Embracing privacy concerns to realise the opportunities of Data as a Service (DaaS)

Information may be the main currency of 21st century business, but what’s important is what companies do with their data, not necessarily how much of it they have.  

Gathering useful insights from disparate departments and siloed data lakes requires the time, skill and resources that many organisations simply do not have.

Outsourcing the task to data-as-a-service (DaaS) specialists, then, has become increasingly common. But is this growing trend fundamentally at odds with the new conventional wisdom that people must retain control over their own information?

Data is hugely valuable, but it’s not the easiest medium to work with. Companies often find they build up masses of information from different systems and departments, but have no way to clean, validate or learn from it.

DaaS solutions can provide the data that companies need, but don’t have access to through their own channels.

Alternatively, they allow companies to outsource the intricacy of data management to specialists. DaaS providers store and organise data, whether text, images, sound and video, so that they can provide the right information, to the right person, at the right time.

It’s a growing market, estimated to be worth $1.7 billion by 2024, and the benefits for business are obvious.

It provides access to key insights, integrating “data lakes” and aligning information from different departments, without companies having to lift a finger.

It also sidesteps the growing problem of a data scientist / data engineer skills gap – a workforce shortage that means expertise in this area currently comes at a considerable price.

In a nutshell, DaaS offers scalability and increased efficiency, allows data to be transferred between platforms, and saves on specialised skills and upfront IT costs.

So far, so good. But the sector isn’t without its challenges, chief among them being the privacy implications of outsourcing data tasks to a third party.

From the dawn of data mining, the industry has been built on the premise that personal information was free. Consumers were happy to share their details in return for services such as social media accounts, email newsletters or retailer loyalty cards. 

But recent years have seen a slew of data privacy blunders that have dented public trust in that model. And scandals have not been limited to stolen credit card details or leaked email addresses, they have struck at the very heart of what’s important to people.

In 2018, for example, it emerged that Cambridge Analytica had mined Facebook data, without permission, to build software that attempted to influence the 2016 US Presidential Election.

The following year, the UK’s Information Commissioner ruled that London’s Royal Free NHS Foundation Trust had broken the law when it gave 1.6 million patient records to an artificial intelligence company.

The records, which included information on HIV status and mental health history, had been shared with Google-owned DeepMind as part of a clinical trial designed to identify acute kidney injury, but the body found that the subjects had not fully consented.

Highlighting the need to reconcile our current data security disparity, Information Commissioner Elizabeth Denham said at the time "There's no doubt the huge potential that creative use of data could have on patient care and clinical improvements, but the price of innovation does not need to be the erosion of fundamental privacy rights.”

The general public and regulators now believe individuals should retain control over their own information, and the data industry as a whole is responding to this.

In the DaaS spaces, there has been a marked shift away from public cloud-based storage systems towards private cloud or hybrid solutions that split data storage between on-site and private cloud locations.

These, of course, offer greater security and control, but there is more going on behind the scenes.

The heavy emphasis on complying with the European Union’s General Data Protection Regulation (GDPR), which came into force last year, isn’t just about avoiding the €20 milllion fine. It’s about working to high data standards.

GDPR is the most stringent set of privacy laws globally, but it is not alone in its intention to protect personal data.  Regulations in the US and emerging laws in countries such as China and Japan all contain the same underlying principles – principles that protect the privacy of data as well as the integrity of data.

It stipulates, for example, that data should be collected lawfully, for a particular purpose and it should be accurate.

Primarily, this defends the rights of the individual, but it also protects against business decisions being made based upon outdated, irrelevant or plain inaccurate information.

We are awash in data that could be used to drive businesses, transform healthcare and modernise manufacturing, but the key to harnessing its potential is understanding how to use it.

Companies, lacking the resources to extract actionable insights from raw big data, are turning to DaaS suppliers, and while, on the face of it, this may appear to contradict data privacy, the truth is quite the opposite.

Because such providers have the data science expertise to understand that the clean, accurate data privacy the law calls for are the best foundation for reliable insights, backed by consumer and business confidence.

Hampleton Partners is at the forefront of international mergers and acquisitions and corporate finance advisory for companies with technology at their core. Hampleton’s experienced deal makers have built, bought and sold over 100 fast-growing tech businesses and provide hands-on expertise and unrivalled advice to tech entrepreneurs and companies which are looking to accelerate growth and maximise value.

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