Monetizing the Data Stream

Know what an ‘exabyte’ is? I just found out – a measurement of data volume that represents the equivalent of 50,000 years of high-quality streaming DVD video signal. World data stream is currently five of ‘em. Projected to go go up tenfold at the current rate of increase in just four years.

The days of “unlimited” are probably coming to an end. I’m referring to open-ended access to a variety of data-based services, mostly web-connected. The infrastructure just can’t keep up with the growth. Oh, well, it was nice while it lasted.

There has been a true economic anomaly in place for some time – free storage (i.e. email accounts, cloud computing applications, social network systems, etc.) It costs money to provide this stuff, but because the cost of servers and software (much of it open source) became so (relatively) cheap, it became common to provide it free, hoping to monetize the eyeballs through advertising revenue (and probably some other offsets).

But moving this data around is starting to be a bottleneck issue. Wireless networks, increasingly the backbone of the data system, are extremely expensive. You’ve probably noticed, as I have, the new incremental pricing structures for uploading and downloading data. I think it’s going to impact cell phone, email and all Internet-related functions.

We all hate paying for stuff that was previously free, but personally, I have no problem whatsoever with paying for what I actually use. I wonder what kind of innovation we can expect in how they’ll “package” data volume.

Another underlying aspect of this dynamic is how there’s slowly evolving a change of places between content and infrastructure providers. For a while there, content was king and infrastructure was just,…,well, infrastructure. Now there’s a glut of content and (soon) not enough “pipes” to deliver it. That should make for some interesting dynamics in the relative muscle of the prominent players in the space. Stay tuned.

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