in the steering group for the Forum’s Internet of Everything program, its privacy efforts and work on the Digital Platform Reference Architecture.
Breadth and depth
The breadth and depth of this work brought home the critical and urgent importance of trust to every part of the digital world. He states, “Platform-based businesses must create a trusted ecosystem if they are to thrive.”
This realization was endorsed by the fact that trust was found to be the second most important aspect of the IoE Roadmap of challenges, researched and published by the Forum last fall.
“The big ah-ha was realizing that digital trust turns the increasing expenses of mandatory security, privacy and regulatory risk management into revenue-enhancing competitive advantage for digital ecosystems,” he says. “For example, GDPR compliance investments change from minimalist check-the-box exercises to better transparency which increases customers’ trust scores.” (Read this article for more on GDPR.)
Glaudell has carried out his own additional foundational research and worked with other Forum members and outside experts to explore ideas and validate interest in digital trust, to contribute to TM Forum’s 2020 Vision.
He quotes the Forum’s Insights Research report, The roadmap of options: Monetizing and managing IoE services, to set the scene, “Within a few short years it’s safe to say there will be tens of billions of interconnected devices, with market projections ranging from 20 billion to more than 50 billion by 2020.”
A common definition
Glaudell references the definitions of trust and digital trust developed by digital law expert Jeffrey Ritter in his 2015 treatise, Achieving Digital Trust: “Trust is the affirmative output of a disciplined, analytical decision process that measures and scores the suitability of the next actions taken by you, your team, your business, or your community. Trust is the calculation of the probability of outcomes.” Further, digital trust is “authentic trust in the digital information and the devices, systems, and networks … that you access to do your job.”
“When we make decisions to trust people, organizations or things to do things on our behalf, we are estimating the likelihood that our expectations of the results and risks will be satisfied, whether we do it consciously or subconsciously,” he says. “Defining trust and trust decisions mathematically is what makes real-time decisions regarding trust – by both humans and digital entities – in digital ecosystems and the IoE possible.”
Another key insight that Glaudell and his TM Forum colleagues drew from the US’ National Institute of Standards and Technology (NIST) and its Cyber-Physical Systems Framework and other research was that trustworthiness is the unifying umbrella for the capabilities a digital entity needs to be trusted. Security, privacy, safety, reliability, resilience and assurance all contribute to the trustworthiness of digital information, devices, systems and networks.
He says, “Trustworthiness combines qualities like security and privacy, and translates them into something that has financial value like customers’ trust.”
It can take years
“It can take years to build trust and trustworthy systems, but only a moment to destroy that trust, then years to earn it again,” he adds. “Every company sometimes fails to meet customers’ expectations or experiences a cybersecurity incident. Those that invest in trustworthiness as a differentiating capability will lose less trust and recover it faster.”
He adds, “Unless you get trust right, you end up with reverse network effects as you scale. Apple is a great example of that – they aren’t perfect, but they are highly trusted by their customers.”
Glaudell also studied frameworks, metrics, and APIs developed by industry associations such as the Online Trust Alliance and the Cloud Security Alliance. They have begun to partially address digital trust in specific ecosystems such as the web and cloud service providers.
Through workshops at TM Forum’s Action Week in February, the project team established the need for a standard Digital Trust Model and associated APIs as the initial findings. They need to be validated among a larger member audience.
Market research on trust trends that Glaudell has examined (for example, the 2017 Edelman Trust Barometer) suggest that an inflection point is occurring. He says that trust in digital systems could well start decreasing in 2017, as the growing digital ecosystems and IoE are likely to experience accelerating cybersecurity incidents, in both numbers and scale.
The prime drivers of these activities are organized crime and rogue nation states. There are likely to be more mass distributed denial of service attacks on IoT infrastructure and a ‘trust divide’ widening between the general population and the informed public.
Negative network effects
“Each participant that joins an ecosystem increases the risk, and N participants in an ecosystem service can significantly increase risk,” Glaudell says. “What does this mean? It means that unless you get trust right, you end up with reverse network effects as networks scale.”
He adds, “One would expect that the bigger the network, the more value users derive from it. However, as networks scale, that value to users could drop for a number of reasons.” For example, Airbnb found it had to insure both types of its customers – property owners and their guests – to create a secure, trusted trading platform, and that a ratings engine alone wasn’t enough.
A famous example of a platform alienating its users was MySpace after it was acquired by News Corporation. The company went the wrong way about trying to commercialize it and lost almost $15 billion in the process.
It’s not inevitable
Most encouragingly, though, Glaudell believes there is an alternative, positive scenario and that TM Forum’s 2020 Vision could be instrumental in that.
“In digital interactions, people organizations and devices make informed decisions about trust in real time,” he says. “They are enabled by standards – such as for information, processes, integration models, metrics and algorithms.”
And crucially, “Digital ecosystems and value fabrics realize their full potential through frictionless trust decisions.” Indeed, lack of friction in all aspects is one of the foundations of successful platform businesses, and trust is perhaps the most fundamental of all.
Glaudell is also enthusiastic about the contribution that emerging technologies such as machine learning, blockchain, and smart contracts, supported by a foundation of digital trust standards, can make to the vision of real-time digital trust a reality.
The graphic below sums up the vision that he has worked with TM Forum’s Chris Stock and its Privacy, Fraud, Security and Revenue Assurance projects to develop and which they are proposing to the Forum for adoption.
The next step will be to publish a whitepaper on digital trust. It will outline:
- how and why digital trust is central to sustainable digital ecosystems (which in turn are a core part of the Forum’s focus);
- the importance of transparency and that while establishing digital trust is essential in a world of partnerships and ecosystems, it requires a fundamental rethink of strategy, culture, people, processes and technology;
- the role of digital trust in enabling real-time, data-based decisions in ecosystems, including between IoT participants. This is a neglected area that urgently needs attention; and
- a digital trust roadmap of challenges (see below).
Once the Forum reaches a consensus and endorses the concept of digital trust, its vision and roadmap, Glaudell is keen to identify other standards development organizations working on digital trust and build an interaction plan, evangelize the message and get members of the Forum to commit resources and contribute assets.
He concludes, “TM Forum is the natural place to do this work because of its open, collaborative nature and presence, because telecommunications are core to the digital world, the right people are here and because digital trust will make the world a better place. Certainly, I expect to be focused on it for the next several years.”
This article appears in Perspectives 2017: Digital transformation opens new markets. Download the full report free here.