Data is the new oil?

Internet companies more valuable than oil/gas companies

As Apple, Alphabet, Microsoft and Amazon are now more valuable in market capitalization than Exxon and Chevron (Forbes Feb 5, 2018), the two leading oil and gas companies in the world, some talk about data as the new oil.

Even though Exxon and Chevron are huge companies the domination in the sector is still with the companies that have the rights over the largest oil reserves, the National Oil Companies. Companies refining the oil and the gas into marketable products and that transport and store it are less powerful (Wikipedia Petroleum industry).

Data can be seen as a commodity product that needs to be drilled, refined, stored and transported like oil and gas. Due to the amount of data companies like Apple, Alphabet, Microsoft, Amazon and also Facebook can collect, it can be tempting to wonder if they together with Chinese giants in the same area will become new power factors in the world the same way as the National Oil companies have been. As oil and gas data can also “pollute” the environment if it is distributed without taking into account security and privacy concerns.

If data really is the new oil it is interesting to see that currently it is not seen as a national asset like oil.

Telco and Cableco as trusted data owners?

Can Telco’s and Cableco’s take a bigger stake in the data market? They are network builders and with an increasing amount of connected devices in the home most of them continue their core business and build secure networks in the home. Managed Wi-Fi home networks is mainstream, though networks for IoT are less common although the up cost per househould is only about a few dollars. Controlling the home network is probably an enabler for going one step further exploiting the data.

Although some say that unrefined data is not worth anything, the lesson learnt from the oil and gas industry indicates that, if you want to become a powerful company, refining the data into new services have less value that controlling the data itself. If this is true operators should let third party verticals like Entertainment, Insurance, Security and Healthcare refine the data into marketable services on a platform provided by operators.

Offering secure connections and collecting data whilst respecting privacy, is probably something Telecom and Cable operators can build on. They have a trust they have built up as national/regional actors.