Data: The Uncommon Commodity
Data is an extremely prevalent commodity, being produced by every person on the planet, as well as machines and devices. But as the scale of data increases, it’s value only increases - a an extremely rare occurrence that defies the preconceived notions of a supply and demand system of commodities. In fact, the IDC says that we’ll create and copy 180 zettabytes of data by the year 2020.
But it’s important to make the connection between these oceans of data and their true value to businesses and industries. After all, data without purpose isn’t really data at all. Data is inherently valuable - at least to the right person.
How Your Data Creates Value for Your Business
Companies around the world are certainly finding ways to make data valuable. And the data they collect in turn makes their company more valuable. Consider Tesla, for example. Tesla as a car manufacturer moves far fewer cars than Ford, but is valued at just under $48 billion dollars. Despite moving hundreds of thousands more units than Tesla each year and owning a large portion of the auto industry worldwide, Ford is worth $45 billion. How is this possible?
Much of the explanation is data. Tesla possesses 1.3 billion miles-worth of driving data, giving the company an incredible advantage over all-comers in the next phase of the automotive industry, which is a move towards self-driving cars. Despite having a fraction of the production capacity of Ford and GM, despite a 3-year wait on some models of cars, Tesla’s immense trove of data makes it more valuable than a perennial power of the American automotive industry.
Another excellent example of data adding value to a company is Facebook. The social media platform is worth just under $434 billion dollars. But they offer a free service to users - so how could the company possibly be worth hundreds of billions of dollars?
Facebook has 1.94 billion monthly active users as of March 2017. With every Like, comment, article click and new friend request, Facebook learns more about specific user's’ interests, habits, and spending potential. To marketers, this information allows them to run highly-targeted campaigns to Facebook’s users to ensure high conversion rates and even bigger profits than ever before. Facebook’s ad revenue from Q4 2016 should tell you something about the value of data - they made $8.81 in revenue in Q4 2016 alone.
After considering these examples, it's worth changing your thinking about your data's value to your business. Want to make your data an asset that increases your company's assets while streamlining decisions-making processes? Let's get in touch.