The present and future of data from the perspective of Finis Conner, originally written by Bitcoinist Jeremy Hillpot
Just a few years ago, The Economist published a rather bold statement—the most valuable resource in the world is data, not oil. At the time, few people realized the true weight of that statement, but Google, Amazon, Microsoft, Apple, and Oracle clearly knew the enormous value of information decades ago.
For the past 20 years, these companies have been quietly working to collect, harness and control the near-infinite power of data. Today, they dominate the global digital advertising market, which is expected to be worth $179.77 billion by the end of 2021. But it's not just advertising -- nearly every industry in the world relies on information technology systems provided by these companies.
Gone are the days when sheiks and oil barons had the most influence and economic power. Now, a shortlist of tech entrepreneurs and "data titans" — like Jeff Bezos, Sergey Brin, Larry Page, Mark Zuckerberg and Elon Musk —has become the most powerful and influential person in the world.
But will their reign last forever?
Finis Conner is no stranger to the data world, having watched hard drives evolve from the initial 5-megabyte hard drives he brought to market in 1980, to the 20-megabyte drives that businesses demand today. From the perspective of Conner's 10,000-foot data landscape, a huge change is about to overturn the entire data economy. But this time, the trend is no longer around "data giants." Rather, it has to do with the increasing ability of ordinary citizens to recover and monetize the value of the data that rightfully belongs to them.
Data is indeed more valuable than oil
It’s no coincidence that the most valuable companies in the world – save for Saudi Aramco (No. 3) – are tech companies with the most data. Apple (No. 1), Microsoft (No. 2), Alphabet/Google (No. 4), Amazon (No. 5), Tesla (No. 6) and Facebook (No. 7) are all actively acquiring, It is no coincidence that they analyze, leverage and sell the data they collect from billions of users around the world.
Like those oil majors seeking to increase their oil reserves, these companies are constantly pursuing strategies to increase their data reserves. Last year, the total amount of global data reached 64 zettabytes (64 trillion gigabytes), and Seagate predicts that by 2025, the total amount of global data will reach 175 zettabytes (175 trillion gigabytes).
Much of this data is stored in large data centers - such as "Hive" facilities, where Facebook adds 4 petabytes (4000 tb) of user data per day, and Google's millions of servers maintain an estimated 10 - 15 exabytes (1000 - 1500 tb) of data. Even Tesla, which collects vast amounts of data to train sophisticated artificial intelligence systems for its self-driving cars, arguably owes much of its success to data analysis.
As co-founder of Seagate, the world's leading hard drive manufacturer, Finis Conner has played a key role in enhancing the advantages data-driven companies currently enjoy. "Even companies that don't have a reputation for data are using it to outperform their competitors," Conner noted. "Tesla is an example of the absolute need to capture data from multiple angles in today's marketplace." Thanks to Tesla Drivers collect and consume data, and they are now a trillion-dollar company. This data feeds AI systems to help them continually improve their products.”
Of course, most companies don't have the resources to store and protect petabytes of data. This has sparked a huge growth in the cloud data storage market, which is expected to reach USD 222.25 billion by 2027.
Conner said: "From my perspective as a hard disk enthusiast, I have seen a huge increase in the data created by individuals and companies, and the demand for storage capacity has also increased. We have gone from the first 5 megabytes of disks adopted by Apple. Drives, now the market needs 20tb drives. Drive manufacturers are not increasing storage capacity, they are doing it because they need to store more and more data. They predict that the cloud data storage market will reach 222 billion US dollars, which is the size of data and a manifestation of value.”
Understand the value of data
The best way to understand the value of data is to look at the billions of dollars in annual revenue that the most powerful technology companies derive from data. Alphabet (Google's parent company) generated $65 billion in revenue in the third quarter of 2021 using its search, Gmail, maps, Youtube and other platforms, as well as free data provided by users. About $53 billion of that came from Google's digital ad sales, which jumped 43% during the pandemic.
Meanwhile, Facebook leveraged its social media platform -- and free data from its users -- to generate $29 billion in revenue in the third quarter of 2021. That means the social media giant makes about $40 a year from each of its 2.91 billion monthly active users. About 97% of that revenue comes from digital advertising alone.
Facebook leverages its users and their data to capture 16% of the $180 billion digital advertising market. Alphabet (Google) has done the same, controlling about 29% of the market.
To understand what's going on, Conner suggests, "We should look at the amount of data that's being created, and the revenue that's being generated. I don't think people are thinking about the value of their data and what they're contributing to this huge market. In terms of digital advertising, there is $180 billion in revenue from other people's data assets, but that revenue is not shared with the people and businesses that actually generate it."
Given the enormous wealth and power these companies have gained through our data, you might think that they have acquired this data at a high cost. But in fact, this data is all free!
We're giving away our most valuable asset for nothing
Tech companies capture data by providing free and low-cost digital platforms for individuals and businesses. As we use and create content on these platforms, these companies capture data related to everything we do. They learn about our likes and dislikes, conversations, wishes, calendar plans, business goals, customers, identities, geographic locations, social connections, political views, and more.
Even when platform users know what's going on, they rarely understand the value of the data being extracted. Furthermore, since most users cannot monetize their own data, they can only let the platform use this data in exchange for free services.
In an eye-opening video, technology visionary Jaron Lanier dramatically rings the alarm bells, reminding us how social media and other platforms make us depend on their free services for more multi-data. Lanier also showed how users can be tricked.
Gradually, the public became aware of what was happening. According to a recent poll by the Pew Research Center, “approximately 81 percent of the public say the potential risks of companies collecting data outweigh the benefits.” Pew Research Center also found that “a majority of Americans ( 79%) expressed concern about the way their data is being used by companies and feel they have little or no control over how these entities use their personal information."
According to Conner, "People will ask what happens to their data. Where is it stored? Who benefits from it? They will realize how valuable their data is. Soon, they will need tools and platforms to help them Control your own data and profit from it. Why can’t the creators of the data benefit from selling their data? I see a huge opportunity in that.”
Ways to control our data and possibly commercialize it
Many tech startups are already building platforms that help people and businesses secure and monetize their data. The CIRUS Foundation, a project Conner currently advises through the Conner Group, is a good example of a similar solution. Their goal is to return the control and commercialization of data to users.
Daniel Bland, co-founder of CIRUS, talks about the project: “Today, only the largest technology companies in the world have the tools and ability to unlock the intrinsic value of their data, but this is changing rapidly. CIRUS is leveraging blockchain technology, NFT and New tools like Web 3.0-based platforms are helping individuals and businesses establish true ownership of their data and start monetizing it."
According to Conner, “The CIRUS Foundation is democratizing the new data economy by moving towards a decentralized network that gives users full control over their data and generates revenue from it.”
final thoughts
Conner's final observation on the future of data:
“I don’t think people think about the value of what they are contributing to this huge market. As more and more people realize the value of their data, disruptive solutions will evolve to address this opportunity. In fact , technology has given everyone an immediate path to regain ownership and commercialize their data. It’s time to start using it.”
By Jeremy Hillpot: Focusing on emerging technologies, his background in consumer litigation and technology gives us a unique perspective on the latest developments in blockchain technology, data, application development, and law.