Two Reasons Not Every Business Needs to Be a Data Company

Loraine Lawson
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Six Details Your Big Data Provider Won't Tell You

Every company also needs to be a data company,” Leo Mirani, a reporter for the London-based Quartz, warned last fall.

I love that line, and once agreed. But in the past few months, I’ve had cause to rethink that premise and have decided that it’s not true for two reasons.

First, it ignores the ugly truth that not every company can be a data company. Everyone loves a success story, especially start-ups and vendors, so you don’t often hear about the failures. Companies that waste time and money trying to squeeze value from Big Data or other data projects don’t hire PR firms to put out press releases. But these stories exist, lurking in the subtext of data company success stories.

This GreenTechMedia story on utility data analytics is a good example. It’s a success story about start-up utility data analytics companies, but lurking among the unfathomably large market numbers and tech descriptions, our second story emerges:

That’s a critical capability for utilities that have been frustrated by past efforts to build an operational platform for putting their data to use, said Michael Allman, a former executive of Sempra Energy, the parent company of SDG&E and Southern California Gas, who joined Bit Stew as COO last month… “Companies have tried to do this for years, and have been unable to crack it,” said Allman.

I’m hearing some version of this story whenever I talk to startups or Big Data companies this year. The success story is “We’ve solved a problem,” but the subtext implies, “that companies have spent lots of time and money on without success.”

Of course, this failure/success isn’t unique to data; it’s the founding story of technology firms everywhere, which brings us to the other reason not every company needs to be a data company: New technology start-ups are specializing in niche applications of Big Data analytics to business problems.

The GreenTechMedia article highlights two such startups, Space-Time Insight and Bit Stew. These companies have done the tough integration and data analytics works for specific, common business problems. So, utilities can buy their solutions rather than build their own and find success in days, rather than failure in months.

The article notes that they aren’t trying to solve every data problem a utility might have, but rather, the expensive and hard network grid (read: Big Data, Internet of Things) problems that utilities can’t solve. So you might even say they’re providing a new economy utility for old economy utilities. And GreenTechMedia rightly predicts this could work for other industries:

This, in turn, could serve as the launching pad for new analytics applications over time. In a utility data landscape that’s changing so quickly, this approach could well provide a model for the rest of the industry to follow.

Data Management

A few months ago, I learned of a local start-up called RowdMap that does something similar with open health care data. The owners had data backgrounds working with data at large corporations. Since smaller providers lacked these skills, they were able to use the government’s open health care data sets, applied analytics and some visualization to address common health care business problems, then bundle it as a solution.

So, we may find that not every company will need to hire a data scientist or become a data company.

I’d like to make one final point. While I contend that not every company needs to be a data company, that doesn’t mean Big Data and analytics are hype. On the contrary, these success stories show that Big Data and analytics are so significant that they’ll create new, profitable business opportunities.

So, while organizations may not have to run a data company, one way or another, every company will be data-driven.

Loraine Lawson is a veteran technology reporter and blogger. She currently writes the Integration blog for IT Business Edge, which covers all aspects of integration technology, including data governance and best practices. She has also covered IT/Business Alignment and IT Security for IT Business Edge. Before becoming a freelance writer, Lawson worked at TechRepublic as a site editor and writer, covering mobile, IT management, IT security and other technology trends. Previously, she was a webmaster at the Kentucky Transportation Cabinet and a newspaper journalist. Follow Lawson at Google+ and on Twitter.

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