#5 – Data trading will rise to make data great again
Thanks to digitalization and growing deployment of IoT, enterprises are collecting increasing amounts of data and looking for ways to generate more value from it, both by making it available to other companies but also by in turn getting access to the data generated by others. One way to efficiently achieve this is through data trading. We believe there will increasingly be attempts to establish data trading markets where anonymized data can be exchanged. In 2018, we will see progress in technology enablers (e.g. blockchain, data mining etc.) and expect that enterprises will begin to put focus on how to adapt their business to the data economy era.
The concept of monetizing data is not new. In fact, it’s fundamental to the business models of technology giants such as Google and Facebook. However, as enterprises embark on the journey of digitalization, including deploying IoT, having a large amount of data available is no longer a privilege available only to the technology giants. As a result, both big and small enterprises are looking for ways to generate more value from the data they have as well as the data amassed by others.
One simple model that enterprises currently use is to form data exchange partnerships. An example is the in-car parcel delivery partnership between Volvo and PostNord, the Swedish postal service. However, establishing this kind of partnerships is complex and time-consuming, since each party must find a use case for their mutual benefit. Even then, the value generated is limited to that specific use case with that specific partner.
However, such collaborations are inspiring enterprises to realize that the data generated by their ‘things’ is potentially useful to other parties in ways not yet imagined. Furthermore, they in turn can benefit from data generated by others, assuming that it can be made available for them to access securely.
One way to efficiently extract value from data is through data trading. There will increasingly be attempts to establish data trading markets where anonymized data can be exchanged, similar to commodity spot markets. There are some early players in the data trading field. For example, Otonomo (an Israeli-based company) works in partnership with car manufacturers to provide a cloud-based data trading platform that enables car manufacturers and mobility providers to share, access, acquire and integrate vehicle data.
2018 will see accelerated activity from enablers of data trading, including:
- The application of blockchain to enable secure and autonomous data transactions between ‘things’;
- Data mining to enable insight discovery;
- Data exchange platforms to facilitate transactions;
- Data privacy policies aimed at improving public trust.
Enterprises will begin to consider aspects of their ‘connected’ business that should be adapted to fit into a data economy era – for example, the reliability of IoT connectivity, data storage/archiving methods, audit/traceability processes, and regulation compliance (e.g. GDPR).