Here at FutureEverything, we ruddy love data. Particularly that which is open. I am lucky enough to work alongside some real open data wizards who truly understand the power of open data, where to find it, what to do with it and how to use it for positive effect. Simultaneously though, we are not slaves to the ‘Open Deities’. Between you and I, we are rather critical (of most things), we love to question, pull things apart, create debate. When we started to explore what the real opportunities are for commercial gain with open data, we didn’t enter into it with rose tinted glasses. I have to be honest, there were points where we started to wonder if we could confidently continue to fly the open data flag in a commercial setting. However, we persevered and I think this resulted in some interesting findings.. This is part one of my journey through the muddy waters of that big provocation ‘What are the REAL business opportunities in open data?’
The Shakespeare Review has recently stated that ‘Open data has the potential to deliver a £2 million boost to the UK economy, in the short term, with a further £6-7bn further down the line.’ Big words. Big money.
Let’s not underestimate the importance of this however. The effective use of public sector data can really drive improvement in resources that are fundamental to a successful society – education, health, transport etc. The Government believes that their drive to collate and liberate all the data they collect through the services they deliver, could help transform the public relationship with the public sector – ultimately, if they get this right, the public sector could become a rigorous and efficient machine to irrigate our economy whilst improving our lives. The UK finds itself in a particularly important position to embrace this opportunity due to its size and coherence of the public sector and the Government’s commitment to open data.
An example of how this commitment is already improving our lives is through more productive transport. We don’t have to guess when the next bus will arrive, or what the most efficient route from A to B is, a development that has been estimated to have generated a value of £15-58 million each year in saved time for users of Transport for London; and lets be honest, no-one wants to spend unnecessary time stood at a bus stop in a morning so lets just take a moment to be thankful for the hundreds of ways we can now access transport data.
But what was really apparent in the report, is that open data is still an emergent technology. When open data was initially proposed as a mechanism for creating billions of pounds in the UK economy it was assumed there would be a huge growth in businesses that created products and services. This surge hasn’t happened which raises a particular concern for advocates of open data.
It is also worth adding a note of caution to the otherwise very positive tone of this review. It is important we are critical when considering the empowering potential of open data. Ultimately, we know from our experience of running our recent data projects that open data empowers those with access to the infrastructure, background knowledge and skills to make use of the data for specific ends. Those without this kind of access get left behind, quickly creating a data divide. It is also worth challenging the Government’s boasting on the positive effects to the economy by embracing open data. Ultimately, if the government has just found potential savings of £27million in NHS spending through liberating NHS prescription data (1), these savings are reducing income for someone somewhere. That £27 million is still being withdrawn from the economy.
I am slightly digressing here. This isn’t meant to be a blog post about the success or failure of the Government’s Open data policies and statements, but more an exploration of the commercial opportunities for organisations. It just seemed to be relevant under the circumstances.
Back to the point – to kick start this it is worth summarising the supply side and demand side of open data:
The main supplier of Open data is the public sector. Here are a few key resources:
Government Data Repository
Office for National Statistics (particularly Nomis – official labour market statistics).
Central Government Departments
DataGM and other local data stores
This ignores the potential for the opening of private sector data. There have been real transformational benefits from Government initiatives such as Midata. Consumers now have powers to ask companies to hand over their personal customer data so that they can make more informed choices on how they spend their own money. That is a huge step-change to empower consumers to take decisions based on data that they themselves have generated.
The Shakespeare Review states that ‘I see future opportunities from greater collaboration between the public and private sector in data sharing to transform how Government operates.’ Well, so do we, and indeed the private sector have found interesting ways of sharing, disseminating and interfacing with public sector data to allow people without specialist skills to interact with it; but there are actually very few examples of commercial companies opening their own data.
One really good example is BBYOpen which is Best Buy‘s suite of open APIs. Best Buy is the world’s largest consumer electronics retailer. Brian Sletton from Bosatso consulting sums it up better than I can: ‘In 2009, Best Buy became the first “brick and mortar” retailer to expose its product catalog API to third party developers. The Remix API provided access to content for over 1,000,000 current and historical products. In 2010, they introduced a new API allowing registered developers to handle the complete purchase workflow through their own applications. Account creation, order history, pricing and availability information are all offered, including the ability to specify in-store pick up and home delivery.’
There is logic here. By doing this, developers can create applications that allow the Better Buy API to be integrated into their own products, creating multi channel funnels back to Better Buy products, thereby increasing sales.
On my journey to find more organisations opening their data for non-commercial gain, I came across Imperica, a publisher which opens its content for anyone to use via a non-commercial attribution license. They are also the first European publisher on Github (sadlyCondé Nast pipped them to the post for world first), keen to make their content usable in ways and forms that people can work with.
But most companies that open their data, tend to implement a freemium or premium model, giving them a way of generating an income from the data they collect.
There are various successful businesses built on open data. A popular model which I touched on above, is to use public sector data and build an interface to that data to makes it accessible for the general public. This can be seen in sites such as RM School Finder which uses education data, or Zoopla which uses Land Registery data.
There are other successful businesses that have used open data to enhance a product they may have already built.
Trapeze, which delivers solutions that consider the full 360 degrees of passenger transport. They started using OpenStreetMap to enhance its product. A good business decision, considering the alternative was a license from Google Maps.
Rapportive, a Gmail extension that shows you everything about your contacts right inside your inbox.
Mashable kindly summed up businesses in America using open data to create new business models in this post.
And finally, all those businesses which use open data for research – to confirm their business models, seek funding, secure opportunities and conduct competitor analysis. Frankly, the power of open data to do this is still vastly underestimated by many commercial organisations.
In my next post I will be exploring the two projects FutureEverything has recently been involved in: Our workshop ‘The Business of Open Data’ which was part of the 2013 Summit programme; and more recently, Cluster2020, a pilot project where we were asked to meet with four very different creative organisations to explore with them how data might give them competitive advantage.