The idea is to provide a resourceful community, as well as a “gamification” service that incentivizes better health. Users can do things like set up and track fitness goals and get SMS reminders to take medication.

The Careverge site is a product of Audax Health, a Washington, D.C.-based company that has raised $16 million from investors including New Leaf Ventures, TIAA-CREF CEO Roger Ferguson, former Aetna CEO Jack Rowe and former Apple CEO John Sculley.

Audax CEO Grant Verstandig said he believes Careverge is the first social network to receive HIPAA compliance, indicating a high level of security for users’ personal health data.

Verstandig, 22, dropped out of Brown University to found Audax, after seven knee surgeries effectively ended his career as a lacrosse player.

His business plan is to make money from health insurers, who give their customers promo codes to sign up for Careverge anonymously, in return for deductions on premiums.

Insurers receive anonymized information about their members, with the intent of reducing costs by having healthier customers. The behavioral-health-focused ValueOptions is one such client.

The trick will be getting users to buy into Careverge’s privacy and security controls. It does seem a little odd to sign up for a site at the invitation of your insurance provider, and trust that your insurance provider doesn’t get to track your participation.

Verstandig said Careverge users can opt to share some of their identifiable information with their insurer at their own discretion; for instance, one Careverge customer invited its members to opt in to get a coupon for a free flu shot.

Audax is already a sizeable company of 53 people, and is raising more funding now, Verstandig said.

If the online industry wants to avoid government restriction, it must regulate itself. This is a good time to explore other attempts at industry self-regulation and its effects. Some self-regulatory efforts have been bureaucratic at best, while others have been completely ineffective. The medical industry’s most recent self-regulatory effort in the name of consumer protection around the HIPAA privacy law, is an example of good intentions spoiled by bureaucratic enforcement. It was actually reported in the New York Times that birthday parties in nursing homes in some states have been canceled for fear that revealing a resident’s date of birth could be a violation of the HIPAA law.

Other industry self-regulation attempts, like the Tobacco Industry’s “We Card” program, have been pointless. The program did little, if anything, to curb tobacco sales. When looking for a self-regulatory success story, the online industry should follow the example of the Motion Picture Association of America (MPAA).

Looking back at the history of Hollywood, there are similarities between the online ad industry today and the censorship of the film industry in the 1930s. In response to the threat of government intervention in 1930, the movie industry created a regulatory system around a “code of conduct” known as the Hays Code. The code was a set of restrictions on the content filmmakers could produce. The Hays Code was written with conservative and religious principles in mind, with restrictive clauses such as, “the clergy cannot be portrayed as comic characters or villains.” When the Hays Code came under scrutiny in the late 1960s for its strict rules and infringement on free speech, the industry ultimately dismantled it and created our current rating system.

A voluntary “code of conduct” is exactly what the Department of Commerce Internet Privacy Task Force is asking the online industry to create, and what industry trade groups are also espousing. What is most applicable to the online industry is the fact that the self-regulatory system the MPAA created and still uses today puts the user in charge of deciding what they are going to see.

The user-in-charge system is a concept that Apple’s Steve Jobs relates to. When asked to weigh in on the privacy issue at the recent D8 conference, he said, “Privacy means people know what they are signing up for in plain English. Some people want to share more data. Ask them. Ask them every time. Let them know precisely what you are going to do with their data.”

With the online world becoming more social than ever, user data is central to advertisers. Online marketers are no longer content with abstract metrics like clicks or impressions. They want to find out about individuals to give them a personalized experience. However, if advertisers want access to consumer data it should be done in a privacy-compliant way. This means the online ad the industry must develop clearer privacy practices and give users the ability to opt in to receive ads.

And as a start, users must be shown a clear way to opt out. For this reason, the issue of online privacy can’t be relegated to the legal team. The issue should be resolved by people who can design a user interface that is elegant, simple and crystal clear. The design and user interface teams must be involved at every step in the process so as to provide users with clear and transparent mechanisms to help them understand what data will be collected, what will be done with the data and how they can opt out of data sharing altogether.

If the industry wants to self-regulate to avoid being federally regulated, it should start by designing a clear, opt-in system that puts the user in charge. Let’s not wait for a giant carrot or a big stick. Self-regulation has worked before–there’s no reason it can’t happen now.

Tucker is a 13-year veteran of Sun Microsystems whose last job was as Sun’s CTO of cloud computing. He was also VP of the AppExchange at Salesforce.com. He’s also known for “Lew’s Law,” which he describes as more of an informal observation about how far the cost of computing can realistically fall.

I caught up with him last week in New York City to talk about what Cisco, long the powerhouse of networking, plans to do in the cloud.

NewEnterprise: First off, what is Lew’s Law?

