Executives from startups to giants like GM and Progressive are trying to figure out how to connect products, gather data and then turn that data into services that consumers will pay for, or business insights that give them an edge. But that search for insights is leading to a disruption, not just in manufacturing or pricing, but also in how companies work together and perceive their competition.
As connectivity and technology invades more aspects of our lives with the internet of things everyone is trying to become the platform for something and own a chunk of proprietary data. But based on conversations I’ve been hearing in the last few weeks, all the work of becoming a platform is playing havoc with strategic partnerships.
With everyone from tech bigwigs to giant consumer brands attempting to own the consumer, some type of data or whatever metric they have settled on, there is a feeling familiar to the time-traveling immortals from the Highlander film — that in the end, there can only be one.
This zero-sum attitude has led executives to evade direct questions about who their competitors are. That happened earlier this week when Dan Ammann, president of GM was asked if the car maker considered Google or Apple a competitor at the Rutberg Global Summit in Atlanta. At the same event Cisco COO Gary Moore admitted that efforts to placate service provider customers led to Cisco moving a bit more slowly in developing its Intercloud product, an example where both a vendor and its customers both feel they need to be a platform.
Yet, at the same time, corporate leaders at the event were very clear that they must also work with others. For example, Glenn Renwick, the CEO of Progressive was practically begging carmakers to start collecting the data he needs to create a real-time pricing for auto insurance policies, so he can stop asking customers to plug a device into their cars and then ship it back to him.
Asked if he worried about having to pay for the data, Renwick was a bit evasive, but he also reiterated that it made more sense for someone else to collect the data. What Progressive has are the algorithms and the actuarial knowledge that makes sense of the data from millions of cars. A week prior to the Rutberg event, I was in New York for our own Structure Data event, where many of these similar themes about platforms and owning data came up.
For example, Paul Maritz, the CEO of Pivotal Group discussed how ill-prepared the wireless and wireline service providers are for caching and tracking real-time customer data flowing across their pipes and then doing something about it. Yet given that almost all data will flow across their networks, they could stand to become a mammoth platform and resource of raw data.
However, their traditional rivals, like Google or Amazon might disagree, hoping to keep the ISPs in the position of dumb pipes. Consumers too, might take issue with this incredible amount of change as providers of many services track their clicks, their location and their daily patterns across a wider array of devices. The FTC is looking at this issue, although it frankly seems far behind the pace of current innovation.
The bottom line here is that data and the algorithms one can develop from that data are seen as the biggest barriers to entry and better products in today’s business world. The more we connect, the more data gets thrown into the mix, and the race to own information will pit companies against each other and even businesses against their privacy-concerned customers.
The paradox is that all that data will be useless without pooling some of it, forcing consumers, companies and even the government to make deals that allow for that information to be shared. We’re seeing the beginning of that today. But over the next few years, the data economy will be one to watch.
This story was updated to correct Gary Moore’s title. He is COO of Cisco, not CEO.