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Matt Hedberg on Data and Security Transformation

The data lifecycle is rapidly evolving, but before enterprises and society can enable a full digital transformation, a security transformation is required.

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By Matt Hedberg
Published November 10, 2022 | 2 min read
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Key Points

  • The data lifecycle is evolving rapidly, through cloud technology, artificial intelligence, machine learning, and robotic process automation.
  • Data security will play a vital role in digital transformation. Without a rethink of the security fabric of today, tech at large may struggle to move and thrive in the cloud.
  • The software market should be one of the most critical compounding mechanisms over the next ten years, with growth driven by an increase in cloud data — and alternative data driving our digital reality.
  • Market volatility and economic turbulence should only fuel demand for alternative data, as business looks to gain a competitive edge and investors seek to navigate uncertain markets.

Individuals today are storing unparalleled levels of data. This will have a significant impact on markets because data is becoming an increasingly critical commodity to protect and monetize. Organizations able to successfully leverage data now will likely be well positioned for success in the future.

Alternative data is all data derived from non-traditional sources, including app usage, transactional behaviors, social media activity and geolocation trafficking. Increasing demand for alternative data is set to be a game changer for business and currently demand is outpacing supply.

Emerging technology

Technological advancements in areas such as AI, machine learning and cloud computing should play a part in transforming the data lifecycle. This evolution in data-related technology is expected to make it easier for companies to gather and analyze new forms of data.

The outcome of this heightened accessibility and analysis will mean insights on consumer demands and behaviors could accelerate learnings, allowing business to further refine and target their offerings. Emerging technology is set to continue the prevalence of data’s impact on the markets.

Ultimately, software is likely to continue to be one of the most important compounding mechanisms in the market, with the potential to offer investors a long-term return on both growth and profitability.

The demand for alternative data

In the US alone, the alternative data market is valued at roughly $3 billion and is predicted to grow at a 53% CAGR between now and 2030.

While much of that growth is being driven by increasing demand from organizations looking to identify fresh insights and actionable investment opportunities, alternative data is important to individuals too.

For example, consumers lacking credit scoring data may make use of alternative data sources such as asset ownership or utility payment records to secure a loan.

However, the desire to capture and harness this data is ultimately driven by institutions looking to gain a critical competitive edge. The potential immediacy of alternative data could transform business decisions, allowing companies to adjust and modify output in real time. This ability to make in-the-moment decisions around consumer behavior is a significant outcome of alternative data.

Looking towards a security transformation

When considering the alternative data space, consumer data privacy is of utmost importance – and serves as a key regulatory risk set to impact the future of the industry. As ESG factors and the regulation of big tech continues to appear in high-profile conversations, data privacy will be pulled in as well.

Another key trend is the cloud technology movement, which during the pandemic came to the fore in terms of connectivity and software accessibility. Before enterprises and frankly the general society can enable a full digital transformation, we believe a security transformation is required.

Over the next decade, we expect this ongoing security evolution to become a major and durable trend in the data sector, and an important piece of the puzzle that is often overlooked. Companies that can capitalize on this increase in security spending could stand to make significant gains in the future.

A new and emerging mega-trend within this space is the growth of ‘DevSecOps’ – a combined approach to the IT lifecycle that sees app developers, security professionals and business owners working together, to produce secure applications quicker and taking shared ownership in the success of a project.

Looking out over the next 10 years, one key observation is the need for companies and investors to move faster to the future and leverage technology in new ways. This leaves us optimistic about where software is today, but more importantly, where it's going in the future.

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