I laugh every time I write the title "future of work", I mean, how presumptuous can one document / post / presentation be to outline the entire future of work. I'm going with "disruption of work" for this one. Oh well, titles aside, it's a topic that I'm extremely interested in, and have been looking at in one way or another for many years. In fact, in a lot of ways, it was the core of the social business research program I started over six years ago at IDC, or at least one of 2 core topics (the other was the shifting ways of dealing with customers). It's a very important topic and in some ways a confusing topic I think. The problem with any transition is that in the middle it's hard to let go of the past, and to see where the future might be heading. Few people I talk to anymore don't "get" the idea that something about work is changing, but exactly "what" is something of a mystery to a lot of people.
The present of work is broken. There are many pressures on the current structures, practices, processes, roles and the way enabling technology is used and managed. That's probably not a surprise to anyone who works in some organization. Sometimes you have to have seriously broken "things" before you can move forward to something new I guess, so in that respect maybe the brokenness isn't an entirely bad thing. Unfortunately though, many people are feeling that brokenness in a lot of different ways. What's broken you ask, well in no particular order:
There is a growing problem at many organizations around productivity as well. Over the past few decades companies have used technology to automate many processes. There are a limited number of processes that can be automated at any given time based on the maturity of available technology, budget (or cost benefit of the application of the technology), ability to use the available technology, etc. That means that for many businesses there is a clear, if moving, line of automation. at (or slightly below) the line the company reaches the maximum amount of productivity available through automation against it's economic benefit (they could automate more, but it would cost more than it saves). Once that is reached the company has to look for productivity somewhere else. Usually that has been through hiring more employees, but since the 2008 recession employment has declined in a fairly consistent manner. This puts many businesses (and employees) in the situation of increasingly doing more with less. In addition, GDP data shows productivity increasing in a fairly dramatic way across the same period, thus creating a productivity gap that gets wider every year. Now I believe some of that gap is being closed by third platform technologies, especially mobile but is that enough. I don't think so, in fact, I believe that the rest of the gap gets closed through heroics. Heroics is the existing employees taking on more and more of the labor burden, something that can close the gap for some reasonable period but is not sustainable over a long period. It's the "running a marathon at a sprinter's pace", it works for a while but eventually people can't physically keep up.
So how do businesses "keep up" the new required pace to continue to do more with less, or simply get work done in this new information age? Better yet, how does the way we work change to support the new information business paradigm? In this post I'm going to give you some really simplistic answers, but in the follow on (1 or more) I will drill into these topics in more detail:
This is just the start of the discussion of a massive topic, but hopefully provides a good introduction to the topic. Look for more in the sequel, coming shortly.
Way back in 2011 we published a maturity model for the adoption of social technologies and the resulting cultural and process changes that those technologies could enable. Quite a lot has happened since then of course but happily some of the fundamental business impacts from the use of social technologies hasn't. We do understand them more, and there have been a lot more business use cases to examine though, so revising the model at some point was something that we always knew we'd want to address. The idea, that adoption tends to follow a predictable pattern, is pretty well established and a concept that IDC is using across a bunch of technologies recently. Since our original model the process has undergone a standardization effort so that all the models we publish have a similar look and feel. This new maturity model is now called a Maturityscape, and uses a consistent process for the evaluation of the available data to establish the model.
To understand the way we view social technologies today, it's useful to refer to our overarching taxonomy, which focuses on three key experiences; customer experience, employee experience and partner experience. Bridging these 3 experiences are technologies like enterprise social networks, digital commerce and socialytics. The following diagram depicts that approach to social technologies:
I won't spend a lot of time on this concept, something that we developed and published a couple of years ago, but simply use it as a frame of reference for the maturity model.
The revised maturityscape was developed by 3 additional IDC analyst besides me, Vanessa Thompson, Lisa Rowan and Christine Dover. It is explained in detail in this doc (warning, subscription or purchase required to access). Here is the graphic that explains the steps:
As you can see, there are 5 stages of maturity ranging from Ad Hoc or grassroots social adoption efforts, all the way to Optimized, or a reality that has the use of social technologies as inherent in all business processes. More and more, we see this as the future state of social, the inherent incorporation of social into every business workflow and, thus inside all business applications. This idea is strongly represented in a relatively new topic area that we are exploring, the "future of work", which we started as a research thread last year. More on that topic in an upcoming post, and of course in a series of research reports over the next year.
