How to Turn Open Data into Real Money

Four Steps to Ensure Your Big Data Investment Pays Off

I recently interviewed a technology start-up that claimed they were already profitable, with only a few clients and a few months out the door. I have no way to verify or deny that, but I can tell you this: The entire product is built around open data.

In fact, its founders adamantly refused to let me call it a technology company, which is just one of many reasons I’m not revealing its name.

“Our product is the data,” one VP repeatedly told me.

That’s a bit of a bold claim for a company based on government-released data and other open data sets. If it were really the data, and everybody has access to the data, then what’s the point?

Of course, the company isn’t really selling only the data. What it’s selling is a tool that lets health care companies leverage that data for business decisions. Its added value is to apply relevant business queries and nifty visualization to integrated, open datasets. Given how much time and effort companies spend doing that with their own data, you can see how that would be a money-making venture with open data.

The common caveat with open data is that it’s an unholy mess requiring time and money to clean up. I asked about that, and it seems that the health care open data sets are actually quite pristine compared to enterprise data.

I hope to hear more open data success stories in the coming year. The financial incentive is certainly there. McKinsey reports that open data could open up $3-5 trillion a year in additional economic value if applied in seven sectors: education, transportation, consumer products, electricity, consumer finance, health care and oil & gas.

Already, open data is “giving rise to hundreds of entrepreneurial businesses and helping established companies to segment markets, define new products and services, and improve the efficiency and effectiveness of operations,” the firm wrote in 2013.

How do organizations turn open datasets into cost savings and profit? The government IT site, FCW, recently explored five best practices, which originated from a Tableau Software white paper. Here’s my hybrid version of both:

1. Empower everyone to explore the data.
2. Showcase relevant, actionable information and meaningful metrics.
3. Let the data tell stories using visualization.
4. Support interaction and collaboration.
5. Make all of the above accessible.

I will say this: The health care data company I spoke with followed all five best practices in crafting its product.

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.