In probably the biggest open source acquisition ever, IBM announced that it has acquired Red Hat for $34 billion on Sunday. This is consistent with the trend of Silicon Valley giants’ increasing appetite for growth.
The past few months also saw the emergence of the trillion dollar tech titans that has mesmerised even Wall Street. Apple and Amazon rose high in their stocks on their race to a $1 Trillion market cap with Google and Microsoft continuing to relentlessly chase that goal. Even though Facebook and Twitter stocks took heavy blows thanks to the controversies surrounding their platforms, they continue to be valued a lot higher than solid stocks in other industries.
Silicon Valley giants also acquired new companies and startups with the aim of capturing the market and coveted users. Microsoft acquired GitHub, and an AI startup Lobe; Alphabet, Google’s parent company helped GitLab raise $100 million in funding; Apple bought Shazam for an estimated $400 million; Cloudera and Hortonworks also merged to advance hybrid cloud development, Edge and Artificial Intelligence.
These investments and acquisitions are a clear indication that companies are collaborating together to further technical advancements. Microsoft’s acquisition is also a signal that the attitude of mature Silicon Valley giants towards open source has changed significantly in recent years. However, people fear, that this embracing of open source is more about business than about values. Billion dollar acquisitions don’t exactly scream ‘free and open software’. Some also say that such acquisitions give access to the acquired company’s user base which big companies are most interested in. This issue was again brought up when EU regulators started an investigation over the concern that Apple’s acquisition of Shazam would potentially give Apple an unfair advantage over its rivals such as Spotify.
This year has also been the year of questionable data harvesting practices and frequent and massive data breaches across firms, each affecting millions of users, even as tech titans raced to the $1 trillion club. 2018 opened with Facebook’s Cambridge Analytica scandal, that used Facebook’s user data to influence votes in the UK and US. Moreover, 50M facebook user accounts were compromised, a multimillion-dollar ad fraud scheme secretly tracked Android phones and 500K Google+ accounts were compromised by an undisclosed bug.
In July, Timehop, a social media application also suffered a data breach with 21 million users’ data compromised. Just a few days ago, Cathay Pacific, a major Hong Kong based airlines, suffered a data breach affecting 9.4 million passengers. In September, Uber paid $148m over a data breach cover-up. Two weeks back, Pentagon also revealed a cybersecurity breach where hackers stole personal data of tens of thousands of military and civilian US Defense Department personnel.
All of these events have left many users and even developers jaded. This has led to a growing ‘techlash’ that is throwing its weight on the need for tech regulation in recent times. Tech regulation in its simplest sense means the tech industry cannot be trusted to regulate itself and there must an independent entity that oversees how tech companies behave. This regulatory body would have power to formulate and implement policies and penalize those that don’t comply.
Supporters of tech regulation argue that regulation can restore accountability and rebuild trust in tech. It will also make the conversation around the uses and abuses of technology more public while protecting citizens and software engineers. Tech regulation supporters also believe that regulation can bridge the gap between entrepreneurs, engineers and lawmakers.
Read more: 5 reasons government should regulate technology
However, tech regulation is not without pitfalls. Tech regulation may come at the cost of tech innovation. For example, user privacy and tech innovation are interlinked. Machine learning systems need more data to get better at their jobs. If more users choose to not share their data, the recommendations they get are likely to be generic at best or even irrelevant. Also, advertising revenue for tech companies might be hit by the limited opportunities to profile users. This could have adverse impact on companies’ ability to continue to innovate and provide free products for their users.
There is a need to strike a delicate balance to make privacy work practically. This is the conclusion the US senate has come to as it continues to meet with industry leaders, and privacy experts to understand how to protect consumer data privacy without crippling tech innovation. Moreover, companies may may game tech regulation policies by providing users with little choice. For example they could simply deprive users of their services, should they choose to not share their data with the company. This should also be kept in mind while formulating both tech regulatory bodies and policy frameworks.
Although data and security breaches are nasty tricks, they have been instrumental in opening the conversation around tech regulations and privacy policies, which if done right, may eventually make it a TREAT to users.
As for tech acquisitions, they are never what they seem to be. Not only do they vary from company to company, but also have complex factors at play – people, culture, market, timing among others. It would be unfair or naive to claim tech acquisitions as purely tricks or treats. The truth lies somewhere in shades of gray. One time is clear though, funding does make the world go round!
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