Mobile technology is playing a key role in the current change and disruption that many businesses are facing. The fact that we carry such powerful computing devices in our pockets, devices that are always on and always connected to the Internet, has created a growing population of consumers and employees that shop, interact and work very differently than they did in the post-mobile computing era. This perpetual connectivity creates tremendous opportunities for businesses to get work done / increase productivity and to create very unique positive experiences for customers, employees and partners. It also though, puts a lot of pressure on businesses to ensure that they make the best use of mobile technologies to provide these experiences across all those constituents, not as an option but as a core component of any strategy.
This is becoming increasingly challenging though, as people adopt and use more and very diverse devices that range from smartphones to tablet computing devices as well as desktop and portable / notebook computers. As these devices proliferate people adopt and use them more and more, and often switch from device to device depending on: 1. activity / task, 2. availability / proximity, 3. personal preference and 4. cost / investment. From a software technology perspective, this means that application vendors who were only recently talking about "mobile first" strategies are now moving beyond this concept to a device agnostic approach. It also means that IT organizations have to move from attempting to manage by the device to platforms that allow application level management.
At IDC we launched a new program this year called Mobile Enterprise Applications to look at the use of software by businesses. As a part of that effort we recently conducted a survey of approximately 400 companies, talking to both IT and line of business / end users about their selection, implementation and use of mobile applications. One of the questions on the survey dealt with the benefits that organizations expected to gain from using these new mobile applications. Here are the responses to that question:
From the survey companies are focused on:
Mobile applications are particularly good at providing context, particularly location and activity of the user, a key component to better experiences and better decision making. They are also good at doing more than simply finding information, because of the power of the new devices they can enable the ability to take action of information in real time and at any time / any place. A powerful combination for business and their employees. This is also a unique ability in the hands of consumers, the ability to "shop" in both the real and virtual world simultaneously, and take action from anywhere. In my next post I'll take a deeper look at mobile customer experience, so I won't go deep on that topic here.
If you're interested in more information from our mobile survey there are 2 opportunities coming up shortly:
1. A Webinar on May 20, 2014, Mobile Applications Revolution with IDC analyst Amy Konary.
2. A Breakfast Briefing on May 25, 2014 in San Francisco with IDC Analyst Vanessa Thompson and me.
As I was re-reading my post on application silos I realized I forgot to include one additional example of the current problem. Recently Microsoft released Office for iPad. Now going beyond whatever I think of Office in general, I am in a situation where I have to use Office so having it (finally!) available on iPad was a really good thing. The product itself is quite good, maybe in some ways better than using Office on other devices. Needless to say that at first I was quite pleased to have near full Office capabilities on my trusty iPad. Unfortunately that happiness was short lived.
You see Microsoft has always been one of the most closed vendors, and in that, one of the worst offenders to creating application silos. Most of us today use a variety of tools to keep work in sync and to share and collaborate with team members. There are a variety of tools to manage file sync and share in the cloud, and while I like several for different reasons I haven't settled on just one. I suppose that's mostly because I don't have to, I can use several and manage just fine. I use Sugarsync to keep all my files in sync across iPad, 2 Android phones, MacBook Air, iMac and Mac Mini, and it works great. I use Box as well, and could have used it for sync but at the time I started using Sugarsync Box did not yet have a Mac client, so now inertia keeps me using both I guess. Box I use for work and yes, I use Dropbox for some personal sharing, particularly sharing family pics (it's easy and has a great UI). I also use Google Drive (I mean face it, Google has by far the best deal on storage) and I have iCloud for my Apple products as another backup. In other words I use most popular file sync and share tools for one thing or another, mostly out of convenience but also to test and compare (I am an alalyst after all). All of these tools work pretty seamlessly across tools and devices. What you'll see absent from the list is OneDrive. Now recently I am using it for one work activity, the team that I colaborate with uses it, so add another tool, no problem really.
