How to invest in the companies turning Big Data into big profits

Data has been described as the “new oil” for the internet era. With new gushers being located every day, how can investors cash in? Stephen Connolly gives his overview of the sector

Runner montage
Nike: a Big Data refinery
(Image credit: © Nike Inc)

As a species, human beings have been producing data for millennia. Yet if you add up all of the data created over that period – from the age of papyrus scrolls to today’s social-media age – almost all of it has been generated in just the last few years. This recent, explosive growth in information reflects the rapid expansion of internet access. Some 60% of the world’s population is now online and every click, search, swipe and stream on computers, mobile phones or other devices is noted somewhere. And the ability to nose around in all this data is incredibly valuable.

Businesses from retailers and advertisers to banks and insurers all stand to profit significantly if they can refine this real-time knowledge of what billions of people are up to or interested in, to fuel growth. It’s not for nothing that they call this “Big Data” the new oil – and right now the wells are gushing. Only last week, S&P Global, an $80bn US financial data provider, offered $44bn for IHS Markit, another New York-headquartered global business data group, which started life in 2003 in an outbuilding in a garden at a house in St Albans in Hertfordshire. These are large numbers, and even those who might once have dismissed seemingly arcane data as boring or worthless are being forced to take notice: we are now in the age of Big Data.

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Investment columnist

Stephen Connolly is the managing director of consultancy Plain Money. He has worked in investment banking and asset management for over 30 years and writes on business and finance topics.