I recently attended a large technology vendor’s summit on analytics and Big Data, and heard one of its senior executives say:
“Data is the new oil, the next new natural resource.”
My first reaction to the statement was “Oh yeah? Then why is your firm buying up the technology providers in the space, and not investing in the data itself, if it’s that valuable?”
In hindsight, it was a stupid question, because the answer is obvious: The money is in refinement, not the commodity itself.
(If you don’t believe me, take a look at the stock market. Exxon Mobil, Chevron, and BP all trade at lower multiples of revenue than the Halliburtons, Baker Hughes, and Sclumbergers of the world.)
In the midst of the current obsession with Big Data, comparing data to oil, and calling it a “natural resource,” is bound to get you some attention.
It’s definitely a pithy quote. But it’s the wrong analogy.
My take: Data is the new sugar.
Sugar sure tastes good, doesn’t it? Put a little on your cereal, in your coffee, put it into a cake, yep, sugar pretty much makes anything taste better.
Same thing with data. Have a tough management decision to make? A little bit of data — when you have none to start with — can sure help you make a better decision.
But too much sugar isn’t a good thing. It makes you fat. It’s hard to digest. There’s a limit to how much sugar you can put in your coffee or in a cake before it doesn’t taste so good.
It’s the same with data. Too much data leads to decision paralysis. Too much data is hard to process (refine) and incorporate into the management decisions you have to make. And while there aren’t that many different kinds of sugar out there (or are there?), data isn’t so homogeneous, so mixing data makes it hard for you determine which data elements you’re using is contributing the most to making quality decisions.
All of this is an attempt to inject reality into the discussion about Big Data. As I half-joked in an earlier blog post, “Every example of a firm using data is not an example of Big Data.”
And data is anything but a natural resource — i.e., something that exists in nature, and is there for the picking, extracting, and/or gathering.
The newly emerging data scientists out there would do well to think of data as the new sugar, not the new oil.