Measuring The Economic Value of Data

Today, there are new and changing uses of data in the digital economy. The big questions however are, who is winning with data, where is this data being kept, what makes new data different, when should data be kept, moved, deleted or transformed, how should data be valued, and why data is so much more important than it used to be?

Data is one of the most important assets that any company has, but it’s surprising that we don’t put the same rigor into understanding and measuring the value of our data that we put into more traditional physical assets. 

Furthermore, should data be depreciated as an asset? Or perhaps it appreciates like art. Counter-intuitively, the answer is “yes” to both.

To measure the value of data, we can apply some simple economic principles. For example, we know from IT forecasts that the amount of digital data being produced is much higher than the amount of data storage being purchased. 
Why is this the case? Simply put: Some data is produced, but not stored. Applying a simple supply and demand curve helps to explain why. (Source: IDC Digital Universe, Recode.)
The “supply” curve is storage capacity. This capacity is available at a range of prices, but there is a minimum price threshold for storage capacity. The “demand” curve is data produced. This data creates a demand for storage capacity. That data is stored as long as the value of the data exceeds the cost to store and access it over time. A simple equation to represent this is: 

Data Value (t) >= (Sc + Mc + Ac)/GB/yr * Retention period

Basically data value as a function of time must be greater than the sum of the cost for networking, compute and storage infrastructure(Sc), the cost to maintain the data and infrastructure (Mc) and the cost to access the data (Ac). To normalize between cloud and non-cloud IaaS, all of the measures are per unit per year. This cost is also a function of time, as measured by the retention period for the data.

Of course, in real life, the equation is not quite so simple. The cost to store and maintain data depends on how long it must be kept, whether it must be protected and secured, etc. There is also a penalty for keeping data because there is an increased risk of security violations, and a risk of data loss or data corruption over time.

On the value side of the equation, there is not a well-defined measure for data value. The value of data is really a measure of business value as a result of using or analysing that data in some way. In addition, there is a correlation between the amount of data kept, how accessible that data is, and its value. 

For example, having more data makes all of the data more valuable if the use of the data depends on a historical trend. For example, use of machine learning is already changing the value of larger data sets because most machine learning algorithms work better when trained with large amounts of data.

The area under the curve represents the amount of data that is created but not stored because its value is perceived to be lower than the cost to keep it. If we start with the hypothesis that people would keep all of the digital data that they produce if they could, then we want to eliminate the area under the curve. In order to do that, we need to either lower the cost of storing and maintaining data or increase the value of the data, or both. 

Once we accept the premise that data value should be measured, what would we do with this measure? On the infrastructure side, we focus solutions on maximising the data value measure, rather than a more infrastructure-specific measure, like unit price, power usage efficiency, or cross connect per month cost. 

That will drive innovation in infrastructure solutions in two distinct directions: Lower total cost of ownership on the one hand, and increased enablement for increasing data value on the other hand. This might encompass features for index and search, built in analytics interfaces, data movers, etc.   

Eenterprises need to start applying their own business metrics to establishing a value for their data. Historically, enterprises have done this primarily for measuring changes in data value over time, under the assumption that older data is less valuable because it is accessed less. 

This is no longer a valid assumption, and access to data is not the most relevant measure of its value, but rather the analytical output of data.

Network World

You Might Also Read:

4 Ways to Simplify Your Business Data Management:

Tech Giants Put Big Data To Work:

 

« Cybercrime In The EU - Where Are You Safe?
Global Cyber Conflict Is Close »

Infosecurity Europe
CyberSecurity Jobsite
Perimeter 81

Directory of Suppliers

Syxsense

Syxsense

Syxsense brings together endpoint management and security for greater efficiency and collaboration between IT management and security teams.

LockLizard

LockLizard

Locklizard provides PDF DRM software that protects PDF documents from unauthorized access and misuse. Share and sell documents securely - prevent document leakage, sharing and piracy.

DigitalStakeout

DigitalStakeout

DigitalStakeout enables cyber security professionals to reduce cyber risk to their organization with proactive security solutions, providing immediate improvement in security posture and ROI.

Practice Labs

Practice Labs

Practice Labs is an IT competency hub, where live-lab environments give access to real equipment for hands-on practice of essential cybersecurity skills.

CSI Consulting Services

CSI Consulting Services

Get Advice From The Experts: * Training * Penetration Testing * Data Governance * GDPR Compliance. Connecting you to the best in the business.

CyberArk Software

CyberArk Software

CyberArk is an established leader in privileged access management and offers the most complete set of Identity Security capabilities.

American International Group (AIG)

American International Group (AIG)

AIG, is an American multinational insurance corporation. Commercial services include cyber risk insurance.

KnowBe4

KnowBe4

KnowBe4 is an integrated platform for security awareness training combined with simulated phishing attacks.

Westermo Network Technologies

Westermo Network Technologies

Westermo designs and manufactures robust, resilient and secure data communications products for mission-critical industrial systems.

KLC Consulting

KLC Consulting

KLC Consulting offers information assurance / Security, IT Audit, and Information Technology products and services to government and Fortune 1000 companies.

OEDIV SecuSys

OEDIV SecuSys

OEDIV SecuSys (formerly iSM Secu-Sys) develops high-quality IT software solutions, setting standards as a technology leader in the area of identity and access management.

Penningtons Manches Cooper

Penningtons Manches Cooper

Penningtons Manches Cooper is a leading UK law firm providing high quality legal advice in areas including Data Protection, Cyber Security and Cyber Crime.

Jooble

Jooble

Jooble is a job search aggregator operating in 71 countries worldwide. We simplify the job search process by displaying active job ads from major job boards and career sites across the internet.

US Venture Partners (USVP)

US Venture Partners (USVP)

USVP is a leading Silicon Valley venture capital firm focusing on early-stage start-ups that transform cybersecurity, enterprise software, consumer mobile and e-commerce, and healthcare.

Kinetic Investments

Kinetic Investments

Kinetic Investments is a venture capital firm dedicated to early-stage companies that are transforming the digital landscape.

Trusted Technologies and Solutions (TTS)

Trusted Technologies and Solutions (TTS)

TTS is a security consulting company specialised on business continuity and crisis management, information security management, information risk management and identity and access management.

Menaya

Menaya

Menaya provide Ethical Hackers for leading companies while also providing cyber security solutions to help major infrastructures protect against cyber crime.

Treacle Technologies

Treacle Technologies

Treacle Technologies are a Cyber Security startup with a focus on Defensive Security.

VeriBOM

VeriBOM

VeriBOM is a SaaS security and compliance platform that helps protect you and your customers through automation, documentation, and transparency for every software application you build or run.

AirMDR

AirMDR

Designed by experts, AirMDR solutions cater to the unique demands of security operations centers.

Norwegian Data Protection Authority (Datatilsynet)

Norwegian Data Protection Authority (Datatilsynet)

The Norwegian Data Protection Authority (Datatilsynet) is the national data protection authority for Norway.