Big Data = New Oil — What’s That Even Mean?

During Teradata’s annual Partners conference in Anaheim, CA toward the end of October an executive  almost inevitably referred to big data as the new oil. Antony Peyton, deputy editor of London-based Banking Technology asked what that meant, which led to a certain amount of inconclusive rambling discussion.

As a college friend said long ago, the only thing worse than reasoning by analogy is reasoning by bad analogy.

The analogy of big data and oil has apparently been around since 2006, much to my surprise.

For example, marketing commentator Michael Palmer blogged back in 2006: “Data is just like crude. It’s valuable, but if unrefined it cannot really be used. It has to be changed into gas, plastic, chemicals, etc., to create a valuable entity that drives profitable activity; so must data be broken down, analyzed for it to have value.”

Steve Brobst, chief technology officer at Teradata, said he is more interested in using big data in areas like health care to see if it is able to predict when someone is heading to the hospital.

“That’s more interested than selling stuff.”

Teradata 2017 6 622

Steve Brobst, CTO of Teradata

A health expert predicted heart attacks could become obsolete within a few years because sensors and analytics could detect changes days ahead, providing time for treatment before an attack.

In 2012 Ann Winblad responded to a CNBC question about the next big thing by saying “Data is the new oil.”

Big data is also Google and Facebook selling their users to Russian info warriors who are intent on disrupting American society. And it’s Equifax collecting details on American individuals and businesses and then allowing it to be hacked

Jer Thorp argued in HBR in 2012 argued Big data is not the new oil. “Information is the ultimate renewable resource.”

We have already seen “data spills” happen (when large amounts of personal data are inadvertently leaked). Will it be much longer until we see dangerous data drilling practices? Or until we start to see long term effects from “data pollution”?

Niraj Dawar in HBR last year wrote :

“The questions that need to be asked of big data are not just what will trigger the next purchase, but what will get this customer to remain loyal; not just what price the customer is willing pay for the next transaction, but what will be the customer’s life-time value; and not just what will get customers to switch in from a competitor, but what will prevent them from switching out when a competitor offers a better price.”

 

 

 

About Tom Groenfeldt

I write - mostly about finance and technology, sometimes about art, occasionally about politics and the intersection of politics and economics. My work appears on Forbes.com and International Finance Magazine. The Financial Brand ranked me 20 on a list of the top 25 global influencers in financial services and Jay Palter included me in his list of 250 fintech influencers to follow in 2016 http://bit.ly/1SSRXC6
This entry was posted in Uncategorized and tagged , , , , , , , , , . Bookmark the permalink.