We all must have come across such a comparison multiple times: “Data is the new oil!” It was first used by a UK mathematician, Clive Humby, about 12 years ago. While the analogy may fit at times and tempt us to draw those parallels due to the way information or data is used to power a lot of the digital transformative technology that we can witness around us such as predictive analytics, artificial intelligence, Internet of Things (IoT), automation, etc. While the parallel can definitely be drawn between Data and Oil as they both generate value when mined, Data has emerged as a commodity which can be renewed for value far more than oil. Let’s find out what are some of the key aspects differentiating between data and oil.
“Oil scarcity creates its value, while value of data increases with the insights generated by combinations of data sets and analytics. With time, it is becoming difficult and expensive to find, extract and transport Oil from untapped sites. However, it is easy to produce large amounts of Data and make the same available anywhere/anytime with time,” says Sapan Talwar, CEO, Aristi Ninja.
Oil exists on earth as a finite commodity, while data is not in short supply but being generated at a humongous rapidity. It is estimated that by 2020, 40 zettabytes of data will be created. Moreover, oil is also a one-time usage commodity, adding more oil doesn’t result in better quality. However, Data can be mined multiple times and reused for new purposes, creating value almost every time.
“When Clive Humby came up with the concept of ‘data as new oil’ , he meant the refinement of data set to transformative technologies. But this has now become a marketing shorthand,” adds Subhajit Dev, Chief Information Officer, Dr Reddy Laboratories.
While many experts call it a lazy and inaccurate comparison, there are others who point out to it being a valuable commodity with many different uses across several applications. “I think that crude oil is called as black gold due to the scarcity and data as crude oil only to bring out the value in the humongous data that is being churned out,” avers Ganesh Vishwanathan, CISO, Quattro.
“It is new oil because like oil it’s now driving a new ecosystem with companies thriving on processing and generating actionable outcome. As in case of others, we will see this growing as data economy,” points out Bharat Anand, CTO and CIO, Natgrid.
However, all data is not equally valuable. After sifting through data running in terabytes, one still may not find something useful. Therefore, in the case of data, quality does take precedence over quantity.
“Just like oil you have different types of data. You should know which data to use and how with respect to your business just like which oil for which machine. You make the mistake of choosing wrong data and your business shuts down like an engine,” remarks Alok Singh, Head Operations – Marketing & eCommerce at Ultra Media & Entertainment Pvt. Ltd.
Similarly, there are other dissimilarities too apart from the obvious similarities which has led to such comparisons. Experts say we must exercise caution while discussing them and not take them too literally.
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