The Data Cold War

One of the many things I love about Twitter is its ability to spark ideas via real-time conversations.  For example, while live-tweeting during last week’s episode of DM Radio, the topic of which was how to get started with data governance, I tweeted about the data silo challenges and corporate cultural obstacles being discussed.

I tweeted that data is an asset only if it is a shared asset, across the silos, across the corporate culture, and that, in order to be successful with data governance, organizations must replace the mantra “my private knowledge is my power” with “our shared knowledge empowers us all.”

“That’s very socialist thinking,” Mark Madsen responded.  “Soon we’ll be having arguments about capitalizing over socializing our data.”

To which I responded that the more socialized data is, the more capitalized data can become . . . just ask Google.

“Oh no,” Mark humorously replied, “decades of political rhetoric about socialism to be ruined by a discussion of data!”  And I quipped that discussions about data have been accused of worse, and decades of data rhetoric certainly hasn’t proven very helpful in corporate politics.


Later, while ruminating on this light-hearted exchange, I wondered if we actually are in the midst of the Data Cold War.


The Data Cold War

The Cold War, which lasted approximately from 1946 to 1991, was the political, military, and economic competition between the Communist World, primarily the former Soviet Union, and the Western world, primarily the United States.  One of the major tenets of the Cold War was the conflicting ideologies of socialism and capitalism.

In enterprise data management, one of the most debated ideologies is whether or not data should be viewed as a corporate asset, especially by the for-profit corporations of capitalism, which is (even before the Cold War began), and will likely forever remain, the world’s dominant economic model.

My earlier remark that data is an asset only if it is a shared asset, across the silos, across the corporate culture, is indicative of the bounded socialist view of enterprise data.  In other words, almost no one in the enterprise data management space is suggesting that data should be shared beyond the boundary of the organization.  In this sense, advocates, including myself, of data governance are advocating socializing data within the enterprise so that data can be better capitalized as a true corporate asset.

This mindset makes sense because sharing data with the world, especially for free, couldn’t possibly be profitable — or could it?


The Master Data Management Magic Trick

The genius (and some justifiably ponder if it’s evil genius) of companies like Google and Facebook is they realized how to make money in a free world — by which I mean the world of Free: The Future of a Radical Price, the 2009 book by Chris Anderson.

By encouraging their users to freely share their own personal data, Google and Facebook ingeniously answer what David Loshin calls the most dangerous question in data management: What is the definition of customer?

How do Google and Facebook answer the most dangerous question?

A customer is a product.

This is the first step that begins what I call the Master Data Management Magic Trick.

Instead of trying to manage the troublesome master data domain of customer and link it, through sales transaction data, to the master data domain of product (products, by the way, have always been undeniably accepted as a corporate asset even though product data has not been), Google and Facebook simply eliminate the need for customers (and, by extension, eliminate the need for customer service because, since their product is free, it has no customers) by transforming what would otherwise be customers into the very product that they sell — and, in fact, the only “real” product that they have.

And since what their users perceive as their product is virtual (i.e., entirely Internet-based), it’s not really a product, but instead a free service, which can be discontinued at any time.  And if it was, who would you complain to?  And on what basis?

After all, you never paid for anything.

This is the second step that completes the Master Data Management Magic Trick — a product is a free service.

Therefore, Google and Facebook magically make both their customers and their products (i.e., master data) disappear, while simultaneously making billions of dollars (i.e., transaction data) appear in their corporate bank accounts.

(Yes, the personal data of their users is master data.  However, because it is used in an anonymized and aggregated format, it is not, nor does it need to be, managed like the master data we talk about in the enterprise data management industry.)


Google and Facebook have Capitalized Socialism

By “empowering” us with free services, Google and Facebook use the power of our own personal data against us — by selling it.

However, it’s important to note that they indirectly sell our personal data as anonymized and aggregated demographic data.

Although they do not directly sell our individually identifiable information (because, truthfully, it has very limited, and mostly no legal, value, i.e., that would be identity theft), Google and Facebook do occasionally get sued (mostly outside the United States) for violating data privacy and data protection laws.

However, it’s precisely because we freely give our personal data to them, that until, or if, laws are changed to protect us from ourselves, it’s almost impossible to prove they are doing anything illegal (again, their undeniable genius is arguably evil genius).

Google and Facebook are the exact same kind of company — they are both Internet advertising agencies.

They both sell online advertising space to other companies, which are looking to demographically target prospective customers because those companies actually do view people as potential real customers for their own real products.

The irony is that if all of their users stopped using their free service, then not only would our personal data be more private and more secure, but the new revenue streams of Google and Facebook would eventually dry up because, specifically by design, they have neither real customers nor real products.  More precisely, their only real customers (other companies) would stop buying advertising from them because no one would ever see and (albeit, even now, only occasionally) click on their ads.

Essentially, companies like Google and Facebook are winning the Data Cold War because they have capitalized socialism.

In other words, the bottom line is Google and Facebook have socialized data in order to capitalize data as a true corporate asset.


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