What’s the Value of Your Data? And How Can You Protect This Asset?

Late in the autumn of 2016, Microsoft announced that its purchase acquisition of LinkedIn had been finalized for a price of $26.2 billion. The deal attracted a great deal of scrutiny from investors, and attention from commentators, who calculated that Microsoft had paid about $260 per monthly active user. LinkedIn had other assets besides its database of information on more than 433 million registered users worldwide, including a near-monopoly on professionally-oriented social networking, and significant relational and intellectual capital in its Silicon Valley-based workforce. But the user data—and the question of its worth—was at the center of most conversations about the deal.

Did Microsoft pay too much? Or was $26.2 billion a fair market valuation for what is essentially the world’s largest work history database?

The answers to these questions are far from simple or clear. There’s no precise formula for pricing user data in today’s business environment. But the questions are highly relevant for all decision-makers charged with keeping their business’s most valuable assets safe, even as this task grows increasingly more complex and daunting.

Data: The World’s Most Valuable Resource

It has become a truism among business leaders and financial analysts: data is the oil of the twenty-first century, the most valuable commodity in the digital age. Those businesses best able to make use of—and extract value from—their data will see the fastest growth and have the most potential to dominate their industries in the coming years.

But data is unique among highly valuable business assets in several ways, including the difficulty and complexity of accurately assessing its value. What also distinguishes data from other business asset classes is its tendency to exhibit increasing returns to use. Most conventional physical assets tend to depreciate in value over time: buildings age and require repair, technology systems become obsolete, etc. And the more often and more rigorously they’re used, the faster they decay. Data, in contrast, tends to become more valuable the more often it’s used.

In order for companies to maximize the opportunities that their data offers them, however, they need to make that data available to users, thinkers and algorithms across their organizations. Ease of access to data is what enables businesses to become more agile and more responsive to their customers.

Business Agility And Information Security Risks

Today’s businesses need information systems that will permit them to extract the greatest possible value from their data. Whether it’s remembering customers’ preferences to encourage repeat business, or deeply understanding website user experiences in order to increase cross-selling and drive online booking, data can be used to improve outcomes and solve business problems. Increasingly, this data is also being used to enhance customer experiences. But in order to be useful, this data must be captured, stored and made available at many points within and outside of the organizations.

Each of these processes—the data’s capture, storage, transmission, use and reuse—adds another point of potential information security vulnerability.