Consumers for sale.
Twitter lit up like a Christmas tree yesterday as outraged Instagram users complained about changes to its terms of service. In the first major step by the photo-sharing service since it was bought by Facebook, Instagram apparently gave itself the rights to sell the 4 billion photos it has accumulated.
Instagram CEO Kevin Systrom rushed out a blog post to dispel the unrest but only confuse the issue further. ReadWriteWeb’s Dan Lyons summarised it beautifully:
“Um, no, you guys all misunderstood what we’re planning to do, and we need to fix the language in our statement, and we’re totally not going to sell your photos to advertisers, we’re just saying that we have a license to license them to advertisers, which is not the same as selling them, so we’re totally not lying, right?”
As Lyons went on to point out, Instagram’s reputation has taken a hammering, regardless of Facebook’s true intentions for its pictorial motherlode.
Unfortunately these eruptions in consumer services can cast a shadow over business services which store information in the cloud. If Instagram can try to sell users’ photos, will DropBox or Box try to monetise my business files? They already hold all the files in their cloud data centres – what if they decide to start mining them for advertising opportunities?
Google has to constantly remind people that its Google Apps for Business service is not supported by advertising – unlike the near-identical Gmail service for consumers.
When it comes to cloud, businesses need to accept two contradictory truths.
1. Almost any cloud service could find some way to exploit information stored by its business owners for commercial gain. To put it bluntly, they have access to all your information.
2. No cloud service for businesses would dare to do this because their customers would dump them overnight.
There’s a world of difference between a free cloud service for Instagram and a paid-for service such as Box or DropBox. Facebook paid nearly $1 billion for Instagram at a time when it generated $0 in revenue. Something had to change.
DropBox and Box, on the other hand, collect rent. They make money by providing cheap storage services to hundreds of thousands of businesses by carefully dividing up space in their data centres.
If it makes you feel nervous that they have access to your business information, just remember that many offline services do too. If the post office began opening your mail to scan it for advertising opportunities before delivering it to you, would you do something about it? What if your doctor started shopping your medical records to pharmaceutical companies so they could pitch you new cures to your ailments?
These scenarios would never happen because of these businesses’ social and legal contracts with customers (or patients).
The same goes for a cloud-based business service. Just because it’s hosted online doesn’t mean it should be treated differently than an offline business.
The lesson from yesterday’s fracas is simple: Don’t use Instagram and other consumer services to store your business information.