How Intellectual Property is Adapting to the Cloud

Cloud computing is no longer an alternative technology. The virtual distribution model of hosting has become so prevalent that it now stands abreast of the traditional, hardwired, legacy system. The 2014 State of the Cloud Report, released in April by RightScale based on interviews of IT professionals conducted two months earlier, revealed that the cloud is “reaching ubiquity,” with 94% of firms using some type of cloud application.

We’re not just in the age of the public cloud anymore, as is clear with the RightScale data. The research team found that 48% of organizations are either currently using or are developing strategies to deploy hybrid clouds. That information is consistent with a Gartner study released last year that forecast hybrid clouds would be adopted by just under 50% of enterprises by 2017 (although notably that latter statistic is specific to larger companies). Hybrid solutions have become popular because they combine the public and private cloud structures. What’s important to understand about the growth of cloud is that firms are trending toward types of systems that pay more attention to data isolation.

Regardless of that trend toward more sophisticated, privatized systems, the New York Times recently reported that public cloud has made an impact in terms of our notion of the ownership of ideas.

NYT: Intellectual Property and The Cloud

The Industrial Revolution changed the organization of the world, not just in terms of the process of mass manufacturing. In fact, mass manufacturing was primarily noteworthy because it made it easier to profit off of an idea. If an entrepreneur came up with a concept, machines were built to make that concept a reality (as encapsulated by the product) so that the idea could be spread to as many consumers as possible. Investors in all types of products were protected through intellectual property staples – trademark, copyright, and patent.

As Quentin Hardy of the New York Times reports, though, those protections may soon become irrelevant. The speed of the cloud and the cost-effectiveness of its broad and agile approach has allowed companies to integrate themselves with tools and code typically only accessible to developers in certain sectors. Because of this, products are becoming way more sophisticated. Hardy cited Chicago patent attorney Russell E. Levine, who said that carmakers used to concern themselves specifically with automotive parts – “the IP around brakes and exhaust systems” – but are now having to consider technological ownership of increasingly diverse systems.

Smartphones at the Center of Changing Landscape

Corporations that build smartphone technology are at the center of the current property battles. A phone containing cloud applications is interconnected with worldwide systems and built to work in the same way no matter where it is sold. Getting the correct permissions in place to meet the laws as solidly as possible is a difficult terrain for lawyers to maneuver.

Pamela Demain, the head of the Licensing Executives Society, a professional association, told Hardy that devices on which so many different software components converge are posing unforeseen difficulties, “with IP at the center of the development.”

Where Cloud Intellectual Property is Headed

Although the forecast by Demain certainly makes it sound like intellectual property is going strong, Hardy argues that will not be the case in the decades to come.

To consider the public clouds of the Internet elite – Amazon, Google, and Microsoft – each consist of more than a million servers (per each company’s leadership). A cloud is becoming its own specialized field, and many companies that have not yet created cloud systems may have difficulty catching up to the pack (just on the basis of capital expenditure, per Hardy). Expertise of cloud systems could be limited to a small pool of people.

The entire way that computing functions is being reshaped by broad worldwide distribution of servers. Ideas are advancing so rapidly, with competition fairly contained in some fields, that often companies decide patents are unnecessary and that revelations within them would do more harm than good.

Google, Amazon, and Microsoft are building clouds that have many proprietary components. Other providers lean in the direction of open-source, so that their systems don’t require any licensing fees and so that they can benefit from the input of a community of passionate developers.

An example of a huge company using open source is Hewlett-Packard. HP’s cloud head Bill Hilf said that open source is not just a socially driven development model but “a way to blow up the other guy.”

The Times piece argues that the world is accelerating toward a completely different framework. In September, Google, Facebook, Walmart, and other companies created a partnership with the mission to announce software upgrades several times daily (rather than a handful of times per decade, as was once the case). Beyond volume, the world will become particularly bizarre for intellectual property if the open source model wins, a movement whose fate is strengthened by the number of big players who promote it. Mark Zuckerberg of Facebook open sourced some of the company’s hardware three years ago. With the advent of 3-D printing, manufacturing parts is cheap and easy.

We could soon live in a world in which many of the component pieces are free.

The Road Ahead

Intellectual property is changing the playing field, with companies opting for speed as the ultimate priority with many of their projects. The public cloud is suited perfectly to outpace competition: Geoffrey Fox, PhD, of Indiana University told the American Association of Medical Colleges that cloud computing is often faster than a supercomputer. Superb Internet offers unmatched speed, combining InfiniBand technology with Solid State Drives (SSD), the latter alone doubling the processing rate of your cloud server.

By Kent Roberts

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