The Big Mystery: What’s Big Data Really Worth?

The setup: financial accountants are trying to figure out what data is worth on the books:

“It’s flummoxing that companies have better accounting for their office furniture than their information assets,” said Douglas Laney, an analyst at technology research and consulting firm Gartner Inc. “You can’t manage what you don’t measure.”

The Big Mystery: What’s Big Data Really Worth? – WSJ.

An estimate on how much Kroger makes from their data:

Mr. Laney and others estimate that Kroger rakes in $100 million a year from data sales. But Kroger executives are mum on the subject.

It’s too tough to implement an approach where firms are self policing themselves on how they treat data gathering (expense vs. investment).

Among the issues: how to account for time employees spent gathering data—as an expense or a capital investment?

Companies also would have to estimate the shelf-life of their data, figure out its future worth and track and report any changes in its value. Crunching those numbers would be relatively easy for a physical asset like a factory. But in the squishy world of intangibles, there’s little precedent for such calculations.

Ultimately, the quality and value of the data varies from firm to firm.  Additionally, how complementary processes are set up to leverage the data are just as important:

“Data is worthless if you don’t know how to use it to make money,” said Laura Martin, an analyst with Needham & Co. Information on individual users loses value over time as they move or their tastes change, she added. That makes data a perishable commodity and more difficult to value at any given moment.

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