Data Business Models
Context: FIT1043_MOC · how organisations create/capture value from data · traditional IT models vs models unique to data · (Ray Wang, HBR)
Quick Revision
- 🎯 Objective: classify how a data business makes money ➔ four data-specific models plus the traditional IT ones.
- ⚡ Key Constraint: many DS firms reuse traditional IT models (SaaS/consulting/CRM); only four models are genuinely unique to the data world.
📝 Core
- Business model ➔ the rationale of how an organisation creates, delivers, and captures value (economic/social/cultural).
- Traditional IT models ➔ many DS companies fit these: SaaS, consulting, CRM (e.g. SAS = software vendor and consultancy).
- Four data-specific models (Ray Wang, HBR):
- Information brokering ➔ buys and sells data/information for others.
- Information-based differentiation ➔ a differentiated service built on the data (superior reviews/range) — Amazon.
- Information-based delivery network ➔ delivers data/information for others — Reuters, Plentisoft.
- Information provider ➔ sells the data/information it collects — Nielsen.
- Amazon case ➔ an “assembly line for retail”: info-based differentiation (superior reviews/range) + info-based delivery network (directs customers to marketplace retailers, provides their support/logistics).
⚖️ Core Decision Matrix
| Data model | Value move | Example |
|---|---|---|
| Information brokering | buy & sell others’ data | data marketplaces |
| Info-based differentiation | better service built on data | Amazon |
| Info-based delivery network | deliver data for others | Reuters |
| Information provider | sell data it collects | Nielsen |
⚠️ Common Mistakes
- 💡 Most DS firms aren’t novel business-wise ➔ they run traditional IT models (SaaS/consulting/CRM); only the four above are unique to data.
- 💡 One firm can span models ➔ Amazon is both differentiation and a delivery network; classify by the value move, not the company.
🧠 Active Recall
Name the four data-specific business models and place Amazon.
Answer
- Short answer: Information brokering, information-based differentiation, information-based delivery network, information provider. Amazon = differentiation (superior reviews/range) plus a delivery network (routing customers to marketplace sellers).
- Why: Create/deliver/capture value ➔ each model differs in how the data itself is monetised.