Rise of the information reseller

Big data creates an opportunity to monetise or even productise your information assets. Fleur Doidge reports

Knowledge is power, as they say - and that can mean profits, but only if you know how to acquire and use it. The world of big data has meant there is more information hosted by IT systems than ever before (they do call it "information technology") and more businesses and consumers want to use all that data. The question has been how to do so.

According to research giant Gartner, 30 per cent of businesses will be directly monetising their information assets as soon as 2013. This opens up an opportunity for services and IT offerings that facilitate this, and for the rise of what the analyst calls the information reseller.

Doug Laney, a US-based research vice president at Gartner specialising in business analytics, confirms that this is not just about the types of information aggregators, analysts and marketers that already exist in the market, but represents a potential new revenue stream for a wide range of technology firms, including VARs.

"Many regular commercial enterprises are now considering how they might package their own data to monetise it directly or indirectly. The benefits include the fact that packaging and selling data is very cost-effective - it is a revenue ‘upside' as such businesses can achieve a much better market-to-book value than other companies," says Laney.

"Because information assets are not allowed to be put on the balance sheet, the book value can be artificially depressed for information-product companies. So it is a very viable business model."

Tailor an appropriate service

Gartner has spoken to a number of IT vendors already looking to take advantage of this opportunity - and there is no reason why channel partners cannot also earn a piece of the pie.

There is plenty of data out there that can be turned into useful business intelligence, if you can tailor an appropriate service to a target market's specific needs. Laney says in the US there are so many start-ups setting out to do just that, with no other visible means of support, that Gartner cannot even track them quickly enough.

"There are small businesses starting up to integrate things such as airline travel data, for example. Some are selling the data directly to customers, and some are going to the data to develop products around it," he says.

"I have had discussions with several IT vendors about generating revenue streams based on the data they collect that goes through their systems, particularly cloud-based providers."

It is not too late for the channel to play, whether VARs want to trade, barter or sell information or data, he says, although in a few years' time it might be.

However, one of the biggest obstacles is the need for compliance with the increasingly stringent local and international regulations on data handling, information privacy and confidentiality when it comes to personal data - particularly in the European Union, where the regime is tougher than in, say, the US, Laney adds.

Although de-identifying or anonymising pieces of data when they have been aggregated can be managed relatively easily, a potentially bigger danger is when several pieces of data can be triangulated in ways that make it possible to narrow down a subset to the point where specific people might be identified.

This could happen, for example, if different data sets make it possible to work out that someone in a particular location has a dog, three children, and earnings in a certain income band.

Since many organisations are not equipped to develop or introduce information-based products, specialist information resellers will appear. And Gartner expects a new category of role - that of the information product manager - to arise to help organisations as well.

This will not be just another marketing person or data analyst, but will require an entirely separate job description.

"The role of the information product manager will be [in part] to ask what data you are collecting from your customers, not only within the relationship, and how can you monetise that with your resellers, partners and suppliers," Laney says.

Technology providers that work directly with customers, such as resellers, may well be in a privileged position here, he notes, as the OEMs have far less direct customer access and, importantly, they covet it.

Any company getting involved will have to consider the ramifications of both current and future legislation. Laney believes, though, that this puzzle will be solved - it's only a matter of time.