The future of publishing: Why ebooks failed in 2000, and what it means for 2010

This post is adapted from a speech I gave at the O’Reilly Tools of Change publishing industry conference in February. It’s a great time for ebooks. There are at least six ebook reader devices on the market or in preparation….

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Marsha Keeffer

Harvard Business Publishing: Umair Haque - What Apple Knows That Facebook Doesn’t

Too often, we don’t recognize the power of platforms - even in Silicon Valley. Nilofer Merchant, Rubicon’s CEO, writes frequently on the topic and ties it together with strategy. The piece below by Umair Haque, draws an interesting difference between…

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Hope or Hype: Data in the Cloud

Nilofer, just back from FOO Camp this past weekend, reports the underlying current in discussions involved data in the cloud and how valuable it will be. I’m on the record as a believer in cloud data, but maybe see it happening in a different way.

Conventional wisdom holds that this is a fool’s dream as the owners of the biggest reservoirs of data have little incentive to unlock it. Why would Wal-Mart or HP let anyone access their data? I can’t think of a reason, so if we have to wait for big companies, we are in for a very long wait indeed.

However, I don’t think we have to wait for Wal-Mart or HP. As more small to medium sized firms adopt SaaS-based applications for a variety of business applications, a lot of interesting data is accumulating in the cloud outside the control of Wal-Mart and HP. Today, this data is rigorously segregated by SaaS providers and it is all treated as highly confidential. While sensitive, much of this data has considerable value if aggregated and benchmarked against similar data from other firms. Perusing another firms’s raw data, of course, would remain verboten.

Why will smaller companies cooperate in this way if Wal-Mart and HP won’t? It’s a way to partially level the playing field against these huge competitors. Wal-Mart derives huge advantage from its data, and SaaS applications offer a practical vehicle for doing something similar by aggregating data from many smaller firms. It makes sense for companies to cooperate as long as they are not directly impairing their own competitiveness (e.g. sharing customer lists, etc.).

Think about accounts receivable aging data. Today, one can buy credit reports from D&B that reflect historical data. In these uncertain times, many companies would be eager to get their hands on really current data—who is current on their A/P today, not merely historically. By pooling data from a number of smaller firms, one could quickly aggregate enough data to be useful even if the analysis were simpler than D&B’s. If the data cost less than D&B or has more detail, that would be an added bonus. The bigger the pool of companies and data, the more useful it will be.

While there are some other obvious applications such as payroll data, I’m confident that the most useful applications will become apparent only once the data becomes available and creative minds apply themselves. That’s always the way it is with data.

At the SaaS provider level, advantage will accrue to those that have access to a richer data set. Over time I foresee reporting of aggregated data being more of a differentiator for SaaS providers than a core source of profits, especially as the actual business applications become commoditized and SaaS providers look to business services to add value. Thus, SaaS providers are best served focusing this type of service on building share rather than profitability.

How long do we have to wait? Bill Gates famously said that we have a tendency to overestimate the level of change in two years and underestimate the level of change over 10 years. This seems like one of those cases.

Categories: Business Strategies, Emerging Business Models, Innovation

Tags: data cloud , FOO , SaaS