The catch-phrase ‘data is the new oil’ is a tempting one to adopt and re-use readily, and indeed, superficially it seems to be a true and wise quotation. However, the theory may not stand up to scrutiny when examined thoroughly.
Oil
The truth of the phrase, which is sometimes quoted as ‘big data is the new big oil’ is obviously a nod to the massive oil industry which grew up very quickly, almost overnight, with the discovery of good quantities of oil. For those lucky souls who discovered oil in their back yards it was a miraculous change in fortune, from average everyday people to multimillionaire in a week or less, and from that point of view a similarity can be drawn: data may be the basis of riches for those lucky and smart enough to make the most of the opportunities available.
Data
What is data, and how is it a commodity? Data is essentially information, bits and pieces or pages and pages of facts, figures, ideas and information. Data is not like oil in that it is not a finite resource, and nor does all data have or keep that same value. A gallon of oil will always have a value, albeit a slightly fluctuating one, but information must not only be relevant and up to date, it must be pertinent. A list of names and addresses, for example, will not hold value after five years, as the people will have moved away. The list may have been worth money a month or two after it was published, but after a year or so, will literally not be worth the paper it is printed on.
What is Big Data?
Big data simply refers to enormous amounts of data, particularly databases or datasets that have grown so immense that they are almost unwieldy and difficult to monitor. Big data will, of a necessity, always be computerised. It is only with the help of automated filters and search criteria that anyone will be able to make good use of big data.
Using Big Data to Save Time
One way that data can earn money is by using information stored to predict the potential for extra sales. For example, if someone wants to buy washing powder, analysts can use the pattern of past sales, for millions of customers over a long period of time, to see that when people buy washing powder, a great deal of them also buy fabric softener. Bleach may also be a common purchase linked to washing powder. Thus, store layouts can be changed to put the washing close to the softener and the bleach; thereby tempting the purchaser into picking up all three items instead of the one they actually need, but still only taking the same amount of time as before. Online shopping already is geared this way, as evidenced by the helpful sidebars that state ‘People who bought this item, also looked at…’ This process is responsible for many extra sales that would have been missed completely without the information gleaned from the mass of data.
Using Big Data for Analytics
At the moment, market research and knowledge of trends is a slow and cumbersome process. RFID chips embedded into shopping trolleys or store loyalty cards will make it possible in the future to track a consumer’s progress around a store, noting items that are looked at, but not selected against those that are. This gathered data will build into a useful picture, enabling executives to pinpoint the most and least successful products. The ability to quickly and easily make changes to boost profitability can make an enormous difference; even the difference between a small or medium size operation being successful or going out of business.
Storing Big Data
The world is slowly but surely moving onto the Cloud and as the process is tested and found to be secure, it is certain that eventually almost all companies will make use of cloud technology to store information and data. There is a hope that as technology continues to develop at near light speed, databases will be more compact and not require so much cyber space, but it may be that more variables are taken into account to use up the newly freed space. Companies skilled in data management and storage are sure to be winners, if they can establish secure servers, with excellent speeds and availability they could potentially earn billions from the industry.
To summarise: is data the new oil? The truest answer, unsatisfactory though it may be is: Maybe! It is like the ‘new oil’ in that it is a potential money-spinner, and the profits that could be gained are enormous, for something that is not made or created by those profiting from it. However data cannot truly be owned, like oil can, and data is the ultimate renewal resource, something that it is possible to sell, and yet still retain. However the value of data is perishable, unlike ageless oil, and can become obsolete. Another difference is the comparison is that different pieces of data can hold hugely different facts and figures, whereas oil is oil! Perhaps it would be better to leave the word oil out of the phrase and modify it to a simple ‘Data is the next big thing.’ It is possible, that as the industry develops, adapts and grows that we may have to invent an entirely new vocabulary to deal with this infant commodity and its enormous potential.