This will only get worse. The latest announcement from the Thomson Reuters GFMS service, the premier data analytics environment around gold and silver, indicates that their Copper commodity service on Eikon now moves from mining company to mine by mine performance. “It all adds another data-rich layer of fundamental research to our customers’ copper market analyses” says their head of research. And there, in that line, we have a “fundamental” issue that lies behind the torrent of announcements we see in the B2B sector at the moment. Think only of Verisk buying Wood Mackenzie last week at a price which went well beyond the expectations (17X ebitda) of counter bidders like McGraw Hill, and which shocked private equity players who relish the data sector but find it hard to imagine 12X as an exceedable multiple. The question is this: Risk management and due diligence are vital market drivers, but they are data-insatiable; any and all data that casts a light on risk must be included in the process; it is the analysis, especially predictive analytics, which adds the value; so who will own the analytics – the data companies, the market intermediaries (Thomson Reuters, Bloomberg etc), or the end user customers?

Those of us who come from the content-driven world – they were out in force at Briefing Media’s splendid Digital Media Strategies event last week in London – find this understandably hard to argue, but our biggest single threat is commoditization. Even more than technology disruption, to which it is closely related, data commoditization expresses the antithesis of those things upon which the content world’s values were built. When I first began developing information services, in pre-internet dial-up Britain, we spoke lovingly of “proprietary data”, and value was expressed in intellectual property that we owned and which no one else had. For five years I fought alongside colleagues to obtain an EU directive on the “Legal Protection of Databases”, so it is in a sense discouraging to see the ways things have gone. But it is now becoming very clear, to me at least, that the value does not lie in the accumulation of the data, it lies in the analytics derived from it, and even more in the application of those analytics within the workflow of a user company as a solution. Thus if I have the largest database of cowhide availability and quality on the planet I now face clear and present danger. However near comprehensive my data may be, and whatever price I can get now in the leather industry, I am going to be under attack in value terms from two directions: very small suppliers of marginal data on things like the effect of insect pests on animal hides, whose data is capable of rocking prices in markets that rely on my data as their base commodity; and the analytics players who buy my data under licence but who resell the meaning of my data to third parties, my former end users, at a price level that I can only dream about. And those data analytics players, be they Bloomberg (who in some ways kicked off this acquisition frenzy five years ago when they bought Michael Liebrich’s New Energy Finance company) or others, must look over their shoulders in fear of the day when the analytics solutions become an end user App.

So can the data holding company fight back? Yes, of course, the market is littered with examples. In some ways the entire game of indexation, whereby the data company creates an indicative index as a benchmark for pricing or other data movement (and as a brand statement) was an attempt to do just that. Some data companies have invested heavily in their own sophisticated analytics, though there are real difficulties here: moving from that type of indicative analytics to predictive analysis which is shaped as a solution to a specific trader’s needs has been very hard. Much easier was the game of supplying analysed data back to the markets from which it originated. Thus the data created by Platts or Argus Media and the indexation applied to it has wonderful value to Aramco when pricing or assessing competitive risk. But in the oil trading markets themselves, where the risk is missing something that someone else noted, analysts have to look at everything, and tune it to their own dealing positions. Solutions are changing all the time and rapid customization is the order of the day.

Back out on the blasted heath which once was B2B magazine publishing, I kept meeting publishers at DMS who said “Well, we are data publishers now”. I wonder if they really understand quite what has happened. Most of their “data” can be collected in half an hour on the Open Web. There is more data in their domains free on DBpedia or Open Data sources than they have collected in a lifetime of magazine production. And even if they come up with a “must have” file that everyone needs, that market is now closing into a licensing opportunity, with prices effectively controlled, for the moment, by those people who control the analytics engines and the solution vending. Which brings me back to Verisk and the huge mystery of that extravagant pricing. Verisk obviously felt that its analytics would be improved in market appearance by the highly respectable Wood Mackenzie brand. Yet if a data corner shop, let alone Platts or Argus Media, were to produce reporting and data that contradicted Wood Mackenzie, anyone doing due diligence on their due diligence would surely demand that Verisk acquire the dissenting data and add that to the mix? If data really is a commodity business, far better to be a user than an owner.

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