Open data economy: Eight business models for open data and insight from Deloitte UK

Two open data items of note from readers.

When I asked whether the push to free up government data was resulting in economic activity and startup creation, I started to receive emails from people around the United States and Europe. I’ll be publishing more of what I learned in our ongoing series of open data interviews and profiles over the next month, but two responses are worth sharing now.

Open questions about open growth

The first response concerned Deloitte’s ongoing research into open data in the United Kingdom [PDF], conducted in collaboration with the Open Data Institute.

Harvey Lewis, one of the primary investigators for the research project, recently wrote about some of Deloitte’s preliminary findings at the Open Government Partnership’s blog in a post on “open growth.” To date, Deloitte has not found the quantitative evidence the team needs to definitely demonstrate the economic value of open data. That said, the team found much of interest in the space:

“… new businesses and new business models are beginning to emerge: Suppliers, aggregators, developers, enrichers and enablers. Working with the Open Data Institute, Deloitte has been investigating the demand for open data from businesses. Looking at the actual supply of and demand for open data in the UK provides some indication of the breadth of sectors the data is relevant to and the scale of data they could be considering.

The research suggests that the key link in the value chain for open data is the consumer (or the citizen). On balance, consumer-driven sectors of the economy will benefit most from open government data that has direct relevance to the choices individuals make as part of their day-to-day lives.”

I interviewed Lewis last week about Deloitte’s findings — stay tuned for more insight into that research in February.

8 business models for open data

Michele Osella, a researcher and business analyst in the Business Model & Policy Innovation Unit at the Istituto Superiore Mario Boella in Italy, wrote in to share examples of emerging business models based upon the research I cited in my post in December. His email reminded me that in Europe, open data is often discussed in the context of public sector information (PSI). Ongoing case studies of re-use are available at the European Public Sector Information Platform website.

Osella linked to a presentation on business models in PSI reuse and shared a list of eight business models, including case studies for six of them:

  1. Premium Product / Service. HospitalRegisters.com
  2. Freemium Product / Service. None of the 13 enterprises interviewed by us falls into this case, but a slew of instances may be provided: a classic example in this vein is represented by mobile apps related to public transportation in urban areas. [Link added.]
  3. Open Source. OpenCorporates and OpenPolis
  4.  Infrastructural Razor & Blades. Public Data Sets on Amazon Web Service
  5. Demand-Oriented Platform. DataMarket and Infochimps
  6. Supply-Oriented Platform. Socrata and Microsoft Open Government Data Initiative
  7. Free, as Branded Advertising. IBM City Forward, IBM Many Eyes or Google Public Data Explorer
  8. White-Label Development.. This business model has not consolidated yet, but some embryonic attempts seem to be particularly promising.

Agree? Disagree? Have other examples of these models or other business models? Please let me know in the comments or write in to alex@oreilly.com.

In the meantime, here are several other posts that have informed my investigation into open data business models:

This post is part of our ongoing investigation into the open data economy.

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  • Jean-marc Lazard

    Great overview ! Looking forward to have OpenDataSoft (http://www.opendatasosft.com) mentioned within the 6th category with Socrata & OGDI
    Cheers,
    Jean-Marc Lazard, Founder of OpenDataSoft.

    • digiphile

      Thanks! I think you just did mention ODS :)

  • Simon Rogers

    This is really a very interesting piece but I would question whether Deloittes are right to include the ONS as an open data publisher (which is probably where most of the UK government’s hits come from). The ONS is the UK’s main statistical authority yes, but its site is terrible and I’m pretty sure doesn’t comply with many open data guidelines. They may have an API one day (http://www.ons.gov.uk/ons/about-ons/what-we-do/programmes—projects/enhancing-access-to-ons-data/ons-api/index.html) but I’m not sure – I’d love to know what others think

    • digiphile

      I’ll ask the researchers, Simon. Interesting point.

  • http://www.usnewsuniversitydirectory.com/technology/cyber-security.aspx cyber security concerns

    Is there increased security risk by opening up all these government networks? The access is wonderful but but the possibility of a few bad actors exploiting open channels needs to be addressed and closely monitored. This would have to be part of all initiatives to open access.

    • digiphile

      Respectfully, while legitimate “concerns” about network security on government networks will always exist, any anonymous comment that links to for-profit training for “cyber security” will always look more motivated by commercial designs rather than a personal reflection.

  • http://twitter.com/fdellutri Fabio Dellutri

    An example of freemium model is given by Voglioilruolo (www.voglioilruolo.it), an italian project designed for the Italian temporary teachers and school workers, to facilitate them in understanding data produced by Ministry of Education and to help them to make career choices.

    This paper (presented at PMOD2012) describes the business model: http://www.w3.org/2012/06/pmod/pmod2012_submission_27.pdf

  • http://pediacities.com/ Joel Natividad

    What about Government Utility as a Business Model? As Gartner’s Andrea Di Maio points out, Governments may be running out of patience with Open Data (http://blogs.gartner.com/andrea_dimaio/2013/01/15/could-governments-run-out-of-patience-with-open-data/), and maybe, one way to make Open Data advocates inside government look good is to not only make it self-sustaining, but a source of quantifiable savings, if not direct revenue.

    Perhaps, governments can start “Civic Kickstarters” where micro projects carved out of city’s big backlogs, too small to justify a full-blown RFP process, can be listed.

    Not only will govts save money, it will also kickstart the Open Data ecosystem by providing kindling for Civic Hackers beyond the “feel good” hackathon apps that are not sustainable.

    Local citizens and businesses can even contribute to the kitty or commission their own “micro projects” using Open Data. This “Civic Kickstarter” also doubles as a showcase of available Civic apps. And all the resulting code is persisted in a skinned github repository so people don’t keep reinventing the wheel.

    It also promotes transparency and take citizens beyond “Government as a Vending Machine” mentality.

    Perhaps, this can be one of the “white-label” biz models that govts can operate directly…

    • digiphile

      Hi Joel! Thank you for the comment. You make some interesting suggestions and observations here, no doubt informed by your experience in New York City.

      What you suggest as a “business model,” however, isn’t the direct subject of the ongoing inquiry, which is how open data from government relates to economic activity, particularly of businesses and the formation of startups. That’s not to say that internal consumption of government data isn’t a critical use case – indeed, as you know, the work of Mike Flowers’ team in NYC has demonstrated that data analytics can save lives and money: http://strata.oreilly.com/2012/06/predictive-data-analytics-big-data-nyc.html and work in Chicago is similarly focused on deriving value for city government. Those kinds of projects and outcomes definitely can create more political support for open data programs.

      With respect to DiMaio’s recent post, I think you’ll find he has expressed considerable skepticism years of analysis in the sector regarding open government data acting as a platform for the work of civic hackers, transparency advocates or businesses. He has advocated that governments focus on internal use of open data and expressed disdain both for developers and the work of data journalists in the media that hold government accountable.