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September 15, 2015

When Big Data Gets Hoarded

Resisting efforts to allow others to play in the Big Data sandbox

When “Big Data” emerged as a disruptive trend less than a decade ago, entrepreneurs marveled at the insights and new services it would offer. Now they are all hiring lawyers. Because now that Big Data is, well, big, the Lucky Few accumulated, or sorted, or created the platform for it, want to hold onto it.

And therein lies the problem. A repository of Big Data is tailor-made for innovators to plug into, build value-added services and find new purposes. But the accumulators of that content are resisting efforts to allow others to play in the Big Data sandbox. It’s human nature. The data has enormous value.

But the tension between the Lucky Few and Up-and-comers will define the next decade. The Internet, celebrated for its openness, is evolving into platforms – think Google, Facebook, Uber, Bitcoin and Twitter, to name a few – that are jealously guarded. And in some cases they are more than justified to do so

But in others, where they become both the host of the data and arbiters of its value, it becomes more dicey. If Facebook gets to value the data AND sell you ads based on that value, how do you know they are telling the truth? And if they squeeze out others who might be able to provide businesses and marketers value, is that right?

At some point in the near future, Uber will become a marketplace for much more than transportation. And in doing so it will collect enormous amounts of data – both personal and marketing – about the behaviors of tens of millions of people. That type of power will create enormous scrutiny. I hope they are ready for it.

The almost certain outcome of this collision – between the platforms and keepers of Big Data and those who want to innovate on top of it – will define a decade of business conflict, competition regulation and lawsuits. In many respects it will eclipse the legal fights over patents that have defined the last decade.

The best thing these companies can do is brush up on Microsoft 1998 and Google 2004.

If a company controls big data or a dominant platform, my advice would be to war-game on it. It may be justified to stiff-arm smaller companies that want to plug into that platform, but it may not. And getting that wrong will almost certainly invite anti-trust investigation from Washington to Brussels. The best thing these companies can do is brush up on Microsoft 1998 and Google 2004 (hint: one didn’t plan in advance and suffered; the other anticipated and did much better).

Big Data is the future. But it’s not the open future many predicted it would be several years ago. And that change will mean lawsuits, government investigations and a lot of time spent away from innovating if platform companies don’t plan.

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