• July 1, 2012
  • By Denis Pombriant, founder and managing principal, Beagle Research Group

The New IP: A Big Data Hierarchy

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Big data seems to be the flavor of the month, perhaps of the year, and with good reason. We're awash in it. But there's data and then there's data, and the quantity is less important than you might think. At least sometimes. The kind of data that concerns you most will definitely affect your thinking about what's important in managing it.

For example, no one doubts that a difference exists among the data that shows a video, the data that customers emit almost like radioactivity, and the bedrock data that says someone owes us money. Yet the conversation rarely goes so deep, because lots of people with different needs have a tendency to get excited and talk across each other.

Which data is more important? That's hard to say, and that may not even be the right question. It's like asking which part of your car is most important. Take one part away and all you have is one hundred dollars' worth of scrap metal.

Perhaps the right question is this: How do you manage each type of data to optimize its use to you and your company? Media files might be expensive to produce, but they often have a half-life, and you can always re-create them. How to manage them? Put them out in a public cloud like YouTube and Vimeo and don't lose sleep over it.

Company data, such as the details of the general ledger (GL), accounts payable, or the customer list, and things like it, are a different story. Many companies work hard to secure this data on-premises, and they back it all up regularly. But storing it in a SaaS application has been proven to be safe as well, and many companies take this approach too.

Social data falls right in the middle, though I would say it should be treated more like other company data. This is especially true if you like to analyze social data and mix in some company data. The result of that mixing is what I call IP, or intellectual property.

People look askance at me when I say that. Surely, they agree, GL data and the like are precious, but are the wishes and whims of social media just as precious? Absolutely. Those wishes and whims combined with data about how long the customer has been using the last purchase become a powerful tool for the sales team. Those wishes and whims have a way of becoming purchase orders, but before they do, sales teams often put together shopping expeditions. So the information that influences the expeditions is gold.

At the end of the day, the data's not even that important; it's the information gleaned from putting it all together that matters. And if that's not IP, I don't know what is.

At Microsoft Convergence in Houston this past March, Kirill Tatarinov outlined a four-step progression to how we should think about our data: data, information, knowledge, and decisions, in that order. Let's call it Tatarinov's Hierarchy. I can't disagree with it. All of this implies the strong presence of analytics, an idea that everyone knows is important, though many are not sure why. It's the analytics that distill information from data and that drive the rest of the hierarchy. Taking away the analytics is just as bad as losing the data.

So this leaves us in an interesting place. The era of big data is legitimate, especially if you provide infrastructure. But big data is also important to applications vendors, who rely on analytics to tell them what's really going on in the market. If I could rename our era, I might call it Big Data and Analytics, but that doesn't exactly roll off the tongue, does it? Tatarinov's Hierarchy sounds better, but "The New IP" really says it all.

Denis Pombriant, founder and managing principal of CRM market research firm and consultancy Beagle Research Group, has been writing about CRM since January 2000, and was the first analyst to specialize in on-demand computing. His 2004 white paper, "The New Garage," laid the blueprint for cloud computing. He can be reached via email (denis@beagleresearch.com) or on Twitter (@denispombriant).

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