Why Every Company Is Now A Data Company


There’s a magic formula: “When a company uses data to personalize its inventory, it creates a better UX.”

That’s the central argument behind “The Spotify effect: Why every company is now a data company,” a post this month in The Next Web by Marius Moscovici, the founder and CEO of business analytics firm MetricInsights.

Guaranteed Disruption

“When it is used well, data is a guaranteed disruptor,” Moscovici says, citing large and small examples ranging from Amazon, Netflix, and Macy’s to Getty Images, Palantir, and recent IPO Castlight Health. “Valuing a company based on its data prowess is smart, because data is what will drive future value,” he says.

Moscovici explains how data lets retailers dynamically price inventory in real time to optimize profits while credit card companies can analyze historical transactions to fight churn—long before users actually abandon a service. In the streaming music industry, better data allows more sophisticated recommendation systems incorporating everything from the users’ mood to their location and time of day.

From Data Nerds to Data Companies

At New Relic, we couldn’t agree more. After all, if we are all data nerds, it only makes sense that we pay attention to companies that leverage data to provide us with a superior experience. Our customers know that data lets them do whatever they do better. Groupon, for example, uses data to scale seamlessly during traffic bursts that can easily double or triple normal levels – sometimes reaching 70,000 concurrent users! Ticketfly, meanwhile, uses data to power a customer analytics suite called Fanbase that gives promoters greater insight into sales, attendance, and social sharing data for driving loyalty and mobilizing influential customers.

As Moscovici puts it: “Users have spoken. They like personalization, and that boils down to data.”

Tablet image courtesy of Shutterstock.com.


Fredric Paul (aka The Freditor) is Editor in Chief for New Relic. He's an award-winning writer, editor, and content strategist who has held senior editorial positions at ReadWrite, AllBusiness.com, InformationWeek, CNET, Electronic Entertainment, PC World, and PC|Computing. His writing has appeared in MIT Technology Review, Omni, Conde Nast Traveler, and Newsweek, among other places. View posts by .

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