How to make money with Open Data

One of the big questions people are talking about (sometimes, at least) with open data is how to make money with it. While it is great to see so many governments getting into open data with a fervor, it’ll really take off and become a veritable treasure trove when we see businesses get involved. And by that, I mean producing and releasing their data. Of course, as with everything, they need to find some money in it.

Why publish data?

I’m often asked why companies would ever consider publishing their data. If the goal is being competitive and making money, why would any business give its data away? Especially, why for free? Well, there are a number of reasons.

A business which makes its data a major part of its business, especially if selling that data, would be advised to give some of it away for free. Maybe the whole point of the business is the selling of an API, or big data services. Giving a subset of the data away is a means of allowing people to sample the data. Also, it gets people using the data and provides a logical growth point into their pay services.

If selling your data isn’t a central part of your business, giving it away frees up your resources to focus on the core business. Any resources that were focused on selling the data (or making it accessible) can be redistributed and the data can merely be made open. Only a small expenditure to maintain the data is needed. This giving away of data can also garner attention for those core services you’ve now made more robust.

A third reason is to support and foster information sharing. If you release your data, and others use it, they’ll (ideally) release their data. If they don’t, you’ll still be getting good publicity for being a responsible corporate citizen. Further, by increasing the sum total of open data, that data becomes better and will promote further increases.

Why consume data?

The other question I’m finding people asking is why use open data at all? Why not just generate your own data? Well, a big reason is cost overhead. Every dollar, hour, widget, what-have-you, you put into generating data takes those same resources away from your core business. If that business is making data, then you’re not losing something. If that business is getting eyes on screens, maybe you are.

Think about all the things you need to do to maintain a data set. You have data entry, verification, authentication, collection, dissemination, and all the various infrastructures associated with those activities. Wouldn’t it be nice to simply connect to someone else’s service? Now, think about combining that data with your own internal data. All of a sudden you’re getting more bang for your buck.

Show me the money

I can hear you now, “Okay, you’ve convinced me. How do I make my money, though.” Well, let me answer that. In the same way that people have been making money for generations: Provision and Consumption.

Data Provision

In data provision, you’re making money off your data by making it available to others. In the open data context, you’re making it easier to get the data itself. Take Import.IO and Socrata for example.

Import.IO is a sophisticated tool for gathering data from any website and transforming it into usable data sets. You can set up the service to crawl a given website and extract defined data from similar pages to make any data set imaginable. This is a powerful tool for taking sites that aren’t providing APIs or data sets and making them into a usable, parsable resource.

Socrata, on the other hand, is taking existing data sets and making powerful APIs out of them. If you have any data imaginable it can be daunting how to make it universally accessible. An API is a very useful tool to get your data out there.

Data Consumption

On the other side of the field is data consumption. This is where you take in open data to make your services better. Think of open data as your value added element.

In this category we have Ajah. Ajah takes in open data about charities and their contributions, combines it with their own internal research, and makes a more valuable product. They then sell access to this refined data.

Epilogue

With a few simple actions companies can begin making money from open data (supplementing their own products) and contributing to the body of open data we have (good relations; free advertising). However, it is very important that this open data is created and made properly available (no restrictions on access or use). Without a vibrant, and open, sharing of information we can’t hope to achieve such lofty goals as open government and responsible business.

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