The next wave of digitisation is a huge opportunity for the economy – however for Australia to seize this opportunity, it’s crucial that business leaders not only control their data, but also control its monetisation.
Data is increasingly the core of value creation in all industries and as a result, data must be considered a corporate core competency that cannot be outsourced without losing control of an organisation’s business model.
In a recent Survey, 85 per cent of Australian executives recognised digital sovereignty as an important or very important goal for their digitisation strategy, reflecting the value companies place on data ownership and aggregation.
This is a concern for Australian business leaders as they face the current economic challenges of COVID-19. Many industries have become reliant on the public cloud for business operations while navigating a new remote workforce, giving power to established digital suppliers over alternative private or hybrid-cloud solutions.
It’s important to note that being digitally sovereign doesn’t mean self-sufficiency. The key point is not who runs the IT, or if technologies are made or bought – but rather the bargaining power of the digital suppliers. For example, they have immense power if very few of them control the market, and especially if switching costs are high. This scenario can have severe negative effects both on businesses’ revenue and margins.
According to our recent survey, 75 per cent of executives believed the coronavirus would increase company dependency on global public clouds. A further 85 per cent confirmed their use of global cloud platforms to aggregate and analyse data.
Australian business leaders are not unaware or apathetic to the benefits of achieving digital sovereignty through decentralisation. Despite their reliance on the global cloud, it was also found that for 68 per cent of executives it is or will be part of their business model to sell data or digital services, showing that the value of data as a core competency is beginning to be understood.
In a decentralised digital world, every market participant is both provider and consumer. This means every enterprise becomes a cloud in the sense that it sells data and digital services to its customers – with that, it becomes a sovereign in the digital economy.
As a result, interest in data in expanding into the public sector. We are starting to see governments establish initiatives in a bid to strengthen the data economy and give businesses full control over their data by connecting users and providers under on homogeneous system, like the German federal ministry’s Gaia-X project.
From now on, the global data volume will double every two to three years – and the majority of this data will not be created in clouds and traditional data centres, but in factories, vehicles, transport routes and cities. Physical infrastructures become the digital platforms of the 21st century.
This data is mostly under the control of the enterprises that build and run these infrastructures – and it has enormous value. As an example, the data of connected vehicles has been forecasted to have a monetary value of US$ 750 billion by 2030.
However, to seize this opportunity, it’s crucial that companies not only control their data but also control its monetisation – the data-driven business models that drive revenue and margin. This is the real meaning of the term digital sovereignty for any enterprise.