Net Expectations
What a Web data service economy implies for business
Information Management Magazine, Jan/Feb 2010
There is reason to hope and believe that the last few years have given rise to a new era of maturity in data and information management. The early limitations of hardware and networks, and ensuing challenges of application and data integration, are largely conquered (or at least understood) for now. CPU and storage costs are less and less a barrier to any project, and analytic tools have matured.
Now, organizations are turning their attention toward making information work.
We're seeing this in widespread uptake of data governance, where business rules, data quality, usefulness, context and access are becoming policies that allow people to more easily sort through data.
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The more data is understood, the better it can be organized and packaged into services, in the enterprise or on the Web. And, with the connectivity of broadband HTTP and open APIs, the utility of software as a service and cloud infrastructure become basic components of a new transactional data economy.
Today, startups and traditional data providers are busy thinking up business models for information services. Brick and mortar institutions are also examining their data stores as assets to be resold.
There is a ready client base - especially sales and marketing teams under competitive pressure and looking to find valuable information in someone else's lists, contact trails and transaction records.
"The last two decades have been about getting access to data but we haven't put it in enough hands to change the way we conduct business," says Dana Gardner at Interarbor Solutions. "A big part of Web and cloud computing that doesn't get talked about much is that it enables a kind of data economy where you access data, pay for it and use it in a system that has value and a currency to it."
Indeed, a new era of Web data services that are easier to find, buy or sell is coming.
However, it arrives with a downside. The order we've worked so hard to achieve, which is enabling this new information economy, can quickly unravel.
Every new data service is a new silo of information to be judged and matched to other data, meaning that a lot of governance lies ahead.
"The nice thing about Web data services, SaaS and cloud is that it's easy, it's relatively inexpensive to create or consume and it's immediate," says longtime BI analyst Howard Dresner. "Business doesn't want to wait until next quarter, and IT is gravitating this way too because they have only so much budget and so many people."
But Dresner and others add that outside the four walls and partner channels we lose our grip on governance. Networks of services such as Salesforce.com can predeliver integration and quick usability, but don't assure quality of data by an enterprise standard. By a Google standard, quality on the Web is undefined and judged by popularity, not by whether the information is true or useful.
There is expectation, demand and confusion on all sides about how we will manage these issues, orchestrate services or understand their worthiness. We don't know how at-large information will compare or intersect to business intelligence and data quality as we know it. But we've already begun to treat the Web as its own integration platform.
Connectivity
The drive to governance arose when corporations were already less vertically and more virtually integrated across divisions, lines of business and scattered projects. The spread of data silos within organizations came to be managed with conventional connectors, and increasingly, Web service languages, protocols and application interfaces that break silos of data into chunks of content that can be mixed, matched and reused as feeds.
The same protocols and services benefit any number of nimble service and information providers across the Web. A mostly-undocumented trend has been the rise of Web traffic that runs not through browsers, but through application programming interfaces. APIs serve as a conduit for developers to extract data into applications, and for gatekeepers to regulate traffic loads, control access permission and the rights to access data. Thusly, a developer accesses or subscribes to services to build a desktop or iPhone application that might call on airline reservation systems, weather reports and hotel booking systems all in one view. As the ad says, whatever you need, there's an app for that.
Perhaps most important, APIs provide a point of transaction that might be free or paid. John Musser runs a site called programmableweb.com, which documents API and mashup releases. In four years of tracking, the biggest shift he's seen is the movement of APIs as a consumer phenomenon to something more tantalizing to the enterprise.
APIs are often built in house but increasingly come from third-party service providers. There are hundreds of examples. The U.K.'s Guardian newspaper uses API software-as-a-service from a vendor called Mashery to strategically resell content to hundreds of secondary news outlets with unique interests. Retailer BestBuy uses API services from the same vendor to distribute product specifications and pricing to resellers, and looks at the behavior of API traffic to measure whether price, newness, descriptions or pictures of a product are the best way to lead a campaign. Whatever bit of information most leads a customer to the "buy" button is what BestBuy tells resellers to feature first.
Traditional lookup services like credit report bureau TransUnion are using Web services and APIs to build new businesses on top of existing data. Scott Metzger, CTO of TransUnion's partner facing Interactive division, uses API software as a service from Sonoa Systems to expose and sell credit report information to banking and other financial institutions that pass along or resell to their own customers. TransUnion Interactive benefits by being freed of the responsibility of building applications or Web sites for its partners, and by studying the value of different data services as they are consumed through the API.
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