Big data is a big challenge for London – Spotify, Channel4, TechUK all have their say

Profile picture for user ddpreez By Derek du Preez June 17, 2014
Summary:
London Technology Week kicked off this week and although there has been some healthy scepticism about the numbers being banded about, big data could be sweet spot for the Capital going forward.

Although London's Technology Week gained a lot of attention in the mainstream press with some impressive figures being banded about, e.g. 46,000 new tech

© jovannig - Fotolia.com
jobs by 2024, growing faster than Silicon Valley etc etc, Stuart rightly gave us a bit of a reality check on Monday about how seriously we should be taking this. Nonetheless, there is a fair bit of activity happening across the Capital, with companies jumping at the chance to host an event that fits in nicely with the free London Technology Week PR push. I attended one of these events this morning, hosted by WANdisco, which involved an impressive line up of speakers discussing not only the opportunity of big data, but also how well positioned London (and more broadly the UK) is to take advantage of it.

David Richards, CEO of WANDisco, kicked off the discussion by saying:

“Big data is probably one of the most overhyped phrases out there, I don't like it. Hopefully in ten years it will just be called data. But big data is going to be what client-server was to the mainframe. It is going to be hugely disruptive and there are going to be huge companies created off the back of this. 

“However, the UK's participation in this disruptive marketplace is my main concern. For instance, getting the right people and skills. In Silicon Valley there are people with skills you can drop right into software development. That's not the case in London, but I really hope the private sector will step up and help with this.”

Now there was a lengthy list of speakers at the event, too many to really discuss in great detail, so I thought it would be best to just give a summary of their main arguments and what the points of interest seem to be in the industry. There were a number of similar themes that kept popping up and the general consensus seems to be that there is a huge opportunity for London and the UK to become a world leader in creating companies that are focused on using data as a differentiator – as a disruptor. However, there are a lot of challenges that need to be addressed, because otherwise us Brits may find we once again lose out to the likes of those based in Silicon Valley and New York.

The opportunity – the use case

There were three major companies at the event discussing their interest in big data and how they are using it to not only differentiate themselves from the rest of their competitors, but in some cases also completely change the business model for their industries. To give this discussion some context I thought it best to take a quick look at how some companies are recognising the opportunity in big data and why there is a need for the UK to develop its capabilities in this area going forward.

John Lewis – Julian Barnett, head of IT architecture at one the world's largest retailers, was talking about how data is being used by those working in retail to compress the time between understanding customer needs and supplying them with a product or service to satisfy that need. John Lewis is not only using data driven technologies to better its online and digital experience, but it is also analysing shopping techniques in-store to try and fully understand a customer's demands. But this isn't easily done and the retail giant recognises that it will have to in-source capability from innovative companies out there in the market, which is why it has set up #JLAB, an incubator that allows SMEs to get funding, in exchange for equity in their business.

When have seen industry specific companies operating in this way before? I can't recall when working directly with SMEs to get hold of their IP was necessary for big business (apart from the tech companies, obviously) – this is all because of data. Barnett believes this will result in the true personalisation of products for customers, which will only be further enhanced when the Internet of Things and 3D printing takes off. He said:

“I predict that in two years time product specialisation relating to customer needs, customisation of products, will become a reality. The Internet of Things can extend the relationship between customers, products and retailers – to connect not only with the customer, but the thing that customers have. And 3D printing will allow retailers to create products of a customised nature in the moment.”

Spotify – A completely different use case to John Lewis, Spotify is a company that is born out of using its data to personalise services. Not only this, but Spotify

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has revolutionised how the music industry works (not only because of streaming) but through the sharing of playlists, which has meant that music artists can hit the number 1 spot without any support from traditional media outlets. However, Will Page, director of economics at Spotify, explained that big data must be used to relate to the end user. He provided one example, where Spotify recently launched a PR campaign in partnership with the Guardian, called Six Songs of Me. The campaign asks users to provide their choice of song for six situations, e.g. what is your perfect love song? What song would you like played at your funeral?, and then it compiles a playlist personalised for you based on your choices.

However, not only this, it also shows you how your results compare to everyone else. Page said that he was amazed to see that thousands of other people, of the same age, brought up in the same area, all had similar preferences to him. But most importantly he said this created a memorable experience as a consumer. He said:

“This is just an example of how big data can be used in a simple PR context. But it created a really memorable moment for me.”

