DATA vs. SOFTWARE

Marc Andreessen famously stated “that software is eating the world.” Software companies are pushing the boundaries of technology, try and redefining the way that both consumers and businesses interact with it. I’d have to agree with Marc, he definitely knows a thing or two about technology. But I believe there is a shift of power, from software to data. Sorry Marc.

Take a look at a set of companies that we all know well – Google, Amazon, and Netflix. They all started out as software companies; but today, data is one of the key differentiators. Amazon – the wonderful e-commerce business first made it easy for users to get what they wanted by the click of a mouse. Google – their value proposition at first was the page rank algorithm/software. Netflix – took the pain away from renting movies in person through their subscription service.

Lets take a deeper look into Netflix. They started through a subscription service and built software to make for any easily accessible database of movies for their subscribers. Netflix came to the realization that the future wasn’t in delivering movies to a person’s mailbox, but instead in the wealth of data generated by people using the service. House of Cards is a perfect example of the benefits behind analyzing and utilizing that user-centric data. The creation of the show stemmed from monitoring the tags behind the most consumed content by Netflix users. The most popular tags from thousands of pieces of content were then analyzed and presented to the creative writers who then came up with a show surrounding a corrupt politician. Sex, drugs, corruption, politics … I’m a fan and I’m willing to bet you are too. Anyway, the fun doesn’t stop there for Netflix. They use recommendation algorithms to present more meaningful pieces of content after taking into account a user’s behavior towards a pool of content. We are talking about the ideal data-driven company that focuses on providing a sounder user experience, and benefiting immensely from this. 

Netflix, Amazon, and Google are all ahead of the curve. From the start, they understood very well that their services would soon be replicated and/or available by other providers out there. Recommendation engines and search algorithms lay in the open, no longer secrets locked up abroad.

Today, we are seeing a select number of technology companies popping up that consume multiple sources of data to create in-depth context. These applications will take into consideration social noise, geographical locations, browsing history, behaviors, and the list goes on. The data is being used to predict behaviors and personalize user experiences. Soon, you will find that “data-driven experiences” will be a household name. Maybe not to that extreme, but you get the point. Even more so, we will find that rich data will further expand the realms of machine learning, artificial intelligence, and other vectors in data science.

It will be the companies that realize the importance of user centric data that will both ease consumers lives, and drive their businesses onward.

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