On August 28, 1928, in Achnacarry Castle of the Scottish Highlands, there was a private appointment among a Dutchman, an American and an Englishman. If anyone knew the potential of oil, which could turn the fortune of corporations and empires, it was them. The Dutchman was Henry Deterding of Shell, American was Walter Teagle of Standard Oil the current Exxon and the Englishman, Sir John Cadman from Anglo-Persian Oil Company, soon to become BP.
With fuel-hungry ships, planes, and tanks on one side and the fast developing automobile industry on another side, when the oil became “the blood of every battle and economy”, it was these corporations that the oil men founded later known as the seven sisters, became the cartel that waged the merciless contest of money. There were times prior to the 1973 oil crisis when these Seven Sisters controlled around 85 percent of the world’s petroleum reserves.
Now let us consider the same perspective for the data. Since the time of counting, we have used information for making decisions. But it was never before this information used to be so concentrated in the hands of a five new emerging sisters. ‘Google’, ‘Facebook’, ‘Amazon’, ‘Apple’ and ‘Microsoft’. If we consider Google, there are over 100 million active users. It also has youtube with 1 billion unique monthly visitors. Facebook boasts around 2 billion monthly active users (Let alone the Instagram and the marketplace). Apple too has over 1 billion devices that are actively used around the world. Over half of the product searches happen on Amazon that has over half a billion active users. As far as the oldie Microsoft is concerned, 1.2 billion users use their product globally across over 100 countries. With Internet of things (IoT) developing, the world we survive is turning to a mine that churns out the new precious commodity data.
So what is the data that these companies are collecting from their users? They gather the information such as ad clicks, device details, email addresses, facial details, IP and location details, phone numbers, personal profile, search queries and the time information.They do it through cookies, device tracking and third party codes that we may not be much aware. We may not be even so much concerned about this information. But it makes a lot of logical sense for these companies to understand and predict the user behaviors. We will understand their power when PWC estimates the addressable market size of data to be at $1.3 trillion by 2019.
The question that whether the data is the new oil is not new. The data explosion has been predicted since 2006. There are 3 characteristics that are common for any resource that become such a powerful economic driver.
First is it’s omnipresence. If you consider the oil, it is not just a driver of our car. It is vital to the production of many everyday essentials. Oil’s refined products are used to manufacture almost all chemical products, such as plastics, fertilizers, detergents, paints and even medicines, plus a whole host of other products that you might not expect. Overall only 60-70% of the oil is consumed in the transportation sector that includes land, air, and water. Balance is consumed in chemicals and pharmaceuticals industry.
If the same parlance is taken, the mobile and smart devices that we use ever day has become the opportunities for interactions that produce customer data. The 2017 global edition of the GSMA’s ‘Mobile Economy’ report reveals that there is a 5 billion mobile subscriber base out of the global population of 7.5 billion. This is massive !!
Second is its economics. Through its extensive supply chain, the oil and gas industry employs hundreds of thousands of people and make a major contribution to the global economy in terms of global trade and technologies. Over 5-6 million people work directly in this industry globally and several million more indirectly. According to market research by IBISWorld, a leading business intelligence firm, the total revenues for the oil and gas drilling sector came to $5 trillion in 2014. 2015 estimates for global gross domestic product range between $77 trillion and $127 trillion. The oil and gas drilling sector make up between 6% and 8% of the global economy.
If we take the statistics, according to Forrester Research, Global tech industry is over $3 trillion and approximately it is over 3% with an average growth rate of over 5%.
The third is the potential for high correlation to the global economy. If we look at the correlation between the oil prices and the global economy, it is fairly complicated. The prices of the oil determine the fiscal and monetary policy of the governments.The fluctuations of its price could severely impact the corporate and sovereign ratings thus driving the investments in and out of a country. This is a direct impact on the common man whose daily life is impacted in all ways by the fluctuations of this commodity.
Similarly, if we take the impact of data, it is the dark horse that drives the consumer behavior. The targeted advertisements and customized product launches for specific user requirements are the ways to go.
But can we expect the nationalization drive that happened in the oil-rich nations will not happen again? The way in which governments responded to the 7 sisters, by nationalizing the oil resources, we possibly could see the nationalization of data. Since the new 5 sisters are extracting this resources free of cost and profiting from it, it may not be long enough to see this transformation. But I never expected that the history would repeat so perfectly.