The Age Of Data Wars Dawns

In 2020, the annual amount of digital data created, replicated and consumed will total more than 5,200 gigabytes for every man, woman and child on the planet, according to a new International Data Corp. report. That’s 50 times the amount of per-person data than in 2010.

Once it’s consumed, almost all of the rough information today effectively vanishes in the overall ocean of data. Yet within the data are tidbits of facts on customers, suppliers and business operations that, if linked, could prove useful or even profitable. Seeing the potential, some businesses are sizing up the trove – the data they control and other’s.

We are on the cusp of the data wars.

Developing high-value, competitive information from one’s own data will be expensive enough, but a lot of data that today is shared like almost-interesting dross will command a price. Formidable data walls will separate foe and ally alike.

Consumers will try to wall off their data too. As the value of their personal data rises, they will demand more compensation in the form of services if nothing else. This will open up new avenues of competition between companies.

Early Skirmishes Among Online Firms

Internet companies are becoming ever more protective of (some would say paranoid about) their customers’ data, keeping it from competitors. This month, Instagram, which is owned by Facebook, took steps to prevent photo-sharing on Twitter. Facebook and Google have been scuffling over data sharing for two years.

Because member information is the lifeblood of these ad-serving companies, it is at the forefront of this battle. Where once data was hoarded to appease a firm’s chief counsel or government regulators, it has an intrinsic value in predicting market trends and finding hidden inefficiencies.

As a result, virtually all industries see data-sharing policies tightening and pay walls becoming more common.

Data As Currency

Dave Reinsel, an IDC analyst and co-author of the EMC-sponsored “Big Data” report, said, "Anytime you have a form of currency [in this case, data], you start to find behavior like this. People begin to collect it. They begin to associate value with it."

Consumers, for example, may ignore the pact they sign with an online business that gives it the right to trade their information, but the business doesn’t. When you join Facebook, for free, the social network sells your personal information. You get to use Facebook, and your use generates more data for Facebook to sell. The same deal exists between account holders and Twitter, Google and uncounted others.

These companies have lots of leeway in the use of this data, but that is changing as people stake claims on their data. The European Union has adopted a "right to be forgotten" law that allows Europeans, at least, to permanently delete personal information from any site, assuming there’s no legitimate grounds to keep it.

Companies using Facebook today to interact with customers are expected to start building their own social networks in order to keep all the accumulated data for themselves. Businesses in the same industry could form consortiums to combine data in order to define industry-wide trends. Innovative models of collaboration based on data are expected to arise between companies to create new assets.

What's Needed?

Before many of these changes can take place, a lot needs to happen.

Today, 25% of the data floating about the digital universe might be valuable if analyzed, IDC says. Yet, only 0.5% of the universe is actually analyzed.

By 2020, IDC predicts a third of the data in the world will have value, but only if its tagged and then analyzed. Tagging data streaming from surveillance cameras, medical devices, social media and everyday transactions in a company's computers would be hard work, to grandly understate the idea, and would require a big investment (another sizeable understatement) in technology. Without it, that data gold will not be mined.

Companies are building the infrastructure necessary for data collection, analysis and the presentation of analytical results. IDC predicts spending will grow by 40% between this year and 2020, on the necessary hardware, software, services, telecommunications and staff.

Who knows? That might seem like a bargain when CEOs in 2020 sit down to count coup.