Co-authored by Samantha Campbell and David Riley, Alqami
Heading into a new year and new decade we wanted to share some of our predictions for the data industry. An interesting statistic is that this year we are expected to have 20 billion devices collecting data for analysis. There is no wonder why 5 of the 6 biggest companies by market cap valuation are technology businesses (Apple, Amazon, Alphabet, Microsoft, Facebook, reference). These companies understand the true value of their data and how to leverage it across all business verticals, which is why they are seeing continued growth. However, how many companies, in general, are listing their data as a tangible corporate asset on their balance sheet? We see this as being a result of a lack of understanding of how to measure or place value on data.
As the world becomes ever more connected the volume of data is only going to increase, so does its potential, and for those in the business of valuing corporate investments, it is becoming more compelling to consider a company’s wealth of information properly when valuing the company itself. This combination outlines our biggest prediction for 2020, and the years ahead, that we will see an increased focus on developing a standardised methodology for modelling data value. Our focus will be to ensure we are leading the way with this movement through our industry insights and global network.
The alternative data market ‘grows up’
Alternative Data is no longer a niche product; however, it is still far from mainstream. 2020 will see this change as the race heats up for the traditional market data providers to become the go-to platform for ‘alt data’. Additionally, advanced technology platforms for data sharing continue to launch and improve. As more and more companies look to realise the value of the data that they are currently producing, managing and storing, these platforms will continue to see growth. On the peer-to-peer licensing front, alternative data will continue to expand beyond the requirements of quantitative-driven hedge funds and into the broader corporate market.
In 2020, up to 90% of the world’s largest enterprises are expected to generate income from data-as-a-service (DaaS). Having the ability to access and use centralised digital files online provides organisations with new data monetisation opportunities. Most modern businesses have already embraced data to help make more informed, better business decisions. However, this year the transformative companies have and will continue to invest in tools and resources to leverage the full power that data holds.
2020 will see an increased use of augmented analytics – referring to the convergence of business intelligence and emerging technologies, such as artificial intelligence (AI) and machine learning (ML). The past decade has seen the proliferation of business intelligence processes and implementation of systems that focus on gathering data from various sources, processing and then outputting into dashboards and visualisations. Although this has enabled increased insight for businesses and data-driven decisions, much of this can now be automated through augmented analytics platforms that deliver insights at an un-before seen speed and level of accuracy.
Governance and regulation
In 2020 governance and regulation will maintain standing at the forefront for businesses, prompted by the increasing amount of privacy and protection laws seen throughout the world, including GDPR and leading this year with the unveiling of the California Consumer Privacy Act on 1st January. As platforms expand for data analysis and proper data management, derived facts from data are becoming shared more seamlessly and therefore more broadly, not only within organisations but often externally with third parties. This will lead to a greater demand for data governance tools to help ensure the confidentiality, proper use and integrity of data, whilst in the process seeing these tools improve to accommodate this movement.
Samantha Campbell, CEO of Alqami, says:
“In 2020 companies will increasingly understand the true value of their data in terms of being a tangible corporate asset on their balance sheet. Our focus is on developing a standardised methodology for modelling data value, combining a principles and commercial based approach. This initiative has been driven by our Corporate Finance clients who now demand the capability to include a company’s data asset when valuing a corporate transaction.”