Today's guest blog comes from Oracle's Big Data Strategist Paul Sonderegger.
Two weeks ago The Economist's cover article was about the data economy. It declared data the world’s most valuable resource and pointed out that “the five most valuable listed firms in the world” are data-heavy technology companies.
The Economist is not alone in marveling at both the value of data and how concentrated its benefits are. A recent Organization for Economic Cooperation and Development (OECD) paper showed that average productivity growth among the top 100 most productive manufacturers was 3.5%, while the rest of the entire market was at 0.5% The gap is even bigger in the services sector.
One of the things that helps this small group of firms consistently become more productive than their rivals is their creation and use of unique stocks of data capital. Data capital assets do not diffuse to rival firms.
This is a critical insight. If your whole data science team walks across the street to the competition, they take with them crucial experience to create better algorithms. But they can’t take your data, forcing the new algorithm to find its own fuel.
Is the data economy, then, destined to benefit only a few elite firms? No. Despite the landscape today, data trade and data liquidity will spread the benefits among more businesses.
Data trade, the buying and selling of data to create new businesses and streamline existing operations, has been going on for decades. Credit bureaus, for example, were early data traders, selling consumer financial data to assist banks’ lending decisions. But with new sources of data and demand to use it, data trade is exploding.
Oracle Data Cloud contains 5 billion global consumer profiles with 40,000 different attributes sourced from over 15 million websites. It also has 400 million business profiles and $3 trillion in consumer transactions. This data, originating with one group of firms, can be purchased by others to improve the efficiency of marketing dollars, better inform consumer product launches, or redesign social media publishing strategies.
The same old story about using more data to make better decisions gets a twist. Data created by one company gets used in another, in ways the first never imagined.
Data liquidity, getting the data you want into the shape you need for the task at hand, is an imperative for any company creating new digital products and services. But having data spread across diverse repositories, like Hadoop clusters and NoSQL, graph, and relational databases gets in the way. The pressure to use data in diverse algorithms, analytics and apps multiplies the problem exponentially.
Moving to the cloud is the fastest way to remove these barriers. But not all companies can instantly move all computing jobs to a public cloud. This is why Oracle offers a full range of Cloud at Customer machines, basically racks of Oracle’s cloud that run in your data center, fully managed by Oracle and with subscription pricing. No other technology company offers this.
The benefits of exploiting data capital to create competitive advantage are real, but highly concentrated today. Oracle’s reinvention of enterprise computing as a set of services that are easy to use and buy promises to bring these benefits to all firms, not just the global superstars.
Paul Sonderegger is Oracle’s Big Data Strategist and leads the company’s work on data capital. Prior to joining Oracle, he was Chief Strategist at Endeca, a discovery analytics company, and a Principal Analyst at Forrester Research. Paul has a Bachelor of Arts degree from Wake Forest University.
Keep up with the latest on the data capital economy and follow Paul on Twitter: @PaulSonderegger and LinkedIn: www.linkedin.com/in/paulsonderegger. Read his latest research with MIT, "The Rise of Data Capital" or join him on Wednesday June 28th for the Oracle Big Data Cloud Machine event with Cloudera and Intel.