The Microsoft problem though, is that they apparently don't know any of these other tools exist. Office for iPad connects ONLY to OneDrive and local iPad storage, so to move files on and off (or is that in and out) for Office I must use OneDrive. Not a huge deal except my files are also often already in Sugarsync (I back up everything there) and/or Box, Dropbox or Google Drive. This adds another step to my work, moving files in and out of OneDrive on my iMac / MacBook / Mac Mini. Again that wouldn't be a terrible thing but I often now only travel with my iPad and Android phones. Having Office on the iPad really enabled that. Microsoft's arcane idea of supporting only one file sync and share service creates pain and suffering for it's customers, and instead of making me use OneDrive, it makes me HATE OneDrive because of the poor user experience it creates moving files around and trying to keep them in sync (something the software does for me in other circumstances). Now I know what you're thinking, just switch to OneDrive...well, I don't want to. It's about consumer choice remember. I'm the customer and I want to use all of these excellent services, not just the one that Microsoft wants me to use. Wake up Microsoft, the days of closed application systems is over, today it's about openness, open standards and connectivity!
One of the challenges that many companies are facing today is dealing with the concept of creating a collaborative work environment while dealing with organizational structures that are very silo'ed. It's more than organization structure though, many enterprise applications also operate as silos. Data then, ends up scattered across a company and "trapped" in these application silos. To make fast, accurate and effective business decisions companies need to pull all the silo'ed data into a process and model that allows people access to any information at any time on an as needed basis. Supporting this concept of mashing up any employee with any information in real time and in a specific work context is a critical component of operating an information driven business, or as we've called it a sense and respond business. Unfortunately it's just hard today.
First it's complicated by the base paradigm of the way applications are built. Application "modules" inherently create silos, often silos that map to organizational silos as well. Think about the app modules today; there are high level categories like Customer Relationship Management (CRM), Financial Management or Human Capital Management and inside each of those categories there are stand-a-lone apps like sales force automation, recruiting and purchasing. Each individual app tends to create a silo, and although it is likely integrated into the rest of the higher level category suite, the connectivity may end there. The more hybrid, or the more companies bring in best of breed apps, the more likely the creation of these silos. Integration may or may not eliminate the silo problem, or might only go "part way" to creating a seamless flow of data across all systems.
The new paradigm for designing applications must be based on open standards and include options for connectivity. This open and connected design philosophy is critical to moving to a decision system model necessary for operating in a sense and respond model. Unfortunately most companies are burdened with an assortment of legacy applications in addition to newer cloud or on premises apps. The methods for integrating these apps can be varied, complex, expensive and often fragile. In addition as apps are modernized / upgraded fragile integrations can break or be compromised. Getting to trusted data can be a real challenge.
In addition to open and connected I believe that we need to move away from old app boundaries and start focusing on end to end processes composed of components in the form of services. Cloud services can then be configured and orchestrated to provide seamless, trusted data as a part of the base decision platform. Some newer cloud companies are starting to embrace this idea, in particular, Kenandy only sells / provides complete business processes, not individual apps that create old style app silos. To me, this is the logical way to redefine apps into usable business workflows.
