What is Alternative Data?
Alternative data is data from non-traditional data sources. What counts as alternative data will depend upon your industry and the traditional data sources that are already widely used by you and your competitors. The value is simple: the use and the analysis of alternative data drives unique insights and actions for your business beyond those that regular data sources are capable of providing. Alternative data can therefore be a very important competitive differentiator.
Web data is the most important source of alternative data
When people talk about alternative data, a couple of data types commonly come to mind: satellite data, sensor data and web data. Of the three, web data is by far the biggest in terms of size, the most diverse in terms of subject matter and therefore has the widest application to businesses of all kinds.
The scale and diversity of the data on the web means that you can know anything you want about your industry, your competition and your customers and you can know it right now. Using web data it is possible to create a dataset that is unique and highly relevant to your business, meaning that you can answer questions that simply could not be answered previously.
Alternative data is always changing, you need a strategy now
We are in the midst of a data revolution and the data that you use to power your business is at least as important as the technology that stores, processes and analyzes it. Technology is always changing and in order to remain competitive, you know that your technology needs to be constantly updated and improved. The same is true of the data that you use with that technology.
Over time what was once considered alternative, non-traditional data becomes widely adopted by all companies, while new sources of alternative data are constantly emerging. It is important that you grasp the opportunity and begin to form an alternative data strategy today or risk being left behind.
Alternative data and artificial intelligence
Artificial intelligence is the next lever of business automation and over the coming years the development of new products and services across businesses in all industries is going to be driven by AI.
Where the development of AI products is concerned, what really matters is the data that you have available to train your machines. Today’s data is driving tomorrow’s products. In the new world of artificial intelligence, product and service innovation depends on you having a data-edge as well as a technological-edge over your competitors and that means using alternative sources of data that others are not using.