The Value of Open Data – Don’t Measure Growth, Measure Destruction

David Eaves: “…And that is my main point. The real impact of open data will likely not be in the economic wealth it generates, but rather in its destructive power. I think the real impact of open data is going to be in the value it destroys and so in the capital it frees up to do other things. Much like Red Hat is fraction of the size of Microsoft, Open Data is going to enable new players to disrupt established data players.

What do I mean by this?

Take SeeClickFix. Here is a company that, leveraging the Open311 standard, is able to provide many cities with a 311 solution that works pretty much out of the box. 20 years ago, this was a $10 million+ problem for a major city to solve, and wasn’t even something a small city could consider adopting – it was just prohibitively expensive. Today, SeeClickFix takes what was a 7 or 8 digit problem, and makes it a 5 or 6 digit problem. Indeed, I suspect SeeClickFix almost works better in a small to mid-sized government that doesn’t have complex work order software and so can just use SeeClickFix as a general solution. For this part of the market, it has crushed the cost out of implementing a solution.

Another example. And one I’m most excited. Look at CKAN and Socrata. Most people believe these are open data portal solutions. That is a mistake. These are data management companies that happen to have simply made “sharing (or “open”) a core design feature. You know who does data management? SAP. What Socrata and CKAN offer is a way to store, access, share and engage with data previously gathered and held by companies like SAP at a fraction of the cost. A SAP implementation is a 7 or 8 (or god forbid, 9) digit problem. And many city IT managers complain that doing anything with data stored in SAP takes time and it takes money. CKAN and Socrata may have only a fraction of the features, but they are dead simple to use, and make it dead simple to extract and share data. More importantly they make these costly 7 and 8 digital problems potentially become cheap 5 or 6 digit problems.

On the analysis side, again, I do hope there will be big wins – but what I really think open data is going to do is lower the costs of creating lots of small wins – crazy numbers of tiny efficiencies….

Don’t look for the big bang, and don’t measure the growth in spending or new jobs. Rather let’s try to measure the destruction and cumulative impact of a thousand tiny wins. Cause that is where I think we’ll see it most.”

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