Monday, March 15, 2010

Data is the New Oil

I'm sitting in my hotel room in Santa Clara at the Cloud Connect event. A conference focused on the future of business computing -- so what better a setting to discover that Facebook has passed Google as most-viewed site in US in past week. An amazing feat to say the least, but why? How did this come to be? How did in a little over six years an upstart manage to surpass Google?

To understand you really need to think what the PC era has done to information. In effect the PC revolution started what the Internet has super charged - Information Creation. Think about it, more information is now being creating in the time it takes me to write this post than was probably created between the time humans first figured out how to write up until the birth of the Internet.

But for the most part the majority of the information humankind has created has not been accessible. Most of this raw data or knowledge has been sitting in various silo's -- be it a library, a single desktop, a server, database or even data center. But recently something changed, the most successful companies of the last decade have discover how to tap into this raw data. These companies are better at analyzing, mining and using this mountain of data sitting "out there" -- turning a useless raw resource into something much more useful, Information.

Before you say anything, Yes I know I'm not the first to say this. In a 2006 post Michael Palmer wrote "Data is the new oil!" declaring "Data is just like crude. It’s valuable, but if unrefined it cannot really be used. It has to be changed into gas, plastic, chemicals, etc to create a valuable entity that drives profitable activity; so must data be broken down, analyzed for it to have value."

In the most simplistic terms Palmers post serves as a kind of Data manifesto directly outlining the reason why companies like Facebook, Twitter and Google will rule the next generation of computing. Not because they have more money, but instead because they have tapped into something much larger. They have figured out that those who can most effectively turn data into information will win.

Facebook & Twitter in a sense created the largest social analytics engine on the planet. They essentially know what we're thinking before we do. Using this raw data they can effectively predict trends and more importantly capitalize on these trends with the greatest of ease.

A recent article in the Economist puts the idea of data as power into perspective. "When the Sloan Digital Sky Survey started work in 2000, its telescope in New Mexico collected more data in its first few weeks than had been amassed in the entire history of astronomy. Now, a decade later, its archive contains a whopping 140 terabytes of information. A successor, the Large Synoptic Survey Telescope, due to come on stream in Chile in 2016, will acquire that quantity of data every five days."

The article goes on to point the use case "All these examples tell the same story: that the world contains an unimaginably vast amount of digital information which is getting ever vaster ever more rapidly. This makes it possible to do many things that previously could not be done: spot business trends, prevent diseases, combat crime and so on. Managed well, the data can be used to unlock new sources of economic value, provide fresh insights into science and hold governments to account."

Now just imagine anyone with a credit card given access to near limitless cloud computing resources. Yes, Data is the new Oil.

#DigitalNibbles Podcast Sponsored by Intel

If you would like to be a guest on the show, please get in touch.