Businesses throughout the world are rapidly becoming aware that their greatest commodity lies within the data they collect and store. The five most valuable listed companies in the world: Alphabet (Google’s parent firm), Amazon, Apple, Facebook and Microsoft benefit from a monopoly in this field and concerns within the tech industry have grown with regards to harnessing and sharing the wealth available. However, as the Economist has highlighted “Size alone is not a crime. The giants’ success has benefited consumers. Few want to live without Google’s search engine, Amazon’s one-day delivery or Facebook’s newsfeed. Nor do these firms raise the alarm when standard antitrust tests are applied”. What is more, new entrants in the form of apps and offline competitors are still able to make significant impacts and as such, the value of data may continue to rocket, but the potential to access and benefit does so too.
Growth and Value Increases in Data
Microsoft CEO, Satya Nadella, when speaking with the Irish Times explained, “When I joined the company in 1992, the total amount of internet traffic amounted to 100 gigabytes per day,” says Nadella. “Today 17.5 million times that much traffic is generated every second. Ninety per cent of all the data that has ever been created was generated in the last two years.” As swift developments are being seen in multiple areas of the tech industry, the speed at which data generation and value is expected to increase is extensive, with the Economist reporting that “some estimate that a self-driving car will generate 100 gigabytes per second”. This mammoth potential for businesses is almost immeasurable, with opportunities to expand into new areas and overall worth increasing substantially based upon the access to data that a company has.
The idea of snowballing potential for a firm is further demonstrated in the Economist report: “This abundance of data changes the nature of competition. Technology giants have always benefited from network effects: the more users Facebook signs up, the more attractive signing up becomes for others. With data there are extra network effects. By collecting more data, a firm has more scope to improve its products, which attracts more users, generating even more data, and so on. The more data Tesla gathers from its self-driving cars, the better it can make them at driving themselves—part of the reason the firm, which sold only 25,000 cars in the first quarter, is now worth more than GM, which sold 2.3m. Vast pools of data can thus act as protective moats.”
What does this mean for businesses?
1. A Requirement For Skilled Data Experts To Unlock Data Value
Data scientists are able to recognise the most valuable data held within a business, access it and through effective leverage, utilise the information to meet the needs of the firm. Stored data grows four times more quickly than the world economy according to Vcloud News and with spikes in everything from price comparison sites to healthy tracking apps, consumers continue to feed more data into the market, ready for businesses to harvest and make use of it.
Vcloud News reports that each day, 2.5 Quintillion bytes of data are created in a huge scope of industries. Many companies are yet to access the full value of the data they hold and unlocking this wealth of information can be key to securing longevity, fiscal security and business expansion. Investing in skilled and talented data scientists to mine through your records can be one of the most rewarding steps that a company takes in the digital age. Through utilising the skills of data scientists and statisticians, relevant and highly valuable data can be extracted and used in specific and bespoke ways as per your business’ needs.
2. A Handle On Data Security and Compliance
With the value of data being so high, it is imperative to protect your assets. By arranging an effective security and privacy plan for your firm, you will protect your data records, your customer’s confidence and your productivity. Furthermore, data breaches could result in fines to your business and will likely impede your ability to attract new customers.
Internationally, the value of data is widely recognised, with governments and authoritative bodies keen to ensure that data is as secure as possible. The General Data Protection Regulation (GDPR) is the regulatory information that was established by the European Parliament, the Council of the EU and the European Commission. The GDPR was set up to strengthen data security and offer a uniformed system for data protection for EU countries. The GDPR aims to extend this security to non-EU countries through “harmonisation of the data protection regulations throughout the EU, thereby making it easier for non-European companies to comply with these regulations; however, this comes at the cost of a strict data protection compliance regime with severe penalties of up to 4% of worldwide turnover.” These laws will be implemented within the coming year and businesses must be informed and ready to react to the changes in order to remain compliant and as secure as possible.
Data is the oil of the 21st century. Biggest players have market capitalisations that exceed those of the oil companies – the top 5 made over $25bn in net profit in the first quarter of 2017. This surging value (and volume) of data means that all businesses need to ensure their data governance is fully compliant and to maximise the value from this data they need the right people mining the data. Those who extract maximum value from the data they collect have proven not only huge rewards (Amazon captures half of ALL dollars spent online in America), but also enormous competitive advantage.
If you want to find out more about how to manage, mine and protect your data, come and talk to us: firstname.lastname@example.org