Lew Tucker: It’s just an observation, not a real law, that the price of computing will never be free, because it requires energy to compute. Computing is really about changing the state of physical bits, and that requires energy. It’s great that we’re driving the costs down. Moore’s Law is hammering the costs. But there is a lower limit. Right now the dominant cost is around managing software, operations and everything else. So we can take a lot of those costs out through automation.

NewEnterprise: When I think of Cisco I think of industrial-strength routers and switches. How do you get from there to cloud computing?

LT: Eight months ago I thought the same thing. I was with Sun for many years and then left to go to Salesforce.com to do software as a service. I became very enamored of the Salesforce model. I came back to Sun to build the Sun Cloud, which was to be a direct competitor to Amazon Web Services. I was an Amazon user myself and I loved how you could so easily spin up as many servers as you wanted without having to buy them, configure them and so on. Building a cloud is another thing entirely. When Cisco called me, I said to them, “You’re about routers and switches and I’m all about complex distributed computing systems.” And Cisco said they were really about networking and making distributed systems. I started digging into it and realized there was a really unique position at Cisco if you think of cloud computing as a fully automated system with different elements. Some of those are networking elements, and some of those are integrated boxes with computing and storage and networking all in one. Some are networking services.

NewEnterprise: When you think about how cloud computing works, you really can’t do anything without fast connections between one system or another, which is something that Cisco knows very well.

LT: The network has always been a shared piece of infrastructure. There are a lot of different applications running on different servers that are trying to reach either each other or their endpoints. So there’s an awful lot that’s going into the network to make that happen in a fair and efficient way.

NewEnterprise: So what hardware is Cisco building here?

LT: We build pre-integrated compute, storage and networking that we’re calling our Unified Computing Systems. You can buy a rack of these systems, and they’re driven by a set of APIs [application programming interfaces]. We’re not alone in that. Hewlett-Packard does something similar. Then the customers add in their own preferred storage environment, like EMC or NetApp, or they can build their own.

NewEnterprise: What kind of use cases are you seeing in companies? What are your customers asking for right now?

LT: Right now what they are asking about is collaboration services, the integration of video and voice and calendaring and messaging. We’ve seen consumer services like Facebook change what people expect at the office. We have a collaboration product called Quad that looks just like Facebook. WebEx is a Cisco service. We’re working on offering that as both a hosted form and one that runs inside the customer’s own environment.

NewEnterprise: So there are a lot of cloud providers out there already–Amazon, Google and Microsoft, which has its Azure platform. They’ve already deployed their services and have relationships with vendors. How do you see the market shaping up, and what is Cisco’s place in it?

LT: I think there’s going to be two or three large cloud providers, but then there will be many smaller ones who specialize in delivering specialized services. Take health care. In that industry, groups of companies are going to get together and offer a HIPAA-compliant cloud. You’ll also see something similar happen around financial services. Those are two industries that have very specific needs. The cloud will be dominated by a few large providers for sure, but there will also be many specialty cloud providers.

NewEnterprise: You’ve been on the job about six months. What have you learned so far?

LT: I’ve learned that there’s an amazing amount of technology within Cisco. It has the largest concentration of network engineers in the world. Part of my job is to go and align our products and roadmaps with this future world that we’re moving into and to uncover a lot of the new approaches to how we solve different networking problems. I’m an engineer, and I like nothing better than being in a room with a bunch of other engineers with a whiteboard as they all battle it out. I’ve also learned that building cloud infrastructure is a lot harder than everyone thought.

Who: Ben Zotto, lead everything (it’s a one-man shop).

Ben was at Microsoft and worked for Xoopit, the email-enhancement start-up acquired by Yahoo (YHOO).

What: Ben’s Penultimate brings a Moleskine notebook-style user interface to the iPad. He just released an update that allows you to rest your palm on the screen while writing, the same way you might with a pad and paper.

Why: It has been in the top tier of the Apple (AAPL) App Store for weeks.

Where: cocoabox.com (Web site); @cocoabox (Twitter); San Francisco (analog place)

Who Else: Apps like PaperDesk and Idea Boards use the pen-and-surface interface. Penultimate does drawing a little differently, though. Ben says it’s about the ink.

Five Stats You Won’t Find in His Facebook Profile:

Worst Job: I’ve been pretty privileged. I was a short-term photocopy runner for the Junior World Ice Hockey Championships in Geneva when I was in my teens. It wasn’t bad, but I don’t suppose it played to all of my strengths.

School Days: I grew up in Boston, but we moved to Switzerland during my high school days. I left eighth grade in Massachusetts, maybe never before having left the state. And within a month of arriving in Geneva, we were on a history class trip to Florence. It was awesome.

Geek Crush: There are a lot of guys from my Microsoft (MSFT) days who are my programming heroes. Guys like Tracy Sharpe and Dinarte Morais. I’m also a big fan of Wil Shipley.

It’s something about his combination of making beautiful and functional software and being fiercely independent–you know, a coffee shop denizen–that I’m attracted to. I actually found the designer I worked with on Penultimate through him.

