The Rise of Data Capital
“For most companies, their data is their single biggest asset.
Many CEOs in the Fortune 500 don’t fully appreciate this fact.”
– Andrew W. Lo, Director, MIT Laboratory for Financial Engineering
“Computing hardware used to be a capital asset, while data wasn’t thought of as an asset in the same way.
Now, hardware is becoming a service people buy in real time, and the lasting asset is the data.”
– Erik Brynjolfsson, Director, MIT Initiative on the Digital Economy
Data is now a form of capital, on the same level as financial capital in terms of generating new digital products and services.
This development has implications for every company’s competitive strategy, as well as for the computing architecture that supports it.
Contrary to conventional wisdom, data is not an abundant resource. Instead, it is composed of a huge variety of scarce, often unique, pieces of captured information. Just as retailers can’t enter new markets without the necessary financing, they can’t create new pricing algorithms without the data to feed them. In nearly all industries, companies are in a race to create unique stocks of data capital and ways of using it before their rivals outmaneuver them. Firms that have yet to see data as a raw material are at risk.
The vast diversity of data captured and the decisions and actions that use that data require a new computing architecture that includes three key characteristics: data equality, liquidity, and security. The pursuit of these characteristics drives the reinvention of enterprise computing into a set of services that are easier to buy and use. Some will be delivered over the Internet as public cloud services. Some corporate data centers will be reconfigured as private clouds. Both must work together.
New capabilities based on this new architecture, such as data-driven tailoring of products and services, will yield not only radical improvements in operational effectiveness, but also new sources of competitive advantage.
Data Equality
Data has a shape. For the past 40 years, the most common shape has been the rectangular table of the relational database. Its familiar row-and-column structure has been a powerful way to capture selected observations about the real world, with broad applicability and economical use of computing resources. But this reductionist approach to creating data is now being supplanted by an expansionist approach. We don’t want just selected observations of the world; we want the whole thing.
Data Liquidity
However, data equality creates new problems. With a greater diversity of data feeding a greater variety of algorithms, analytics, and applications, the need to convert data from one shape to another skyrockets. The answer is data liquidity—the ability to get the data you want into the shape you need with minimal time, cost, and risk.
Data Security and Governance
The challenge of every chief data officer is to maximize value creation from a company’s data capital while ensuring that its use complies with applicable policies, regulations, and laws. Security, and its constant partner, governance, are necessary checks on data liquidity. A data-centric approach to security still incorporates traditional tactics such as hardening the perimeter. But it also recognizes the realities of data capital. Data doesn’t sit still; it moves around. It gets used in different systems, by different people both inside and outside the enterprise.
NB: LOOKING AHEAD
Experts predict that data’s importance treated as a service. Some companies already create ways for applications to grab data on demand for the tasks they automate. These application programming interfaces, or APIs, cut the cost of using existing stocks of data capital in new ways, increasing the potential value of data. will only continue to grow. The Internet of Things (IoT) will connect 6.4 billion devices worldwide in 2016 and exceed 20 billion intelligent, connected things by 2020, according to Gartner Inc. These devices are generating more and more data, Brynjolfsson notes. “Software is being embedded in more and more products, from autos to television to prescription medications,” he says. “They’re all generating data. That creates opportunities to analyze data, and that data analysis creates value.”
How to Start—and How Oracle Can Help
Generating return from data capital is not simply a matter of adding new technology to the enterprise. It’s a question of integrating that technology with the existing enterprise architecture to create sustainable competitive advantage. Oracle’s comprehensive portfolio of big-data solutions, built on a hybrid cloud architecture, can help drive the competitive strategy and business value described in this paper.
Other companies have begun exploring the potential value of their own data capital by using Oracle Big Data Discovery running on the Oracle Big Data Appliance with Cloudera Hadoop to create internal data marketplaces. That same Hadoop cluster can also play host to Oracle R Advanced Analytics for Hadoop, a version of the popular opensource statistical package modified to take advantage of enterprise-scale computing resources.
Big-data integration technologies such as Oracle GoldenGate for Big Data make it easier and faster to expand the stock of data capital in the big-data management system. And tools such as Oracle Data Integrator for Big Data speed up and simplify the process of reshaping diverse data for a variety of endpoint algorithms, analytics, and applications.
Bottom line: If you demand to know the full value of your data capital before investing in it, you’ll find some of that value fading away. So whether you’re just beginning to bring these technologies into the business or looking to make them business as usual, don’t hesitate to take the next step.
In conclusion the rise of data is here to stay, and this the time for organization to take full advantage of this gold mine and use it to bring change in the manner which they do business, by making the consumer’s life much easier and change the game of monopoly, capitalism, and bring about the realisation of an ever-advancing civilisation; “Data is now a kind of Capital, and Capital is the lifeblood of any business..”
AUTHOR: L SKHOSANA-CEO GAMA IT SOLUTIONS-RSA
MIT TECHNOLOGY REVIEW CUSTOM
Produced in partnership with
www.oracle.com/bigdata
