Predictions 2008 – Social Trends and IT Law

January 3, 2008

From Roger Bickerstaff, Partner at Bird & Bird and SCL Trustee:

1. I predict an increasing focus on open source software in the business applications environment for major corporate users – not for cost or ideological reasons but more for vendor independence reasons. Open source gives major corporate users an opportunity to develop and have developed software solutions that relate more closely to their business needs without becoming dependent on a single software developer. Clearly issues of reliability, confidentiality and security remain to be addressed but it is likely that open source software will increasingly be regarded as a component of the standard corporate business environment.
2. Software virtualisation will also pose increasing challenges for the standard proprietary software licensing model.  It will become increasingly difficult to link software to processors and software vendors will need to develop licensing models which work in different ways. 

From Kit Burden, Partner at DLA Piper UK LLP and SCL Trustee:

In terms of types of deals for 2008, I expect to see a continued growth in outsourcing and offshoring, but with more focus on some of the more innovative possibilities as opposed to the commodity aspects. Open source will continue its expansion too, with the reluctance of financial institutions in particular to embrace it for legal/risk reasons being gradually eroded. Data privacy will also remain front and centre in the corporate consciousness, as organisations grapple with the implications of operating on a truly global basis.

From Clive Davies, Senior Counsel at Fujitsu Services and SCL Trustee:

2008 will be the year when community based software evolves from the gaming world and MMORGS (World of Warcraft and Star Wars) and from social networking and leisure sites (Facebook and Second Life) to being useful business tools which will foster and promote online communities within law firms and their clients.

From Professor Richard Susskind OBE:

My advice to lawyers and law firms everywhere is to take Web 2.0 very seriously indeed in 2008. We are entering a new era of Internet activity, one that will directly affect the daily working lives of legal practitioners. The impact on the legal profession of social networking and online collaboration will be profound. I am more confident about this than I was, in 1996, when I said that the Internet would transform the communication habits (e-mail) and information-seeking habits (the Web) of lawyers. In 2008, we will see the beginnings of the legal world embracing Web 2.0.

From Anna Cook, Partner, Wedlake Bell:

I think that the suppliers of outsourced services are gaining confidence and they are being less flexible in the provision of services.   Also, services are becoming more commoditised.   In turn, this is giving rise to simpler contracts.  Customers are also seeking to negotiate shorter term contracts and more flexible exit provisions so that, if they do not like the service, they can go elsewhere.  For litigators, this is likely to mean that, in the coming year, there is more work arising out of contract terminations.

There will be changes to the law on data protection and privacy, particularly insofar as the data relates to children. Not only is there a growing anxiety about the proliferation of databases created by government (and its apparent inability to safeguard this data), but there is also concern that children are compromising their own privacy by participating in social networking sites.

Following on from the Gowers Review, the impact of recent decisions in Europe and Australia and the recent agreement between French ISPs and the local music and film industry, we may see more activity on the part of ISPs to take action to prevent online piracy.   A failure by ISPs to take action to prevent online piracy is likely to result in the introduction of the legislation suggested in the Gowers Review.

From Maureen Daly, Partner and Head of Technology and Intellectual Property at Beauchamps Solicitors, Ireland:

I predict that many of the following issues (which have held our attention in 2007) will continue to do so in 2008:
1. The ability of a claimant to discover the identity of the authors of anonymous materials posted on the Internet will remain a topical issue for bulletin board owners and their legal advisors.
2. With the popularity of Second Life, real life companies are moving quickly to establish a presence in order to exploit new advertising opportunities. However, lawyers wait to see how actions for infringement of intellectual property rights will be played out in such an environment.
3. The legal skirmishes involving social networking sites such as YouTube will continue to enthral lawyers worldwide.
4. While the (eternal) war against counterfeiters will continue in 2008, operators such as eBay will come under increasing pressure form brand owners to halt the sale of counterfeit products on their sites.
5. Data security will be an important issue in 2008. In light of recent high profile data protection breaches in both the UK and Ireland, the private and public sectors will come under increased pressure to ensure that they are data protection compliant. Consumer protection will also be an important area for companies to monitor, particularly in light of EU proposals to increase the protection afforded to customers who buy digital material online.

Andy Lucas, partner in the Technology Law Group at Field Fisher Waterhouse LLP:

Even before the HMRC and the missing CD ROMS, information security has been creeping up the agenda of corporates and consumers alike. The laws and regulations do not seem to be acting as a deterrent to either the hackers to stop them attacking or those that hold data for their failure to keep it securely. Technology will become the universal panacea, with technology companies flooding the market with their hardware and software security solutions – not all of which will be effective. Boards will be urged by their shareholders to do something quick. Lawyers with real knowledge of the sector will therefore be at a premium. The safe prediction is that 2008 will not be without further major informational security lapses.

