Data is everywhere, and we’re increasingly generating more and more of it. The explosion in data growth has kick-started a new industrial revolution, with businesses taking the information and using it to build services that help us understand and navigate the world around us. From GPS apps that tell us the nearest place we can buy a pizza to genomic programs sequencing DNA in order to create new medicines and cure disease.
But it isn’t just international pharma and tech giants that have cashed in on the fuel source of the information age. Companies of all shapes and sizes have worked out how to profit from it by extracting the insight it contains and selling it back to us. By doing this, some of these companies, such as Netflix, Uber, and AirBnB, have gone on to become industry giants and household names themselves. The truth is, the data and tools are out there for anyone to use and have never been more accessible, and I believe almost any business can benefit from putting them to work.
What are smart services?
Services are the products of the 21st century. In the 20th century, businesses like Ford (cars), IBM (computers), and Microsoft (software) conquered the world by creating products that changed it. This century, Meta, Google, and Amazon (as well as many others) do the same by selling services rather than anything physical. Well, Amazon (and the others, in fact) does also sell products, but the majority of its revenue comes from selling services that allow others to sell through them in exchange for a cut of the proceeds.
What is it that makes them “smart” services, though? Well, the key is that, as well as selling data to us, they used advanced technologies like artificial intelligence (AI) and big data analytics to pull insights from the data and provide it in a form that makes our lives richer, simpler, or more low-friction. Google is a great way of finding information, but it doesn’t just search all of the internet and return whatever most closely fits the text or speech that we’ve searched for. It uses AI to get a deeper understanding of what we're looking for and to rank the possible results in the order that we're most likely to find them useful. Likewise, Facebook doesn’t let us search and add our friends. It uses algorithms to suggest the people we’re most likely to want to connect with, as well as to provide us with news and entertainment content it thinks we’ll enjoy.
Netflix and Spotify are two more really good examples. They both provide us with an instantly accessible library of content, but beyond that, they use the data they learn about us, and their millions of other users, to select the movies we're most likely to want to watch and the music we like to listen to.
That’s the basics of what I call “smart services” – not just huge piles of data we can search through to find what we want, but tools and applications that help us to make the most of them.
The smartest of smart services often find ways to go on to create entirely new revenue streams with the data they’re generating. For example, Google and Facebook advertising services take what they learn about us as we search and browse the internet, sell it (indirectly) to advertisers by allowing them to put ads on the home screen of people who fit their customer profile.
In China, Didi Chuxing – a rival ride-sharing service to Uber – takes the information it gathers on the journeys and movements of its half a billion registered customers and sells it to authorities and transport businesses to help them plan roadworks and infrastructure work through its Smart Transportation Brain service.
Meanwhile, US company Automated Insights harnesses the power of natural language processing (NLP) – an AI technology that lets computers “understand” human language – to scan economic, meteorological, and other data sources and compile automated reports and articles for sale to media companies and businesses. And San Francisco-based fashion seller Stitch Fix uses AI to predict which items of clothing perfectly match the shape and taste of its customers and sends them out through a subscription service.
Any company can create smart services
As you can see, smart services are already revolutionizing a great many markets and fields of industry. In fact, it's hard to think of an area of business or consumer services that hasn't been disrupted by the arrival of AI and big data on the scene.
Part of the reason they have become so ubiquitous is the tools and platforms that have emerged to provide the necessary infrastructure – from data gathering to storage, processing, and operationalizing – "as-a-service ."Whereas when Netflix started its streaming business over a decade ago, it began by building vast quantities of networked storage servers to hold all of its content, along with the data it generates, today everything sits in the cloud on Amazon’s AWS servers. This means companies putting the infrastructure in place only pay for what they are using and lowers the barriers to entry enough that almost anyone with a game-changing idea can put it to work and see what happens to their industry. You can even hire actual robots as-a-service to build your own robotic warehouse or manufacturing empire from companies like Invia Robotics, so you don’t have to be Amazon to take advantage of the efficiencies of workplace automation.
All of this means that today, your ability to innovate is the key differentiator between your business and the competition when it comes to capitalizing on data and new technologies. In many cases, budgets and access to tech skills and infrastructure are no longer the challenges. This means there is a more level playing field and more chance that good ideas will make it into the world – which is good news for businesses and consumers. We often hear it said, "every company is a tech company now," and that’s because just about anyone has the opportunity to harness data and technology in order to improve the way they do business.