Cloud

In the ’90s, Dan Kohn brought retail to the web. Now he has another big idea.

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On an August afternoon in 1994, 21-year-old Dan Kohn was drinking champagne and celebrating with his colleagues in a house in Nashua, New Hampshire. The happy occasion? They’d just received word that a man in Philadelphia had used his credit card to securely buy a CD—Sting’s “Ten Summoner’s Tales”—on the internet.

That doesn’t seem like much of a reason to celebrate today, when 80 percent of Americans make online purchases. But 24 years ago, such a transaction had never happened before, and it was a huge deal.

It was an especially big deal for Kohn and the other three—Roger Lee, Guy Haskin and Eiji Hirai—behind NetMarket, the online marketplace that brokered the historic CD sale. Other, larger organizations were working to automate the data encryption of digital commercial transactions at the time, but, against the odds, the upstart group of recent college graduates had managed to beat them to it. With privacy for shoppers ensured, according to a New York Times story published the next day, the Internet was now officially open for business.

“Seeing our picture on the cover of the business section of the Times was crazy. I remember the next day being insane, all these journalists reaching out and the phones ringing off the hook,” Kohn, the company’s then-CEO, told IBM.

Dan Kohn, right, with NetMarket president Roger Lee in the 90s.

The team had spent months holed up in the house where they lived and worked to get their system up and running. Up until a day or two before the first purchase went through, though, they weren’t sure it was going to work. Soon after their fears were alleviated, Kohn bragged that even NSA agents couldn’t access their customer’s credit card number if they tried.

The key to their success was an encryption program called PGP, or Pretty Good Privacy. Developed by the computer security expert Philip Zimmerman, it was the first widely available program implementing public-key cryptography. While it was “incredibly tedious” to integrate PGP with a web server and client, Kohn said, the software was free and available for anyone to use. NetMarket’s secure transaction, he said, would not have been possible without it.

Six months after the founders of NetMarket celebrated their milestone, they sold the company. Kohn went on to work at a satellite venture, a venture capital firm, and several other startups. Today, as the head of the Cloud Native Computing Foundation (CNCF), Kohn is changing the way companies do business on the Internet yet again. And he’s doing it by advocating for the same spirit of technological collaboration that powered his history-making achievement in 1994.

As the vendor-neutral home for many of the fastest-growing projects on GitHub, including Kubernetes, Prometheus and Envoy, CNCF advances cloud native applications and services, allowing developers to collaborate around existing and to-be-developed open source technologies. IBM became one of the organization’s 28 founding members in 2015.

“What we’re trying to say is that you shouldn’t be locked into a single cloud provider or a single commercial software vendor. We’re saying that the underlying software that makes this all available should be open source and collaboratively developed,” Kohn said.

Developing applications remains a challenging undertaking, often requiring companies to assemble teams of experts that can integrate and maintain disparate technologies. CNCF technologies make that process easier. By shortening their development and deployment cycles and increasing their resiliency, companies can scale their online businesses faster. Major retailers, including eBay, Nordstrom, and JD.com, are among the nearly 300 CNCF members that are doing so.

“Our customers, partners, and investors have come to expect an unmatched online shopping experience. One key way we are able to deliver this is through a strong investment in open source technologies like Kubernetes, which is critical to our business infrastructure,” said Haifeng Liu, JD.com’s chief architect. “As a CNCF member, JD.com is able to guide and accelerate the development of major cloud native projects that we believe are critical to improving the retail experience in China.”

At 21, Kohn didn’t simply dream of selling CDs. He dreamed of fundamentally changing how retail worked.

“Were we really ambitious about this? Did we actually believe that huge amounts of how commerce took place was going to move from the existing model of retail stores and mail and telephone? Absolutely that was our vision,” he said.

Even today, in a world in which e-commerce is a hugely important part of retail, the vast majority of transactions occur in stores. But every day, millions of people go online and use their credit cards to buy things. All that started with NetMarket.

Kohn has big dreams for CNCF, too. But while some companies are barely one percent of the way on their cloud native journey while others are at 95 percent, Kohn said they’re at least headed in the right direction.

“It’s the future, and increasingly the present,” he said.

For more stories of industry transformation, download Industrious magazine.

Content Producer, IBM Industries

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