From Mathew Philips, Media, Communications and Technology Partner at Olswang:

It is inevitable that Youtube and other user-generated content services will remain popular, but we will start to see more and more TV programmes and movies being provided online on a commercial basis. As choice increases, so will take-up, but consumers will continue to prefer free programming (even if ad-supported) over paid-for programming. Mass adoption of any online TV services (free or pay) – and true ‘in-home’ convergence – will be constrained by consumer concerns around DRM and (notwithstanding the increasing number of media streaming devices on the market) by the perception of online TV as a ‘lean forward’ experience.

From Pearse Ryan, Partner at Arthur Cox, Dublin:

From the perspective of an Irish law firm, my predictions for 2008 are:

1. Public sector consumers of IT to (hopefully) finally come out of their shell and start to release those projects which have been on hold for some time now. We have had difficulty with some of the larger public sector IT projects in recent years (many of which your author has had the pleasure of dealing with), causing public sector procurers to retreat into their shell. This cannot continue indefinitely.
2. A continuation of the trend we have seen in IT and BP outsourcing over the last number of years, namely a slowish development of the market, typically marked by one substantial deal per year. To date, the public sector has not jumped into the outsourcing pool and has just about dipped its toe into the water, which has had a constraining effect on the market generally. If the multi-national multi-jurisdictional outsourcings are taken out of the equation, the Irish outsourcing market has seen fairly modest growth over the last few years.
3. An increased emphasis on data protection issues, with the Data Protection Commissioner flexing his muscles and ever increasing media and public awareness of the importance of the security and integrity of personal data. We also foresee continued increases in instances of the DP legislation being used as a means of pre-litigation discovery.
4. A continuation of the slow but steady inroads made by open source software into the medium to large application development and service provision spheres. The public sector, in particular, has been slow to embrace open source.
5. An increase in the importance of computer forensics and, in particular, in the area of litigation. See the predictions made by Andy Harbison of Deloitte Ireland here.
6. Generally, we get the impression that 2008 will be a year of steady-as-she-goes, as opposed to significant growth. With the slowdown in the economy generally and, in particular, a tightening of the supply of cheap money, the amount of M&A in the domestic IT sector is likely to be muted. To compensate for this, however, one area of growth for the IP/IT lawyer is the involvement of the third-level educational sector in R&D and collaboration with the private sector. It also has the benefit of being interesting work.

From Simon Briskman, a partner in the Technology Law Group at Field Fisher Waterhouse LLP:

US corporations will lobby Europe to simplify privacy laws, allowing smarter Web advertising. We will also see new Web 2.0 entrants causing valuation jitters for current platform owners. Joost and other peer-to-peer solutions will spread, whilst applications such as BBC iPlayer will drive ever higher bandwidth requirements. Reliability of web resilience, security and speed will become key issues and Sarbanes Oxley, MiFID and other regulation will continue to add complexity and maturity to the outsourcing model.

Mike Conradi is a partner at Kemp Little:

2008 will, I think, be the year that the concept of ‘Web 3.0’ starts to become understood more widely. Where ‘Web 2.0’ describes Web sites aiming to facilitate creativity, collaboration, and sharing between users (mostly by means of user-generated content) ‘Web 3.0’, also called the ‘semantic web’, describes the concept of making the internet’s content more readily usable and understandable not by humans but by computers. This is achieved by tagging information in standardised formats so that computers can understand the relationships between things and their properties. If the Web as we know it today is like a book, the Web as we know it in the future will be like a vast database. This will make it possible for developers to mash up content from different sources extremely easily, and a whole range of new applications will become possible. During 2008, I think, we will start to see the first examples.

From David P Crocker, attorney and counsellor based in Portland Maine and qualified English solicitor:

In the spirit of Professor Marvel in the Wizard of Oz, I believe several trends will continue and accelerate during the coming year. 

First, virtualization will change the way enterprises of all sizes allocate resources, forcing efficiencies by reducing excess hardware and fully utilizing what remains.  At the same time, virtualization will tend to complicate both security (because a single host system can house multiple virtual machines, the security of the host becomes critical, particularly when virtual machines may be moved at will from one box to another with a few mouse clicks), and chargeback tracking (with multiple virtual machines jockeying for CPU usage – in effect, a return to ‘time-sharing’ technologies).  VMWare, as the industry leader, will further complicate Microsoft’s position in the server market, as VMWare virtual machines utilize their own operating system.  It is inventions like these that will reduce Microsoft’s marketplace dominance, not silly court decisions that bloviate about yesterday’s technology.  

