Data gravity: The new KPI for tech companies

Some cloud vendors are beating competitors with their ability to accumulate knowledge about customers and deeply understand their needs

Data gravity: the new KPI for tech companies

Data is the new natural resource of our time. Information that was previously thrown away is transforming every facet of business as organizations use technology to query and analyze data in real time to help them better understand their customers’ behaviour and markets. Such knowledge and insight is helping businesses make better decisions and improve performance. 

Yet for data to be worth anything, organizations must have the ability to store it. With more data being created every 20 minutes than is currently held by the Library of Congress, many organizations are overwhelmed by petabytes (one petabyte is the equivalent of 20 million filing cabinets of text). As a result, companies are moving to the cloud—not only because of its flexibility, cost efficiency and reliability, but because of the impact of “data gravity.”

What is data gravity?

The concept of data gravity was first coined by Dave McCrory. It relates to the idea that as organizations adopt and migrate data to the cloud, data that remains outside of the cloud starts to gravitate to those applications running in the cloud.

In the past, it was difficult to move large chunks of data because it was time-consuming and expensive. Now, with active data replication a reality, the mass of data migrating to the cloud is increasing. As a result, it makes sense to have the applications that will access and manipulate that data in the same cloud in order to maximize efficiency.  

McCrory predicted with data being moved to the cloud and applications being written for the cloud, the two activities mutually reinforce each other, increasing the gravitational pull: “As data accumulates, there is a greater likelihood that additional services and applications will be attracted to this data. This is the same effect gravity has on objects around a planet.”

Nowhere can this gravitational pull be seen more than at Amazon Web Services. As the fastest growing enterprise technology company in history, it holds more data in its cloud than anyone else and has five times the utilized capacity of its nearest 14 competitors combined. This is not because of lock-in, but because of how data behaves: As applications and services are created to feed on the datasets, they create more data, which in turn gets analyzed by other applications that create their own data and so on, leading to a virtuous circle. 

Data gravity the new KPI for cloud vendors 

For Amazon and other tech companies, such as Google, IBM and Microsoft, data gravity is the new key performance indicator (KPI) as they compete to hold data by not only proposing better prices and better services, but in the ability to accumulate knowledge about their customers and deeply understand their needs.

With Apple and Spotify moving data from Amazon to Google’s computing-on-demand service, the fight for data gravity is just getting started. We are already starting to see the massive ecosystem of applications running on AWS, Microsoft Azure, Google Compute Cloud and IBM SoftLayer as they all compete to provide analytics using advanced technologies, such as machine learning algorithms, to provide more insight into all the meta data they collect. This can only be good news for businesses that are finding they are able to transform their operations through the use and placement of data in the cloud. 

With increasing masses of data spinning around the cloud computing galaxy in the future, where it is held will increasingly determine for tech companies where the money is. Services and applications are nothing without it.

Just like gravity in the real world, you can’t fight it: Data is being moved to the cloud and services and applications are going there, too. For tech companies and businesses not to be left behind, may the force must be with you.

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