Gadget Freak: I don’t carry a lot of gadgets. I am pretty picky about my work set-up, though. I use an Apple extended keyboard from the 1980s with the heavy-duty key switches that I rescued off eBay (EBAY) and the Microsoft optical IntelliMouse, which is, for my money, the best mouse developed so far.

Early Internet Memory: Right after I moved to Switzerland, I had a friend back in Boston who would email me. It was probably 1992, so it wasn’t really email. He found some dial-up number at MIT that had an open gateway.

It wasn’t obvious then how you would send an email to an internal address where my dad worked. It was one of those early u-u gateway/bang-this/bang-that things. He finally figured out how to get it to work, and my dad’s secretary would print out these letters from my friend Micah back in Boston.

That was how I heard the news from Massachusetts for a little while. Micah is a recent recipient of a Ph.D in computer science from UPenn. Not a fool.

Bio in 140 Characters

Ben had an international childhood. He has worked at Microsoft, Xoopit and Yahoo. He writes software that he hopes is beautiful and useful.

The Five Questions

How long have you been developing Penultimate? Why is it a killer app when so many others don’t seem to be?

Originally, I developed an app called Handwriting for the iPhone. There was potential there, with the touchscreen, to give a personal touch to messages through handwriting that wasn’t there before. For that reason, I spent a lot of time working on the graphics math for the ink.

I wanted the input to really resemble the handwriting of the user. It turns out that getting digital ink to look real is a really subtle thing. I spent a lot of time getting it to move right, getting it to feel smooth and whatnot. I finally got it where I was happy with it.

I released the app and basically, nobody bought it.

People responded well, but I realized that anyone who used the app would only use the surface that they could see within the bounds of the iPhone screen, even though I made it so that you could scroll around easily to get a bigger surface for writing.

Size was clearly an issue.

The iPad coming out meant that all of a sudden something that was just more of a single tool like handwriting could be scaled up into an app with real uses, and all it took was more screen real estate.

Steve Jobs, in his iPad release presentation, said that if they’d added a stylus, they’d have gotten it wrong. Does the success of your app fly in the face of that vision?

It’s funny, I’d never heard that until now. I didn’t watch that speech.

When the iPad came out, I got this vision of doctors walking around making notes, and it looked like there would be lots of use cases where a keyboard just wasn’t ideal.

People would need to input info standing up, while moving and in portrait mode. From the pictures, it wasn’t clear the keyboard would be great for that.

I developed Handwriting and Penultimate to be used with your finger, and that’s how I use them most. And I think Apple has good reasons for not pushing that. They could have developed handwriting recognition, but for them, that draws away from what they are really trying to sell.

Handwriting recognition is really hard, and as soon as you do that and say you are going to do it with a finger, you have people saying, “Why doesn’t this thing recognize my handwriting better?”–instead of marveling at all the amazing things you can do with the platform.

Have you faced issues from Apple, developing a popular app that goes a little against the grain?

I’ve heard complaints about the App Store, but I’ve had a pretty good experience so far. It usually takes them about 48 hours to approve updates for my stuff. That said, there are some hardware things I’ve run into.

A big one is trying to get palm rejection in my app so that you can place your hand on the screen to write and not have it register as a touch.

On the iPad, Apple doesn’t expose those drivers to developers. On the MacBook, for instance, you can hook in the driver and get all the data–the width of the touch, rotation, everything.

All that is closed off for the iPad, so getting the natural handwriting position has been really challenging. I’m playing with that right now because it’s been one of the loudest requests.

You are embracing this use case that Apple seems to wish wasn’t there. What other requests are you getting from users who want to be able to write on their iPads?

I think form-filling is a big one. There are apps that do that, but their ink technology isn’t as good as mine, which is why I think I get those requests even though there are other apps in the field.

I got this great email from the head of a police department, who said that out in the field there are all these forms he has to fill, and he wants to take them with him and not have to bring paper.

There are all kinds. I got mail from a roofing contractor who wants to be able to snap his drawn lines to a grid to draw quick plans.

I’ve got friends who are doctors who think it’s a great idea, but say they could never use it because of HIPAA.

There seems to really be a lot of uses for being able to write by hand and make notes in this very natural way.

You worked in regular software before you did this. What is fundamentally different about developing for this platform? What are people missing about that?

I think a big difference today is that people expect updates much faster than before. It’s fundamentally different than shrink-wrapped software world, where you would spend lots of time making and refining a product, packaging it and shipping it out.

Today, people expect to see some kind of update or fix every couple of weeks and they expect them to be free. If you don’t issue an update for a while, people might begin to think you are dead.

Because the mobile platform apps are these single-use things, there is a perception that they are smaller or more simple and that therefore there is an entitlement to future updates. It’s great for users but really hard for developers.

There’s this ever-present question: “How much software is ‘three dollars worth’?”

The In Living Color Interview