Short Sighted Silicon Valley Limits Potential of Data Markets

I’ve been following the great coverage by Paul MIller over at Cloud Ave about whether Infochimps running from the Data Market business, and Discussing Data Markets in New York City. He’s touched on any interesting topic around the viability of data markets as a business, and the fate of several of the most high profile players in the space.

In 2011, when it comes to data API marketplaces and providers I tended to showcase players like Factual, Kasabi, DataMarket and InfoChimps. In 2013, we’ve watched Kasabi disappear, and the migration of InfoChimps from an open data market, to a enterprise data platform. While Factual and Datamarket appear to be going strong.

I think this reflects a common, lack of imagination by Silicon Valley because they are so focused on making money, they miss the need to support critical aspects of industries, that are required to allow for the growth they want to see.

While I feel there is money to be made off data marketplaces, however right now I think it is critical that we invest in people standing up and exposing data, not just focusing on making money off this process at levels that VC’s deem adequate.

I make the same argument with API providers, its not that there isn’t money in standing up APIs, but we need to heavily invest in the education of potential API owners and the healthy standing up of APIs.  

There will be plenty of money down the road from APIs and data marketplaces, but by always looking at it through a Silicon Valley perspective, we are going to stifle the oxygen necessary for a truly healthy, vibrant space.

I’m spending time looking through the API service provider space, and last week I noticed the big gap in there being API deployment services vs. API management services. This imbalance is due to a gold rush by heavily VC funded API service providers looking to capitalize on the enterprise looking to proxy their existing infrastructure with a new breed of API services.

I’ve argueed this with execs at unamed API service provider companies, on whether the next growth in APIs will be from new, API providers or from the enterprise. I was told I’m naive and it shows my inexperience that I think it will come from outside the enterprise. While there will be money to be made off the enterprise evolving their existing infrastructure in this new way, in reality this is just a small evolution in business not anywhere near a revolution. Where big change in business sectors and economies will occur is when companies, organizations and government who didn’t jump on SOA bandwagon understand the value of opening up data, and making available via APIs in this new way.

To get here we have a LOT of work to do. We need education, tools and services available to get these companies, organizations and government up to speed, publishing data and standing up APIs. Once this occurs, there will be plenty of money to be made in mobile, tablet, devices, analysis, visualations, curation, syndication and other areas you hear Silicon Valley tooting about. But VC’s are focused on the end goal, not necessarily how we get there.

Let’s get to work making sure there are open source tools and content to help any company, organization or government group  get their data marketplaces up and running. Let’s not focus on making a fortune from it now, let’s just make sure it happens. It’s far to important to suffocate with short term visions of making profit.