In Part One of this series I listed 6 issues that are causing disruption and change in marketing. In this post let's focus on inbound marketing and the shift to a more content marketing focus and away from outbound or broadcast marketing tactics. This fundamental shift is often the underlying issue with most of the friction and change that is disrupting marketing, and requires a new and different approach across the organization to be successful. Just to remind you of the issues, here's the list again:
Moving from outbound to inbound marketing is perhaps the most difficult transition for most marketing organizations. Outbound marketing, or the process of "pushing" the company's messages out through multiple channels, is at the core of most traditional marketing organizations and processes. Inbound marketing, or promoting a company through the use of relevant content and trust based interaction to build relationships with prospects and customers, is considerably different from the traditional marketing approach. The fundamental shift is from broadcasting (or bombarding) a message out through cold-calls, ad purchases (on and off line), direct mail, email, radio/TV, telemarketing, etc. to a relatively un-targeted set of prospects, to providing opportunities for interested prospects and customers (having indicated some interest in your products or services) to gain insight through the interaction with relevant content. This content can be in the form of social media like blogs, blogs, YouTube, activity on social networks like Twitter, Facebook, LinkedIn, or even more traditional content like whitepapers, eNewsletters, eBooks, etc. The content is designed to inform and establish thought leadership, and in the end goes a long way to building credibility and trust. In addition to the content thought, inbound marketing is all about context. In other words, it’s about getting the “right” (relevant) content to the “right” person at the “right” time. This is accomplished through customer data centric marketing, or using available online and off line data to effectively target content to individuals who have indicated a proclivity for that specific content. Put another way, if I expressed in a post on Twitter that I was looking at new cars, asking for advice on BMW’s, and the local BMW dealership was listening, they would have an opportunity to offer up relevant content to “help” me in my search (and not to spam me, bombard me with “special” offers or hound me with a sales person). If I’ve indicated that I”m interested in information about your brand/products and you 1. are listening and 2. provide that relevant content, you are likely to create a situation where I might interact with you and eventually look to you for that product.
In examining inbound marketing it might be useful to look at the impact it has on people, process and technology. I’ve talked about the stages in the customer experience model before in this post, but here’s a diagram that captures what the customer experience model might look like, just to refresh you:
From a process perspective it looks something like this:
From a people perspective inbound marketing is quite a mental and cultural shift and has proven to be a challenge for traditional marketing organizations. The concepts are in many ways backwards from the outbound approach. The cycles and planning process is also very different, something we’ll look at in another installment of this series. Culture change is hard, and needs a combination of approaches to be successful. Clear processes and training on each of them can go a long way to helping people understand the new approach. In some areas you will need new skills and perhaps new employees to make the specific piece of the program successful. This is particularly true in the community part of the program. Community management is a profession and I’d strongly suggest that you bring in an actual (experienced) expert for this critical activity. For help with this, check out the Community Roundtable.
The technology part of the inbound process is a bit complicated and is a bog part of the current challenges that marketing organizations are facing. Unfortunately there’s not a magic button that will provide you a complete, integrated inbound marketing solution today, particularly for the large enterprise. Form a broad capabilities standpoint, perhaps Hubspot for the SMB market, and Adobe for the enterprise, have the deepest set of functionality. Even so, neither is a complete set of tools today. There are certainly plenty of component parts available, but you as a marketing organization will have to put them together (or go to IT for help). This is changing as more vendors start to realize that marketing is a connected process, but we’re a ways away from completeness, at least at the enterprise level. At a minimum you’ll need:
This is only a high level look at inbound, but hopefully it helps stimulate some new thinking for your organization. In part three we’ll look at some of the other issues in more detail.
The entire business world is dealing with a lot of change, and it’s being felt across all organizations and departments. The Internet and the four technology pillars (social, mobile, cloud and big data/analytics) are driving all sorts of new technologies and new processes and activities related to those new technologies. This is all good, challenging, and at times really hard. The changes aren’t hitting all departments and functions evenly though. Marketing, probably more than any other organization over the past 5-6 years at least, has seen and is dealing with the onslaught of these new technologies. The marketing function is also dealing with changes in expectations from company executives, employees, partners and customers. Many of my colleagues will argue that customer’s expectations haven’t changed, that customers always wanted to be treated to exceptional experiences but, I’d argue that the issue is not one of experience, but of the expectation that the expectations would be met that is putting a lot of pressure on marketing and companies in general. Anyway, according to the CMO’s and other executives I talk with, and based on the shear number of changes in marketing (or needed changes anyway), it is quite turbulent to be a marketing professional these days. So what exactly is going on in marketing?
