The document discusses how combining data across organizations within a sector can create "Sector Advantage". It proposes that a neutral third party like Digital Catapult could host combined data through its Data Catalyser initiative, allowing smaller companies to explore the data and extract value, while maintaining security and competitive advantages for data providers. The Data Catalyser uses technical and legal frameworks to allow innovative data exploration across organizations in a controlled way to enable new opportunities for sector advantage.

1. COPYRIGHT 2015 PUBLISHED @ChandanRajah
Catalysing Sector Advantage
By Chandan Rajah, Technology Expert and Advisor @ Digital Catapult
Since the advent of the Big Data revolution, with the creation of Hadoop, most
companies are successful leveraging their data to create additional value. Some other
firms, like Netflix and Amazon, are successful using the data insight as competitive
advantage to increase consumer willingness to pay. Fewer organisations, like Oracle,
IBM and HP, are able to derive corporate advantage from the data layer by centralising
data analytics capabilities across business units and/or portfolio companies. It’s clear
that this model can be extended across organisations within a broad sector grouping to
create Sector Advantage by combining the data they hold with each other.
While regulators frown at horizontal synergies between potential competitors for fear of
collusion, they are quite open to vertical synergies up and down the value chain. Firms
are beginning to see this potential and attribute resources to exploring opportunities for
sector advantage. Nevertheless, apprehension still exists from the company’s point of
view typically on one of these three dimensions. Firstly, how valuable it is to combine
data up and down the value chain with other organisations? Secondly, where should
this data be hosted to ensure there is no loss of competitive advantage until models of
long-term engagement are formalised? Finally, how could this activity be legally
executed at arms length until the value gain has been demonstrated and contracts are
formalised? The Digital Catapult hopes to address all these concerns with its Data
Catalyser initiative and create widespread opportunities for sector advantage.
Estimating the potential value of combining data, thus predicting the outcome before
the actual event, is not an easy task. Yet, we see companies like Sky extracting
significant sector advantage from data relationships with Clarity Blue and Zeebox and
later acquiring them to internalise it. GlaxoSmithKline actively manages its supply chain
to maximise operational efficiency and increase its sector advantage synergising
throughout the supply chain. UPS, through an open competition, was able to reduce its
fuel footprint quite dramatically by leveraging the innovation held in a transport
technology start-up thereby creating sector advantage. At the Digital Catapult, we
understand that innovative data exploration is the key making these synergies
successful and sector advantage possible. Large organisations typically do not explore
data combination opportunities as much as small organisations do. However, greater
value is usually extracted when two larger organisations combining their data as
compared to their smaller counterparts. Yet, the innovation to extract that value is
usually found more abundantly within the small and medium sized enterprises (SME).
What if, one or more large organisations could grant access to their combined data in a
secure way for SMEs to explore under the premise that any value found would lead to a
combined value sharing opportunity amongst all parties? The Digital Catapult’s Data
Catalyser offers a technical, legal and procedural framework to combine data in
innovative ways allowing SMEs to extract hidden value from corporate data to create
sector advantage.
Hosting the combined data without losing competitive advantage is tough. The issue is
the degree of trust each organisations has on the other. On the one extreme,
organisations trust each other to hold the others data without exploiting it, while on the
other extreme, organisations demand the creation of a separate legal entity to hold this

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data and exploit it with no liability flowing to the parent organisations. Either ends of the
spectrum are usually not feasible.
What if, this activity could be structured and executed by a neutral party that has no
competitive advantage to gain by having access to the data and insight of either
organisation? The Digital Catapult is a not-for-profit national organisation neutral to all
players in the industry. The Data Catalyser is a secure hosted big data analytics solution
that prevents organisations providing data (aka Data Providers) from accessing each
other’s data. Access to the combined data is available only to preselected SMEs (aka
Insight Producers) through a tightly controlled and monitored web interface. The tools
available to Insight Producers to analyse this data a vetted by security professionals and
the platform is certified to meet the level of security needed for this activity to be
conducted.
Technically speaking, the Data Catalyser is a Hadoop cluster shrouded by multiple
layers of security. Data from Data Providers is held within the most secure boundaries
with fine-grained access restrictions applied to it. Access the data is provided through a
controlled and monitored web interface secured by SSL and authenticated by digital
certificates. Actions are tracked through the ecosystem right down to the network level
using Kerberos linked to certificate identifiers. Insight Producers have access to R,
Python and SQL for data analytics and visualisation of insight.
The Digital Catapult offers a complete solution to ensure that engagement between
organisations providing data stays at arms length. The solutions compromises of
template contracts and best practices along with project execution capabilities. On a
scale, we offer a strong room approach to analytics wherein no data can be accessed
or leaves the confines of a physical space, or, a cloud hosted solution that has detailed
access controls and auditing to monitor access to the data and insight. We offer an
extended data licensing service to allow providers leave their data on the platform for
longer creating an opportunity for future gains through value creation currently unseen.