Why the Business and Commerce Battles in the Digital Age are over Data as the New Oil

Why Data is the New Oil

Data is the New Oil, proclaimed, India’s Richest Person and the one of the World’s leading Businessperson, Mukesh Ambani. He was referring to the fights over data in the digital age being similar to the battles over Oil in the Industrial Age.

As Oil was the Lubricant that made the Industrial Economy going, Data is the new currency in the Digital Age.

Indeed, as can be seen from the recent developments and trends concerning the Big Tech Titans such as Facebook, Google, Amazon, and Apple, the escalating fights over the kind of data, the classification and categorization of such data, and about who controls the “flow of data”.

The parallel or the analogy in the Industrial Age was all about who has the most oil, who can extract such oil profitably and without too much investment, and more importantly, who controls the flow of oil in the world’s navigation routes.

In addition, just as physical battles were fought over oil, the digital age has battles over who has access to data and a virtual free for all over who can make the most of such data.

Why Control and Access to Data is So Important for Firms and Marketers

So, what is it that makes data collection, data analysis, and data analytics so important to the Tech firms or for that matter, any firm? Further, why do marketers pay a premium to have access to consumer data that they so badly want?

The answers to these questions are that data about users allows firms to profile them, target them with selective marketing, use their browsing and purchase history to track their online behavior and tailor the ads and the marketing messages accordingly, and most importantly, use such data to segment consumer categories and profile such categories based on demographic, gender, location, and other marketing attributes.

Examples from the Real World

As marketers and online commerce portals such as Amazon use advanced Artificial Intelligence powered Analytics and Big Data driven algorithms to recommend products and services, having access to user data is paramount for such firms.

Moreover, Facebook has many Third Party Apps and firms who use such data for political campaigns, propaganda efforts, and more nefarious purposes such as for frauds and other cybercrimes that are possible only if they have access to user data including personal and financial information.

Thus, all firms and marketers in the Digital Age are engaged in battles over Data whether such data is used for good or bad purposes.

The Importance of Data for the Users

Having said that, it is also not the case that user and consumer data is only useful for marketers. On the other side are the users themselves who need to consume data in Gigabytes and Terabytes if they are to browse the web on their computers or engage in Smartphone browsing.

Indeed, with the Exponential increase in computing power, the parallel need for humungous data usage runs concomitant with every new Smartphone model.

As all of us notice, each new model has higher data storage capacities and larger SD (Storage Device) as well as External SD card capabilities.

As the computing power of chips increases exponentially, the result is that all applications become more data intensive and dependant on ever increasing data needs.

Apart from this, data is also needed by Personal Computer users as the workplace applications and more importantly, the applications that are deployed on the Cloud need larger front end and backend databases.

Indeed, while most corporates now host their applications on the Cloud, they also need to have adequate storage even if the desktop devices are Lean. For those who started their careers in the 1990s, there was a time when the Hard Disk and the RAM (Random Access Memory) were in the single and double digits even in the most advanced PC models of that time.

We have come a long way since then where even a low end Smartphone has more computing power and storage space than the Apollo Spacecraft modules in the 1960s and the 1970s. This is one of the reasons why access to data and control over its flow has become the defining battles in the Digital Age.

How Hackers and Data Theft Resemble the Industrial Era Firms Flouting CSR Norms

Any discussion on how Data is the New Oil cannot leave out the aspect of how the hackers of the present age represent the pirates of the Oil Age and the other aspect about how countries with rich oil reserves were often suffering from the Resource Curse or the stark income gaps between the owners of the oil and the rest of the citizenry.

This can be seen in the present age as well as old world Telemarketers and even eCommerce firms sometimes are left behind in the race for data as they simply cannot afford cutting edge technologies to capture and harness data. In addition, concerns over privacy and security of data resemble how Industrial Era firms often were accused of environmental pollution and ecological destruction.

Conclusion: Reliance Oil and Jio

Returning to the opening quote, Reliance’s Jio has indeed started what can be called a Massive Battle over Data just as the earlier patriarch, Dhirubhai Ambani, started something similar with his vertical and horizontal integrated oil business.

This is also the case with many emerging Startups in the Digital Age whose founders have realized the importance of Data as a Commodity in the same manner in which earlier generations of businesspersons fought over oil. To conclude, Data is Indeed the New Oil.


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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


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