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Prospecting for Hidden Data Wealth Opportunities (1 of 2)

Prospecting for Hidden Data Wealth Opportunities (1 of 2)
Arek Socha, Pixabay

The data product concept that’s gained popularity over the past few years is helpful when it comes to mobilizing corporate data initiatives and evaluating what’s monetizable data-wise. But it’s good to keep in mind that we’re already in a second Gilded Age, with much of the data territory claimed long ago. 

Top three beneficiaries to date during the second gilded age

Apple Inc. has been the world’s largest company in terms of market capitalization for a while now. 20 years ago, Apple’s market capitalization was $7.78 billion. During 2021, its market cap peaked at just short of $3 trillion. Lately (March 2023), Apple’s market cap is hovering around $2.5 trillion. 

$2.5 trillion in terms of stacked $100 bills would be close to three times taller than the Eiffel Tower.    

Of course, converting all of Apple’s publicly reported market capital into cash wouldn’t be possible. But Apple is known for holding on to significant amounts of cash, in any case. Apple had $51.3 billion in cash on hand at the end of December 2022. A stack of $100 bills amounting to $51.3 billion would be over 500 feet high, according to The Calculator Site.

Apple generated $122 billion in pre-tax income in 2022. Only ten companies globally generated more than $50 billion in pre-tax income in 2022. Saudi Aramco topped the list at $303 billion. Apple, Microsoft and Alphabet followed at nos. 2, 3 and 4, according to Statista. 

Apple (est. 1976), Microsoft (1975) and Alphabet (parent of Google, which was founded in 1998) are all legacy technology companies in many ways despite their sizable investments in AI and big data over the years. As such, they defend their existing income streams by protecting the installed base of their legacy products. 

They also defend the data territory they’ve claimed for decades now, while most users were asleep at the switch.

Recent data center growth statistics and observations

Much of what these three enterprises store in data terms is duplicated data and code, owing to their use of legacy application-centric architecture designed to encapsulate (and strand) code in applications and marry at least one database to each application, a formula for data siloing by default. 

If enterprises were solely committed to data-centric architecture, data mesh and knowledge graphs to store most logic and data, ontology model-driven development and findable, accessible, interoperable and reusable (FAIR) data, they could reduce duplication (and associated complexity) costs by close to 90 percent. 

More data centers on the way

In the current legacy tech-oriented data economy, half a dozen providers own a sizable chunk of the world’s existing data centers and are planning even more growth during the 2020s. Much of what is housed data-wise as I pointed out is duplicated data, with more and more duplication to come, assuming more rather than less application centricity.

Each of the Big Three tends to spend between $1 and $5 billion on each data center project. Chip fabs for major manufacturers cost at least $1 billion each to build, with the newest, most innovative fabs trending toward $5 billion each or more..

Apple. In 2021, Apple announced a $430 billion five-year plan to expand its data center and chip manufacturing footprint, according to Data Center Knowledge. The company’s 2022 data center construction plan in Iowa included a nearly two million square foot campus, with an initial budget of over $1 billion.

Microsoft. In 2021, Microsoft had over 200 data centers in 34 countries housing over 400 million servers. The company was on pace to build 50 to 100 data centers a year. It spends more than $1 billion a year on data center security alone.

Alphabet. Google announced a $9.5 billion investment for 2022 alone in its data center and office upgrades, up from $7 billion in 2021. Google currently has 30 data center locations in ten countries.

Mature and maturing data markets today

Now consider the value of today’s data in terms of how it’s being stored, managed, productized and shared. (Below is not an exhaustive list.) 

  • Digital advertising spending (wholly dependent on data observations and data-managed content) could generate $701 billion globally in 2023, according to Statista
  • The global market for data storage could reach $241 billion in 2023, according to Fortune Business Insights
  • The market worldwide for enterprise data management reached $89 billion in 2022, according to Grandview Research, and is expected to grow at a compound annual growth rate (CAGR) of just over 12 percent from 2023 through 2030.
  • The global market for data as a service (DaaS) neared $8.6 billion in 2022, with a forecast CAGR of 23 percent through 2032, according to Future Market Insights.

This year’s annual market potential globally for fit-for-purpose data and how it’s stored, managed, productized and shared is at least $1 trillion. It’s likely well over $1T, considering all the legacy and captive market segments that may not be accounted for.

Next time–Mapping unexplored data territory

This post serves as an anchor point that describes the existing market for data and related infrastructure and services as it stands. For the next post in this series, I’ll discuss where to start when it comes to harnessing new technologies to open or expand segments of that global market. Those are where the hidden opportunities tend to be.