The power of big data is not in the amount of data you collect, but the patterns you can identify, according to Stephen DiFranco, founder of The IoT Advisory Group.
“It not just that it’s big,” he told ThinkAdvisor. “There have to be patterns that you can find in it, and that are meaningful patterns that you can derive insight” from.
DiFranco doesn’t believe data is a commodity or the “new oil” because “everyone’s data is different,” he said. However, “is it a new product? Is it a new material that we will have commerce around? Yes.”
DiFranco said data will become the product of commerce as businesses start to collect more varied data about their operations. A hotel, for example, may know exactly how many guests are staying in the hotel or how much the bar has taken in, “but it’s probably the exact same data set they collected in 1942,” DiFranco said.
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“We don’t know the efficiency utilization of traffic patterns inside this bar, but we will in the future because that will become a piece of data that will be important,” he noted.
A restaurant knows how many times it can turn over a table in one night, but big data can show it how to optimize the menu to increase turnover, he continued.
Data becomes even more powerful when it’s compared to an entire industry. “That’s where the power of the commerce of data [comes from]. It’s not, ‘I’m going to go sell it,’” he said. “It’s, ‘I’m going to go make it participate with like sets of data from other service companies, and it’s going to teach me’” about my business.
Microsoft is one example of a company that has benefited from shifting its business model to focus more on big data, he noted.