Bad Things Happen to Good Companies: Failures that have Shaken Up the Tech World
If we were to point out the driving forces that could explain the increase in digitization across companies, the need to satisfy fussy customers would be on top of the list. As we’re all trying to get accustomed to seamless, data-driven customer experience, we tend to assume that the sun will always shine on businesses that offer exactly that.
But this is not a complete shot in the dark. The companies that are really shaking up the market, are the baby boomers of the digital age – the likes of Facebook, Twitter, Snapchat, Uber, and YouTube. They all offer products and services that are on-demand, data-smart and powered by machine learning. And it looks like those who are soon to become the next “unicorn companies” are taking a page out of their book – tech startups that promise to revolutionize our consuming and socializing habits even more.
Yet, despite the global trust that these startups have gained, recent headlines proved that threats to their business continuity remain the same no matter how cutting-edge your business is. Mistakes of others can be insightful, especially for the companies that are just starting to dabble with new technologies.
The importance buttoned up cybersecurity – Dyn cybersecurity soft spot
The scale of consequences of cybersecurity negligence will vary, depending on the business and the solutions that were implemented to prevent, mitigate and solve disruptions brought by a cyber-attack. On October 21, 2016, Internet users across the globe receive error messages followed by black screens, when they tried to log in to the popular online sites, including Twitter, Spotify, Netflix and many more.
The outage was caused by the DDoS (distributed denial-of-service attacks) attack on the Internet performance management company – Dyn (bought by Oracle in the year of the attack), that enables Internet traffic by translating the site’s domain name (URL) into the IP address.
The company disclosed that the attack had been orchestrated by the hackers who made use of a botnet created from “Internet of Things” devices such as cameras, residential gateways and baby monitors, which had been infected with Mirai malware. As a result, Dyn’s servers were flooded with users’ requests, both legitimate and illegitimate, leaving it unable to process them.
Whether they are hacktivists fighting for justice, angry gamers, or state-funded hackers it is critical for small and large companies to stay alerted about protection criteria and emerging cyber threats. In the case of a disaster, businesses, which rely on data, applications, and systems, are the most vulnerable.
The imperative of playing according to data protection and privacy rules – Facebook data scandal
Is Facebook too big to fail? A few weeks ago, pretty much everyone would agree, but the diminished company’s market- cap value suggest now something else. According to the Washington Post, in just a single day, Facebook lost “almost as much market-cap value as the company pulled in last year through advertising revenue.” The privacy of 50 million compromised users’ accounts, cost the giant around 50 billion dollars, when the whistleblower, Christopher Wylie, revealed that Facebook had been giving consulting firms like Cambridge Analytica access to users vulnerable data.
Wylie’s allegations were further supported, by a confession of Sandy Parakilas who had been employed as platform operations manager at Facebook, where he was responsible for policing data breaches by third-party software developers between 2011 and 2012. According to Parakilas, developers had complete freedom to harvest as much data as they needed, through apps similar to the one that was created by Aleksandr Kogan. Since the incident, the chief executive CEO – Mark Zuckerberg has buried his head in the sand and hasn’t been seen ever since. He reaction was criticized by many, including policymakers, investors, and fellow tech companies.
The Facebook scandal, is yet another incident to prove that data integrity and compliance with domestic and foreign regulatory requirements are essential for business continuity.
The concept of runaway data is not new, and if companies don’t recognize their subscriber’s autonomy it will always be a topic of conversation. And without a significant change of heart across all digitized sectors, companies will continue to be punished with grievous fees for data negligence. It only takes a little imagination to see how this can permanently force them out of the market.
According to Bloomberg, If FTC decides, that Facebook has violated terms of the consent decree, it might end up fining the company thousands of dollars a day per violation – which is more than enough to hamper its business continuity.
Lack of control over intelligent automation programs – YouTube programmed advertising troubles
According to the Economist Corporate Network (ECN) report based on the answers from the group of 500 + respondents, almost 70 % of those surveyed suspect that their business will soon be strongly or extremely affected by AI.
The transition towards more sophisticated and smarter solutions is changing the world of business right in front of our eyes. With intelligent machines performing tasks that once were ascribed to humans businesses have already started to feel the impacts of that change. And soon it will be even more obvious.
But automation tools, tools created by flawed humans, will also have imperfections that might be potentially disruptive to your organization. Companies, like KPMG remind us that enterprises who begin to rely on intelligent automation should also have well – defined program guidelines to help them abide regulatory and compliance guidelines, as well as eliminate all possible operational failures.
Google recently had to swallow a bitter pill that shook its business’s reputation when The Times reported that the content, promoting major US companies such as Verizon, Walmart and GSK, was found to be appearing next to YouTube videos that contained extremist views or promoted hate speech,
The scandal triggered an avalanche of blaming and shaming responses from various media outlets and revealed an ugly truth about the advertising in the digital age. The ads that were placed together with the disturbing content because the Google’s video sharing platform was using programming advertising (a form of intelligent automation), that would place ads online, based on proprietary algorithmic calculations that could only be tweaked by Google.
Although Google’s reputation has recovered since the embarrassing ads dispute, the incident had enough impact to put the company under scrutiny, which resulted in a series of demands from various companies including Vodafone, and Britain’s political parties who also had been affected.
The Google case study shows, that although autonomation is a powerful element of the advanced digital transition, it must be monitored, and complemented with clear guidelines to prevent damaging companies’ reputation.