Openness is a massive Blue Ocean
One issue that continually returned at conferences we’ve been to in the last months (like SXSW and the Next Web) is the issue of data portability. People like Chris Saad, Chris Messina as well as Jeremy Keith are evangelizing the importance of creating interoperable services for end users.
For those of you wondering what data portability is about watch this movie and it will start to make things a bit clearer.
I was surprised that many of the audience seemed scared of data portability and confused about the need. These reservations seemed hinged on two aspects: privacy and monetization (sorry for the word – I’ll utilize the brilliant term ‘Making money’ from now on).
Privacy
Although the first question is easier to answer as it lies in not knowing that data portability is about giving the user more control of data not about giving your data to Google. As Chris Saad pointed out at The Next Web 2008: “A user would simply log onto a site, grant permission, and their friends, personal details and media – images, video, documents – are already populated and accessible – Nothing more complex than that.” The key word here is ‘grant permission’, data portability is about giving the user more control over their data not less1. In essence the privacy question is rooted in ‘ignorance’ – that is the absence of key information what data portability is. It is great to see the likes of those mentioned above taking the important role of educating business deciders and end-users alike in this regards.
Making money!
Many times the same questions are being asked about data portability as they used to be asked about open source a few years back. How can anybody make money with open source software? How can you make money by giving software away free? Business models were not clear, the benefits of using open source however have never been doubted. With open source the answer is that although you don’t earn money with open source software, you earn money because of open source, look at the gazzilions of companies that are using open source technologies and are deemed ‘successful’.
In the same way you don’t earn money with opening up your data. In open data structures where users can use their own data across services will not directly cause companies to increase profits. However the enabling possibilities of providing open data is incredible. You make money because you use open data.
The unclarity about the business advantage of opening up closed data silos resembles an innovators dilema type problem. It is the case where only those companies that can find the right markets and organizational structure will survive2. However the value creation that will take place due to the opening up of data is huge. Open data exchange will be like a currency that can power an economy. Just like open source software has enabled completely new areas of business, open data is just one aspect that will drive the added value for end users beyond economies of scale or network effects.
Call for action!
Apart from these benefits of open data – we need a better answer to the returning question of why it makes business sense to open up data silos, beyond “It sucks if you don’t”. There is a need for advocacy about the benefits of open data from a business perspective. However is it dataportability.org’s responsibility? Perhaps, but I think not. Their goal and purpose is to scout out technological possibilities and options and get the movers and shakers on board.
But we do need evangelists that will motivate the business case to existing businesses and explain why and how providing data portability features will enhance business. For this reason Soocial is starting an initiative called OAuthternoon’s where we answer the business question and the technical implementation examples – more info will follow soon. I’m sure there are parts of dataportability or other parties that are pushing this too, please feel free to notify me of these in the comments. For those wanting more background and food for thought about the changing economics and value creation of open data, here is some recommended reading.
1 I loved Chris’ answer to a question from the audience who was concerned his site would lose users by using OpenID. Chris’ answer: “What so you have a website that provides just ‘Signing in’?”
2 In my opinion large companies are correct in fearing to shoot themselves in their feet by opening up their data. However they have mush more to lose if they don’t. Finding easier transitions or ways to change could be an option, for example incubating new startups that will eventually overtake their business – this allows the startups to fight for and find their own ways to survive and thrive.
