As we saw in part 1 “Oil is Found but Data is Created” there is a lot of truth to the saying “Oil is the new data” but the real value lies in understanding how they are different.
This blog will explore 2 more key differences between oil and data
- Oil’s value increases in a single, linear direction but data moves in diverse ways
- Oil is single use but data lives forever
Oil’s value increases in a single, linear direction but data moves in diverse ways
At any point oil is, essentially, owned by one entity. And often the consent to use oil is granted by a single entity whether it’s a government awarding a concession or a company selling you a gallon of gasoline. At each point from pumping to refining to distributing someone clearly owned the asset and it traveled in one direction, closer to the point of consumption.
Contrast this with data.
Data is often a collection of consents that may be granted at a country, company or even individual level. And, unlike oil, a consent may be revoked, a license for data usage terminated or even a court order “Right to be forgotten” executed.
Because data is a digital asset it follows very different ownership rights than a physical asset. Ordering a gallon of oil to be returned halfway around the world is a ridiculous concept. Ordering a piece of data be destroyed is entirely feasible.
Assuming one retains the consent to use data they can continue “refining it” throughout its life cycle giving it even greater value. Lets use a gasoline example; once gasoline reaches the gas station it will be consumed in its current form – there is no higher value. Its endpoint is a car engine turning it into energy to transport something and releasing carbon dioxide.
Data is completely different. There is no endpoint for data because its value chain is not linear nor terminal. Even after data’s purchase, subject to re-use rights, it may be further combined with other data elements and used over and over again. When used it is not destroyed.
And this brings us to the final, and most important difference between data and oil.
Oil is single use but data lives forever
The benefit of oil is enjoyed by a single entity. It might be a plane flying 200 people, it might be a single person driving a car, regardless once that gallon of oil is consumed its not available for anyone else to use. It is single use and finite.
This is very different than data – the same data elements may be used by many people simultaneously and, theoretically, forever. I argued earlier that data does expire and will be lost over time – I still believe some data will be lost – but with careful stewardship data could live forever. The ability to simultaneously use a single data element across thousands of people, and to use it forever, is a huge difference between oil and data.
To illustrate consider a library book. Each person checks a book out, reads it, and returns it. Only one person utilizes the information at a time. This is similar to oil; it may only have one purpose at a time. Data is different. At any moment thousands of people may use the same data for thousands of purposes. And they will use it over and over merging it with other data driving different insights over time.
The ability to use data simultaneously and forever has important implications for data’s speed. The speed at which data is absorbed into a variety of business situations is greater because it happens in parallel vs. linearly. This is why we see stock markets reacting faster to news and prices moving in unison – everyone has the same data at the same time and processes it simultaneously. Data is absorbed in parallel.
“Data is the new oil” is a great analogy – the point of my blog was not to discredit this notion. However there are important differences and they will indicate the data market will evolve different than the oil industry. How companies discover, refine, distribute and utilize data will be fascinating to watch!