Why businesses should be concerned by the notion of ‘data lock-in’
This is a guest blogpost by James Fisher, SVP of data firm Qlik
A little over a year ago we, at Qlik, started to outline our vision for the “third generation” of BI and analytics, which we predicted would be based around three key pillars: the democratisation of data, augmented intelligence and more universally embedded analytics. At the time, our predictions were driven by the belief that the way that businesses and consumers want to interact, own and use their data had fundamentally changed.
Fast forward to 2019 and we’re seeing this sea change in attitudes to data play out in front of our eyes as enterprises strive for better data literacy skills among their workforces – and individuals explore the boundaries of true data ownership. Yet despite the very clear shift towards the idea of data democratisation and the radiant benefits of flexibility and innovation for businesses, the so-called mega vendor cloud platforms in the BI and analytics market seem to be running against the grain of the wider consensus.
Salesforce’s decision to buy Tableau and Google’s acquisition of Looker, are plays to lock-in and hoard vast tranches of data in the cloud – an implicit acknowledgement of the value of using analytics as a way to consolidate ownership of customer data. Fundamentally though, these deals are at odds with the changing mindsets of people everywhere around data management.
There are fears with these acquisitions that history is set to repeat itself. Back in 2007, we saw a slew of high-profile acquisitions of first-generation BI tools by IBM, SAP and Oracle making plays to lock in as much data as possible into their on-premise offerings. Subsequently, customers voted with their feet and the second generation of much more analytically-minded BI platforms grew to meet shifting customer needs.
It’s now large cloud platforms that are making forays into this space – but just as before, this approach will likely fail to deliver the value that customers expect. For one, these deals are being driven by the desire to lock as much data into their cloud platforms, and as a result are denying customers flexibility and use of the platforms they want. This integration and exploitation of synergies will, in turn, stifle the ideas of community and innovation. Disconcertingly, data hoarding has also been proven to drive up cost – an unwelcome consequence for long-time customers of the likes of Tableau and Looker.
Single platforms also present difficulties around compliance. Customers are looking for flexibility in supporting government obligations too and single platforms make it harder to comply with complex multi-geographical regulation. The US-implemented CLOUD Act is a case in point. US companies who are subject to the CLOUD Act must disclose data that is responsive to valid US legal process, regardless of where the company stores the data.
The bigger picture
This shift in enterprise attitudes to data is being underpinned by changing social ideas. The breakout popularity of Netflix’s The Great Hack has helped to underline how some have been willing to play fast and loose with personal data in recent times. This has created widespread mistrust around the usage of data that has extended far beyond the industry and to people everywhere.
The silver lining is that this has, in turn, helped to galvanise unprecedented levels of engagement with their data. This widespread awareness is encouraging but needs to be matched with a greater degree of confidence and competency in handling data, by gaining a better grasp of data literacy. This will allow individuals to be in control, confident and skilled in how they manipulate data – which consequently will help businesses tap into the $320-$534million higher enterprise value that companies with high-scoring data literacy scores are worth.
It’s not just about grasping what to do with data to reveal its value, but also for the individual or organisation to understand how their data is being used. The notion of having these massive tranches of data locked away by single cloud platforms is at odds with these changing attitudes to data ownership.
Ultimately data-lock-in is not good for anyone, business, individuals or society as a whole as it will foster mistrust and reduce the opportunity we all have to do amazing things the data that is available to us.