From what I’ve observed the following issues are having big impacts on marketing organizations:
1. Moving from outbound to inbound marketing
2. Moving from a fairly rigid and established quarterly marketing plan to an agile / iterative marketing execution process
3. Moving from customer journey maps to customer experience models
4. Moving to a customer data driven marketing process
5. Struggling to stitch all of the digital marketing tools into a coherent marketing engine
6. Moving from marcom and traditional marketing to content and experiences
There’s new technology to help deal with parts of these changes of course, but in some ways that’s part of the problem. There’s no single technology solution that knits a solution together to address the needs of a modern marketing department. There are pieces of solutions, but these pieces often exist in silos that perhaps do as much to cause more problems as they do to fix others.
I’ve written about several of these 6 issues over the past year or so, but after thinking about each of them, I think it’s time to try to put together a series of posts that talk through each issue and look at the technology, people and processes that could potentially help marketers successfully deal with them.
I was working on some more research on business model innovation the other day and as I thought about the role of the Internet in business model disruptions over the past 15+ years, I couldn’t keep my mind from wondering back to something that has troubled me for the past couple of weeks, the proposed merger between Time Warner and Comcast. Actually more than just that announcement, there are many issues that keep coming up that threaten the independent nature of the Internet and those threats seem to be increasing in potential very rapidly. Now I should first say that I’m a technology analyst, not a political commentator or expert in government regulation / FCC policy. I am focused on innovation in technology and have spent a lot of time looking at the use of and disruptive nature of the Internet though, and that means that “net neutrality” is a subject that is of keen interest to me.
The problems, which are global, seem much more obvious and pronounced in the US, at least once you get outside of the obvious attempts by non-democratic governments to control access. This growing crisis in the US is a big problem from my perspective, and I guess many would argue that we’re already quite a ways from an open Internet, even putting aside the NSA privacy scandal, and just focusing on the other threats that are top of mind today. Before jumping feet first into these issues though, I want to put a basic concept in place; the Internet is to me at least, the latest addition to an obvious list of public utilities, added to electricity, water, sewage, natural gas, and phone service. This is very important from a legal and regulatory standpoint, and as such, value in an open market should be the key, we should have a system that insures reasonable availability / access to everyone. As a business tool it is essential and from an individual consumer perspective it is a key backbone for commerce, education, entertainment, communication and lot’s of other stuff that we haven’t even thought of yet. From a technology perspective we would not be talking about the cloud, big data/analytics, social technologies or even mobile devices in the same way without the Internet, disruptive businesses that range from Amazon and eBay to Uber and Airbnb, would not exist without it.
Why is Net Neutrality important? To get to that, first let’s make sure we know what “it" is. Net Neutrality is the concept that the Internet should be open and allow free communication. In other words Internet Service Providers (ISP) or governments (or any other organization) should not have the ability to discriminate against, block or interfere with any content, web site, application or user that travels across the network. ISP’s are tasked with providing open (dumb) networks that can be used equally by anyone. As a utility this is similar to a public phone line, the phone company provides the service for a fee but has no control over the content that is shared (i.e. the conversations) through the service. The phone company can’t for example, make the calls to your grandmother clear because she is on the some phone company service but provide substandard service to your office in Paris just because they’re on a different phone company service. They also couldn’t change the call quality based on what brand of phone you use, giving preferential treatment to phones of their manufacture while only providing substandard service on competing phone brands.
So for consumers net neutrality is essential to make sure they can get access to and interact with any content they choose in a consistent manner. It also means that there should be access available that provides reasonable value for the price paid and that it is not denied to a large part of the population for economic reasons. Everyone gets access to all available content and services. Think about it this way, the Internet is just another part of your everyday life, not a luxury place you visit sometimes. This might not have been the case 20 years ago, but today you are on the Internet as much as you’re not. It’s just a part of your everyday life.
For businesses it means that the landscape is a level playing field from a competitive standpoint (or should be). In other words ISP’s can’t favor their own content by slowing down or denying access to competing content. They also can’t use access as a bargaining chip to extort higher prices just to stay competitive. Not that ISP’s aren’t entitled to make profits from providing the network, they just can’t use access or quality of access to change the competitive landscape in their favor. This extends to start up as well, which could easily fall prey to this type of discrimination, with ISP’s using favor to help or thwart start ups based on relationships. The same would apply to governments, they couldn’t, for example, order higher quality service for businesses that contributed to campaign funds or had undue influence through lobbyists. Governments couldn’t restrict access to services except in some pretty dire situations, like the need to use critical infrastructure for communications in a short term emergency or natural disaster.
