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Thursday Throwdown: Privacy Edition
The recent backlash towards Amazon’s pending buyout of high-tech vacuum maker iRobot highlights how protective people have become about their personal information.
Fear that Amazon could dig up the dirty details of our home lives is one of the latest reasons privacy advocates are up in arms and bombarding the FTC with complaints.
More importantly, it has brought renewed attention to an issue that consumers simply refuse to sweep under the rug.
A growing list of breaches and scandals have people very concerned about the security of some of their most intimate data. Whether related to online shopping, mobile phones, or social media, people are downright anxious about how safe their everyday tech habits really are.
Each consumer macro trend related to the protection of personal information have increased on a YoY basis. Data Privacy concern mentions are up +30% YoY. Not far behind is User Privacy, an issue that has become increasingly important as businesses deploy hybrid workforces and the global digital transformation unfolds.
But was exactly does User Privacy mean?
What companies are at the epicenter of this heated firestorm?
1. User Privacy is a Matter of Trust
From highly profitable multinationals to local non-profits, there are a ton of organizations obtaining data about their consumers and members. As a result, user privacy has turned into a huge deal.
When we open any sort of account or sign up to be part of an organization, we reveal lots of personal details about ourselves. It’s not just credit card information.
Mere participation in an organization represents private information that need not be broadcast to the world. Net worth, medical conditions, sexual orientation, and all sorts of other personal information can be gleaned simply from identifying a user.
The businesses and groups that collect user information have a legal (if not moral) obligation to protect this data. Some are conflicted by the financial reward that goes with sharing the information. All are vulnerable to hackers.
Regulations like CCPA and GDPR exist to safeguard consumer information and foster customer trust. Unfortunately, such regulations aren’t applicable to all who hold user data.
In this decade alone, there have already been several privacy breaches that have exposed consumer data. SolarWinds, Microsoft, Facebook, LinkedIn, Marriott, and the list goes on.
As the headlines keep pouring in, consumers have grown wearier of cyber-attacks, identity theft, and other forms of compromised privacy.
While the issue applies to virtually all industries and organization sizes, mega-tech companies face the most scrutiny. Given their massive hordes of data and influence, Amazon, Apple, and Meta Platforms are frequently in the crosshairs of the privacy battle.
2. AMZN, AAPL, & META are Under Pressure
A theft of customer information or security breach would deal a devastating blow to Amazon, not to mention consumer trust. It’s a risk that applies to all e-commerce businesses, but with Amazon.com (or AWS), the ripple effects would be felt throughout the tech sector.
Going back to its early days, Amazon has always sought ways to make its site more secure to earn shoppers’ confidence. Today, approximately 200 million people worldwide visit Amazon.com from their device of choice. ‘The Zon’ may have the most at stake when it comes to maintaining user privacy.
The company says it never sells individual customer data but concedes it sometimes shares personal information with third parties to provide customers with services or when required by law. It’s the sharing with third-party service providers that makes a lot of consumers uneasy and is the source of much criticism on social media.
The fallout from reduced digital ad spending on Facebook, Twitter, and others have been felt in recent earnings reports. More importantly, Apple’s line in the sand showed how serious it is about protecting the private data it gets from customers.
Aside from the inability to target users as it once did, Facebook (META) has also felt the heat from U.S. regulators in the wake of the Capitol insurrection, acts of domestic terrorism, and other events stoked by private social media groups.
The Cambridge Analytica scandal revealed how the Trump campaign used millions of Facebook users’ data to build voter profiles. This along with scandals that followed has put the spotlight on the need for better user privacy controls at Facebook and its social media peers.
In fact, many companies are stripping the functionality to “login with Facebook” from their sites.
Although steps have been taken, social media users remain far from convinced that their personal data is safe—especially given its immense value to advertisers and ill-intentioned third parties.
3. Companies that Facilitate the Protection of Data are Poised for Growth
The increasing occurrence of user data breaches and privacy concerns has also put cybersecurity firms in focus.
Soon we’ll be adding cybersecurity specialist CrowdStrike (CRWD) to our coverage list.
CrowdStrike is a leading provider of endpoint, identity, data, and workload protection. Its AI-powered ‘Falcon’ platform detects threats and stops breaches from all angles.
With more businesses operating in remote, cloud-based environments, we think the company’s comprehensive protection of PC’s, servers, virtual machines, and even IoT devices will be in high demand.
CRWD’s software is deployed fast via the cloud to a range of enterprises that transcend industry groups. More than half of the Fortune 500 uses CrowdStrike as do 15 of the top 20 U.S. banks.
And with global cloud migration in the early stages and CRWD rolling out new subscription-based modules, the growth story looks pretty compelling here.
Keep an eye out for this new addition.