Second, illicit content distribution will continue to evolve in response to legal attempts to stamp it out.  This means that ‘darknets’ that facilitate the copying and distribution of everything from music files to child pornography will morph in response to such legal threats.  As Biddle, England, Peinado, and Willman predicted in 2002, darknet denizens seem to overcome every short-term impediment to distribution (such as content protection and vulnerabilities in distribution architectures) and to create networks of individuals sharing the same tastes, depraved or otherwise.  Welcome to the dark side of social networking.

Third, our digitized personal information will continue to slop around the world, regardless of any government’s efforts to protect it or limit its dissemination.  As the recent HM Revenue fiasco illustrates, it is precisely the agencies charged with security that are often the most clueless.  And that’s why I listen to any government’s diktats on security and data protection with grim amusement.  The emperor has no clothes, you see. 

From Simon Deane-Johns, General Counsel and Company Secretary of Zopa:

Economic conditions will deteriorate further in the financial services industry. Downward pressure on revenue and the cost of funding, marketing and distributing financial services to consumers and small businesses will force institutions to compete on innovation and service quality. But not being organised to provide either, these incumbents will fail to resist the entry of facilitators that have built trust and loyalty by empowering consumers to get the product that is right for them personally in other retail markets. Banks will be the back office service providers, not the front, for Financial Services 2.0.

From Renzo Marchini, Counsel at Dechert LLP:

2008 will be the year of data security. There will be an ever increasing clamour for data controllers to be subject to ‘data breach laws’ (a legal obligation, not yet present in English law, to notify individuals when there has been a security breach), for the Information Commissioner to have increased powers (to audit practices without the consent of the data controller) and for data protection legislation to have some more serious effective remedies (criminal sanctions for certain (if not all) breaches of the data protection principles as opposed to the current administrative step of enforcement orders). Both public and private sectors will increasingly take data security seriously; recognising that data protection is not only about compliance with the law but about citizen or customer trust.

From Alex Newson, Senior Solicitor – IP&T, Freeth Cartwright LLP:

I believe that the most important new technology trend in 2008 will be the mainstream use of mobile phones for activities that would previously have been done on computers. Smartphones, able to edit office documents, run software, send and receive e-mails and surf the Internet, and even manage bank accounts, are featured in the phone ranges of all the major operators; this is no longer a Blackberry-only zone. The falling price of smartphones combined with sensible data rates will see these phones become increasingly mainstream in 2008. Whilst small screen sizes will mean that most people will not use phones for serious document editing or research, they will replace laptops for quick tasks such as checking e-mails, looking up information on Web sites and (probably using a wireless keyboard) making minor tweaks to office documents.

Many will forget that phones were originally designed for making calls. For those that nostalgically remember such functionality, 2008 will see the increasing use of VOIP via mobile phones, making the most of those cheap data rates.
The mainstream use of such phones will present new opportunities and challenges. The increasing number of Web sites designed for use on phones will raise the possibility of the mobile Web effectively becoming a separate entity. Software and Web site developers supplying the mobile software market – or more accurately, their advisors – will have to get creative in ensuring that terms & conditions and privacy policies are incorporated into end-user contracts whilst only working with screens smaller than business cards. Businesses will have to confront the security, confidentiality and compliance issues raised by their employees carrying (whether or not with permission) sensitive information on such devices.

2008 will also see the snowballing (no festive pun intended) of existing key trends such as:

• A recent survey by the Information Commissioner’s Office suggests that the majority in the UK are concerned about how others use their personal data. This general concern, plus the following likely developments, will see data protection and privacy issues remaining high on the agenda in 2008:
o the UK government announcing the outcome of its review on data sharing;
o more scandals involving theft and accidental disclosure of personal data by the private and public sectors;
o the Information Commission getting new investigatory powers in the wake of the HM Revenue & Customs fiasco involving the loss of 25 million child benefit records – in anticipation of these new powers, 2008 will be a good time for organisations holding large amounts of personal data to review and tighten their security and data protection policies and procedures.

• Free and open source software will be increasingly recognised as a credible alternative to ‘proprietary’ software, both in businesses and at home.

• Online office applications will emerge that are serious competitors to their software equivalents, with the developers of such applications releasing ‘enterprise’ editions. At a cost, these will deal with the concerns that businesses have with using such applications, such as service levels and document security.

Finally, in a prediction that will delight many (if it were to come true), FaceBook will cease to be mentioned in every sentence used in technology circles.

From Maitland Kalton, English solicitor and New York attorney, who founded niche technology firm Kaltons.

Technology that does not stand out, that sooner melts into the background and yet powerfully facilitates business and human interaction is what I see for the coming year and beyond; an expansion of the connectivity seen in the explosion of social network sites; technology that mimics how humans like to work with each other even when we do so online.  In essence, technology that facilitates effective interpersonal relationships, that allows a business to demonstrate its understanding of its customers through truly considerate technology that serves the customer, that shows the business is interested in them and is not simply there to keep them at bay.