Chris Rezendes, Founder of INEX Advisors recently spoke at the Internet of Things Summit in Boston in May 2015 and shares his latest views in IoT and data governance below. The power of data from the instrumentation of the physical world – IoT – is more fundamental than oil or money.  Data is the new air, water, energy, and food.Today, we are entering one of the greatest shifts in power on the planet: Access to, control of, and authorization to exploit, data about the physical world. And the taproots of these power shifts will be the data governance policies that we craft now, during the early stages of IoT. Why? For the entities that own or control access to and exploitation of data about the physical world, will have outsized influence over access and exploitation of that physical world. And if we intentionally, or inadvertently, hyper-concentrate ownership or access to data about the physical world, we will further worsen virtually every unstable condition that exists on the planet today, and we will create a few more. And if we pursue open data as the primary mode of information access, we invite similar potential for chaos. Put it in a physical world context: should everyone have access to clean, safe drinking water? Yes, but, we should not expect it to be free.

Should everyone have the option to drain and refill their pools every 7-10 days because they have a sensitive skin condition? Maybe, but, only if that consumption does not put pressure on clean, safe drinking water supply for their neighbors, and they might have to pay stupendously for that privilege. One could argue this is a rather simple case of supply and demand. But, there are larger, ethical implications too.

We cannot ensure everyone has clean, safe drinking water on a planet with limited resources if we do not know where the water is. On the other end of the spectrum, we cannot be honest and true and fair about the costs – economic, environmental, social, political, cultural, and more – to apply water in non-essential uses if we do not have an accurate picture of supply.

Today, without widely deployed IoT solutions to measure groundwater with more accuracy and higher resolution than current satellite and limited terrestrial tools enable, we do not really know how much water is where.  

If IoT companies develop and deploy sensors and algorithms and services that can tell us accurately, and at high resolution and pedigree, where the water is, how much there is, and how that supply changes under certain conditions, then that data about groundwater becomes a proxy for the water itself in some cases, and the critical input to water rights management, at least.

Given all that:

Should groundwater intelligence be free in an open data context?
Should groundwater intelligence become a marketable commodity in a fee-based subscription model?
Should groundwater intelligence become an IP-protected asset for a limited number of individuals or entities for national or economic security reasons?
Yes to all three, and it depends on the specific scope of the intelligence and terms of access.

One of the true giants of the licensed software industry offered this advice regarding data governance in IoT:

Set about adding policy development and legal experts to your current cluster of technology companies, industrial and commercial enterprises and physical world subject matter experts; for the existing licensing constructs do not account for many of the realities extant in the physical world nor the new tools we are developing in the digital realm.

Ultimately, the vast majority of IoT deployments will instrument physical world assets, inventories and environments in JOINT operating context. Meaning: Multiple stakeholders, liabilities and opportunities will be impacted. As such, they may have authentic claims to access some data about some physical world objects – whether then own or operate them or not.
Now to be clear: A legitimate claim does not translate into immediate, free or unfettered access to that data.

Every company’s strategy about IoT data governance should include at least three elements:

1. Locked–down IP
2. Open data
3. Market–based subscriptionsOne of the first approaches that we have been testing with a number of companies looks something like this:

1. All parties attest to securing data – Take a look at the cyberphysical rules in FDIC and NCUA regulated financial institutions
2. IoT solution providers and/or physical product and service brands own and extract their IP – typically rooted in but not limited to algorithms and models
3. Physical product owner/ operator owns the operational data
4. Physical product owner/ operator grants IoT solution providers and/or physical product or service brands exclusive license for internal processing, exploitation and dissemination (PED) of the operational data, but restricts the exposure of the data in any way to third-parties.
5. Physical product/ service owner negotiates with any and all parties relevant a wide range of licenses to all or parts of the data with any number of aggregations, de-identifications and such. Typically, we think this will be done with/ through an external partner.

Every company in the world needs to be thinking about and working on their new data governance rules related to IoT. For just as SMAC (social mobile analytics and cloud) have enabled people to get more connected, they taught people that the value is in the data.

The rush to own, control or secure access and exploitation rights to data from the instrumentation of the physical world could make the global petrochem, banking and IT industries far less relevant to how the planet organizes itself and operates in the future.

It could do the same to your company and you too...

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This is a guest blog and may not represent the views of RE.WORK. As a result some opinions may even go against the views of RE.WORK but are posted in order to encourage debate and well-rounded knowledge sharing, and to allow alternate views to be presented to the RE.WORK community.