No longer just a means of maximising ad revenue, data is a market in itself – and we can put a value on it
Wall Street’s Gordon Gekko knew it in 1987: “The most valuable commodity I know of is information.” And there’s certainly enough of it out there. Market researcher IDC says that by 2025 data created will have reached 180ZB (zettabytes). “Data will be the ultimate externality: we will generate [digital trails] whatever we do,” Paul Sonderegger, a big data strategist at Oracle, told The Economist.
Putting a price on data is becoming easier. Companies such as Facebook, Microsoft and Google’s parent Alphabet have forked out huge sums to absorb or build on firms that have found new ways of capturing data, such as LinkedIn or WhatsApp.
And its importance hasn’t gone unnoticed: cyber crime is rising. Harvard Business Review (HBR) says cyber-crime costs are expected to hit $2tn by 2019. The cost to business is high enough to warrant inclusion of enterprise value data to soon become a requirement in corporate accounting. “This points to new EU regulations focused on identifying systemically important data institutions – an implicit recognition of the growing importance of data valuation,” says HBR.
Data, if managed well, could transform manufacturing, technologist Jim Norton told SM recently. One potential is to use data to turn products into service, such as selling the maintenance and servicing of a car when you sell it. “It’s hard to find a sector that you can’t transform from product to service,” he says.
Digital start-ups are finding ways to use this information and monetise it. Algorithms that monitor us as we tweet, share and ‘like’ are building up sophisticated images, giving site owners data on what we’re likely to buy and when. They can then sell this on to others for creative income-generating.
While we continue to engage online, data’s price, like all commodities in demand, will only rise.