So what’s the problem, or why do I think we should be more than just a little concerned about net neutrality? Well, let’s look at a few things:
1. A few very large companies are making a very obvious assault on net neutrality in the US and attempting to gain unacceptable control (maybe they already have unacceptable control?). Competition is dying in the US, or actually is on life support. The proposed Time Warner / Comcast merger would create a near monopoly in 19 of 20 of the largest markets in the US. Both companies already have a reputation for heavy handed practices so imagine what it would be like in a market that they control; or in other words, they already have significant influence and control based on pricing, pay-to-play and just overall size, what happens when they become massively larger?
Comcast has a history of using it’s Internet access to favor it’s own cable services over competitors. Netflix again is at the heart of this issue, with Comcast using data speed caps as a tool to favor it’s own content over any other competitors. I guess this is not as much a problem for Netflix after they started paying off Comcast for equal access though, but if you want to know more read this.
2. Peering, or the voluntary connecting of two administratively different Internet networks for exchanging traffic has generally been accepted as a necessary part of maintaining net neutrality. Simply peering is necessary for keeping traffic between high traffic participants flowing freely. Over the past several months is appears that Comcast was somehow slowing Netflix traffic. Both parties disputed it, but the fact is that there is quite a bit of evidence that makes me believe that Comcast was in fact throttling Netflix. Now remember Netflix is a direct competitor to the movie services that cable operators offer and since cable operators are also ISPs you can see that there are conflicting issues, make money off the content while offering reasonable peering services as an ISP. This goes back to the idea that the Internet is a utility, therefore should ISPs provide paid information services? In this case Netflix seems to have caved and set a horrible precedent by paying for peering services that should have been a matter of normal peering agreements.
3. FCC is weak to ineffective and has repeatedly been cut off at the knees. The recent court ruling concerning the communication services rules that the FCC had applied to the Internet, the FCC made a serious blunder in the specifics of their approach (not using “common carrier” language) and, in a ruling that was no real surprise, lost. Instead of applying the obvious basic criteria to the Internet (treating it like any other utility) the FCC chose to call it “enhanced services” or now more commonly information services, something that all of the major ISP’s obviously supported. The mistake, besides the overarching classification came in the recent attempt to undo the mistake and apply common carrier rules anyway. In 2010 the FCC lost to Comcast in a case that started with Comcast throttling specific content. The FCC attempted to prevent the throttling and while Comcast agreed to the ruling, it challenged the FCC in court and won on the grounds that it was not subject to common carrier regulation as an information services provider. While the recent rumors were that the new FCC chairman Tom Wheeler was planning to revise the rules significantly in favor of net neutrality, unfortunately Verizon’s court case challenging the same rules as Comcast went the wrong way before anything significant could be done. Verizon, just like Comcast, won. The current situation then, leaves the ball in the FCC’s court, but would require them to do what they’ve failed to do over the past 34 years, that is, officially classify the Internet under the common carrier rules as a utility. The ISP’s are the pipes, the information services are something quite a bit different.
4. The US wireless / mobile broadband situation is a mess. Take what I’ve said about the ISP’s and make that 10, no maybe 100 times worse for mobile broadband with it’s outrageous proving and it’s tightly managed data caps. In Jan of this year, AT&T took this whole mess up a notch by offering developers and brands the opportunity to provide sponsored content. In other words you can pay for preferential treatment on AT&T’s pipes and get your content to mobile devices outside the data caps. While on the outside this might sound like a good thing, it’s in reality another threat to the open Internet. The only real hope for the US market comes in the moves by the “anti” carrier, T-Mobile, whose emergence from the failed AT&T merger has finally created a carrier that is aggressively taking on it’s competition and offering radically different services.
