EXPLOITING RAW DATA POTENTIAL
The global market data industry is rapidly approaching revenues of US$50 Billion per annum. Yet this has barely drilled into the surface of its long term potential.
More and more companies want to get into the data business game, and why not? It is highly profitable, resource efficient, and brings positive benefits to the underlying business.
Institutions, organisations, and businesses have amassed petabytes of data which is not being utilised to benefit the owners nor potential users. There are numerous reasons why this data has not been converted to dollars, but once a value can be identified then the road to building the business starts by creating strategies, products and leveraging resources.
So why are many data owners not putting the data to use and turning into hard dollars?
The main reason lies with the concept of data as a business., and the need to build a proper framework for success.
• Trying to treat data as a fixed asset like a car or computer does not work because it is intangible in its existence
• Adopting a software licence approach starts to address the issue but falls way short because data is not simply a numbers game (despite the appearance). It is driven by accessibility, distribution, and the different ways data can be employed in its raw form, and then manipulated to create new data
• A single item of data can be used by an infinite number of people at exactly the same time for an infinite number of users, what I call the ‘Snicker’s Effect’ www.marketdata.guru/2019/01/23/the-snickers-effect-how-data-turns-into-dollars
• Equally that same item of data is dynamic, constantly being updated as markets are active
What this all means is that to build successful a data business, is that a new set of rules must be applied, a set of 8 rules
Getting these right takes the first steps to success.
DRIVING THE POTENTIAL
We identify the core concepts required to convert the raw potential dollar value of proprietary data and information into real revenue.
Nowhere is this more the case than in market data, the provision of financial information that prices Capital Markets globally.
In 2021 we see revolutionary and evolutionary changes in market data consumption, which includes:
• Greater internal enterprise consumption across businesses, in terms of depth, breadth and volume
• Development and usage of a wider range of data attributes
• Expanding external data sharing between businesses
• Lower levels of individual, i.e. less terminal, usage
• Light tech replacing heavy tech for data operations and management
• Development of alternative channels for data distribution
• Enhanced regulatory requirements impacting data governance, usage, and requirements for data
Each of which is altering the market data landscape of who is using what, where, why, and how.
The next series of articles will take a deeper look at each of the 8 rules in turn to discover what they mean to the data entrepreneur.
Keiren Harris 04/03/2021
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