Data, the New Oil?
Updated: Sep 28, 2021
From time to time, any engine demands an oil change to run smoothly and efficiently, no questions asked about it. Looking at the data, the decision for change is straightforward: Indicators like mileage or runtime justify the pit stop. Some people, like Sam Nakane, are going that far as to say: “Data is the new oil to keep every business healthy and thriving.” So, could we potentially see a correlation between oil and data?
Let me back up a bit.
Oil powered the world.
For more than 150 years, oil has redefined our businesses and societies. In 1865, when the Standard Oil Company, the predecessor of ExxonMobil, started to refine and distribute oil across the American continent, the oil ignited the industrial revolution. We all know these beginnings only from history books. But the strategy of refining oil and distributing it across pipeline networks embodied a death blow against coal mining. Gasoline and kerosene made the business case and elevated the world’s industrial capabilities to the next level.
During the 70s, I remember the anxiety of business leaders running out of oil. But afterward, we (or better: the oil companies) found enough oil to make any dependency disappear.
Today, we face a different situation: despite having more than enough oil in the ground, its need starts disappearing. Electric vehicles are passing us in plain sight - every day. The automakers plan to launch new electric cars across the world. While we don’t have an exact usage pattern to predict future needs for oil, the model I prefer is represented by a bell curve. Figure 1 implies the world’s combined oil production will come down, sooner or later.
And as life teaches us, everything comes to an end – at one point in time.
Figure 1: World Annual Oil Production (1900-2018) and Peak Oil (2020 Scenario)
Data powers the world, too.
Like oil did and still does, data empower the worlds’ industrial operations and influence all of our private lives, more or less. Large and small corporations rely on the data streams and their Big Data, with unimaginable volumes and wide varieties of data types. Our ancestors started drilling for oil and refined it. Today, data scientists do the same with data: Drilling for insights and creating data models.
Figure 2: The Digitization of the World (Source: IDC Whitepaper, 2018)
Is this data drilling similar to fracking? Certainly not, because the base material of data isn’t as black and greasy as oil. But in my imagination, the comparison is valid.
Considering the growth rate of the entire global datasphere, we’re still in the early slope of a potential bell curve (see Figure 2). But the fundamental rule “What gets up will come down” needs to be considered for the data world as we see it for total oil production.
Ok, the theory of an “end of data growth” might not fly well with you. “This theory is outlandish,” you might say - or just baseless of any scientific thinking.
What if data as we know, consisting of bits and bytes, would radically change, evolving to something we even can’t imagine? Around 1850, an automobile was unimaginable for the farmers in Pennsylvania, just years before the first oil was found. I’m following the theories and mindsets about the Evolution of Data very closely. But anything I read centers around today’s understanding of data – like an untouchable law. Considering the speed of technology change and data growth within the last 15 years, I assume the global oil production will peak within 10 to 20 years.
I’m founding my assumption of reaching a global data peak on two factors. First, new inventions to store and share communications and events will replace data as we know it today. And second, the increasing walls of privacy will force the global data footprint to decline, eventually.
Predicting the future.
Predicting the future is possible if you own a statistical model. But iIf you don’t possess such a model, any forecasting seems to be a deep look into the glass bowl. Some of you grew up with the experience of ‘being always connected.’ Therefore, to imagine a world without data might be Science Fiction for you.
When the oil shortage shocked the world fifty years ago, nobody could think to bet on anything other than oil. We don’t see the alternative data world right now, but I’m advising: Get mentally prepared for significant changes to come.
However, until these changes occur, you need to carefully observe where your data go and where they are stored. For now, you must manage and maintain your data warehouses, databases, and cloud data stores.