5. Paying more for less: That’s just how the current Internet provider market is set up in the US. In a market where market dynamics doesn’t drive competitive pricing and innovation that’s just what happens. The US has some of the slowest connection speeds and yet is among the most expensive markets for broadband in the world. I could show chart after chart to demonstrate that, but this BBC article will suffice to demonstrate the problem.
We have a serious problem in the US and that problem can extend to a global one, net neutrality is under attack. So what can we do? We all have to put as much pressure on the Federal Government, particularly the FCC to step in and provide the kind of regulation that is needed to keep (or make in some cases) the Internet open to all. The current attacks on neutrality, the Comcast / Time Warner merger, sponsored content, pay for play, caps and the paid circumvention of those caps, etc. are a real threat. We can only hope that the FTC’s current antitrust investigation will once again, just like the T-Mobile / AT&T deal, prevent something that will clearly not be good for consumers. We can also hope that the FCC finally steps in and defines the industry in a way that enables them to effectively protect the open Internet.
All businesses have a wide set of available data to use to support all sorts of business decisions and activities, although getting to the data and making sense out of it is no simple task for most. For marketing, customer profile and transaction data are important of course. Data available from social networks and on social media have a great deal of value to the business as well, particularly as that data is often behavioral in nature. Even with all these internal data sources and types, there are many more potentially very useful types of data. Now this concept is not a new one, there have been brokers that sell all manner of data for quite a few years, mostly financial and general profile / consumer information. What’s changing though, is the type and amount of data aided by new technologies and new distribution models enabled by the cloud.
Traditional data brokers have sold various types of personal data for years. That data ranges from basic name, address, contact to add on demographics like education, age, race, occupation, etc. The brokers often aggregate consumer data by buying up consumer information generated by store loyalty cards, searching / purchasing publicly available government records like DMV, voting records (in some states), and other public records (which are becoming more accessible as the data sources transition to cloud based storage). Credit reporting agencies were among the earliest companies to set up data broker divisions that make use of and aggregate multiple data sources and offer to sell the profiles. Companies like Experian, Equifax for example, have marketing services divisions. Standalone data brokers include companies like Acxiom and Datalogix. Here is a list of some of the other brokers and includes ways to opt out of the data collection.
So why is this interesting if it’s been going on behind the scenes for many years? It’s interesting now because of a couple of things; new technologies and business models enabled by the Internet are rapidly increasing the number of available data sources and the cloud is enabling new business models for distributing data. Let’s look at each of these factors:
1. New technologies, GPS enabled mobile devices and cloud enabled devices are generating new data types that are very interesting to many marketeers. Think of the value of the rich data set that is created by your mobile device and add in things like Foursquare or other social data that overlays with the location data and you can see how this would be of interest to local business, for example. New businesses that have grown up around social networks and what we call marketplace platforms (like ebay, Airbnb and Uber), are producing new data types that help complete personal profiles in unique ways. In some cases the aggregated data also provides insight into group behavior in various contextual settings. The data types produced are quite diverse and range from contextual location data to maps of social interactions. For may of these new businesses that data, a by-product of the actual “business model”, could become a viable and profitable secondary business. This is already happening, ebay for example, sells it’s pricing data that is used to build dynamic pricing guides.
2. Building off the last thought, you can see that new business models are making the data more available and affordable. The cloud enables as a service models for software, infrastructure, storage, and even things like transportation (Uber) and housing (Airbnb) so why not data? It’s no surprise that DaaS is a growing opportunity and will see a large increase in availability this year as more vendors move into the market, either as a discrete business or as a secondary business offering (a by-product of their “main” business). Pricing is fairly diverse right now, but generally you can expect to pay for actual consumption or pay as an "all you can eat" subscription.
I didn't touch privacy concerns in this post at all, but will do so in a future post. There is growing concern and interest from individuals and from government agencies in the potential for privacy infringements and for the need for increased scrutiny as more of these services become available. Couple that with the potential for backlash from the current NSA / government spying issues and you can expect to see quite a bit more of this topic this year.