Channel4 – As one of the largest broadcasters in the UK, and given the growth in consuming media on mobile devices, Channel4 has been able to collect a huge amount of data on its customers and how they like to use their services. According to the channel's head of data planning and analytics, Sanjeevan Bala, this has led to the creation of a central data team that reports directly into the CEO, looks across the entire organisation and focuses on business benefits and outcomes. This analytics team has allowed Channel4 to personalise its on-demand services so that it can deeply understand its viewers' interest in content and offer them what they want when they log-in online, which has led to huge increases in click-through rates and viewing numbers.

The roadblocks – Skills, immigration and privacy

Don't get me wrong, there was a serious amount of optimism this morning from everyone in attendance. Not only about big data, but more generally about the opportunity for technology firms in London and the capital's role in the global marketplace. However, there were a couple of things that came up throughout the two hour event that people kept highlighting as roadblocks to really making the UK excel in this area. And to be honest, there wasn't much offered up in terms of how to deal with them. Essentially, skills and immigration (the two are closely linked, obviously) were mentioned time and time again, whilst the issue of privacy in the wake of Snowden is also proving to be a real blocker, as people are nervous about letting companies and governments use  their data. Here are the highlights from some of the attendees on these topics:

Clive Humby, chief data scientist at Starcount and creator of the Tesco Clubcard:

“The UK is very good at the analytics, management and creative end. But we aren't very good at the computer science part. 

“Also, if you look at things like Care.data (see Stuart's story here), we have the power to do huge amounts of good with things like healthcare data, but we are risking it all because it has been so badly handled. We need to educate society by selling the benefits of using data, but we also need to figure out, what are the limits?”

Antony Walker, deputy CEO at techUK, a body that represents the interests of the UK tech industry, said:

“What people say and what they do is entirely inconsistent, they have different personas when it comes to privacy. For example, how they view their medical data versus their consumer data. They also don't actually want to do anything to protect their own privacy, there are low levels of activity to control it. As a result, legislators hear this and think it's not going to be self-regulated and they step in. 

“I see three scenarios. The first is that we muddle through this, make use of the existing regulatory framework to try and cope with the change. I

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think we are coming to the end of this stage. The second scenario is potentially a wave of regulation, which if you're an SME, is going to feel like a tsunami. Thirdly, which is an approach I think is more promising, is a joined up ethical response that is driven and led by industry.”

Stuart Coleman, the commercial director of the Open Data Institute, said:

“How do we protect Britain's opportunity? We need to focus on skills. Look at the US, there is a horsepower of capability to answer difficult questions about data. We need to create that. Big data is a huge opportunity, but we need to enrich the skills across the UK.”

Russ Shaw, founder of Tech London Advocates, said:

“The biggest challenge is a shortage in talent. Companies going from the start-up phase to the scale-up phase can't fill the jobs fast enough. Can't get enough talent through. 

“Immigration and immigration reform is really important. Boot camps are trying to skill people up in a few months, but we need that tenfold. It will take a generation, but it will happen”

Kit Malthouse, Deputy Mayor of London for Business and Enterprise, said:

“We need to be much less random in our skills agenda. At the moment young people turn up somewhere to be educated or trained, they do something they feel interested in, and they take a punt that there is going to be a job at the end. That is far too random for them and also for the tech, digital and big data industries. 

“We are sucking in loads of talent from around the world, which is why you hear so much complaining about our visa system. It's always good to have foreign DNA injected into your gene pool – it brings vigour and excitement. But at the same time many of the thousands of opportunities that arise in big data and tech generally, need to be filled by home grown talent. We are doing that largely through our apprenticeships program.”

Verdict

  • It's clear that big data is a big opportunity, not only for Londoners, but for any city or country interested in creating the companies of the future. However, the UK's challenges aren't small ones. The privacy issue I think will die down as governments and companies mature in their education processes and find a happy medium for both business and consumers alike. There are benefits for both and there must be a middle ground that creates a win-win scenario.
  • However, the skills problem is more serious and far more difficult to solve in the short-term. Sure, we are reforming our education system to cater for technical skills, but that doesn't give us the generation of software developers that we need right now. The only way I can see this happening is through a combination of apprenticeships, re-training existing IT pros and an effective immigration strategy. The latter being particularly important. However, with the political climate in the UK leaning towards tightening the immigration noose, this may be an even bigger challenge than one would hope.