Adding value byte by byte: How businesses can realise the potential of their data

Data and AI are opening new paths for growth

The explosive growth of data presents a huge opportunity for businesses that are poised to capitalise on its potential. Annual data generation is projected to rise at a rate of 24% from 2023 to 2028, potentially reaching a total of 2.5 Yottabytes by 2030. This is equivalent to streaming a 4K movie for 30 billion years, longer than the universe has existed! The surge in data generation, along with declining computer memory and storage costs - which have decreased by 7% annually over the last decade - has made data handling more efficient and cost-effective, creating an opportunity for organisations to harness it as a strategic, value creating asset.

Annual data generation in ZetaBytes

^{Source: Worldwide IDC Global DataSphere, September 2024}

The arrival of Generative AI and large language models (LLMs) has also opened new avenues for data commercialisation.

Data businesses are outperforming the market

Investor interest is also very strong, with B2B data companies outperforming the FTSE 100. Their share prices have increased by more than sixfold in the past decade, compared to a threefold increase for the index. The same businesses have also consistently out-performed the Nasdaq-100 technology sector index.

Listed company share price movement

^{Source: Capital IQ
Notes: Indexed from 2014}

Listed company EV/EBITDA multiples vs. S&P 500

^{Source: Capital IQ
Notes: EV/EBITDA multiples presented on a last-twelve-months (LTM) basis}

The challenges and how to overcome them

Despite the opportunities, extracting, packaging and commercialising data revenue streams alongside core business activities is not without its challenges.

On the supply side, organisations face technical hurdles in transforming internal data into market-ready products, while navigating complex issues of data privacy, sovereignty and ownership. On the demand side, data buyers encounter a fragmented market with inconsistent pricing and a lack of industry standards. This erodes trust and slows down adoption cycles. Many businesses are still developing the expertise and capabilities required to invest in and create new data products.

To tackle these challenges, businesses must understand the data value chain and adopt strategies to unlock their data's potential. Key questions to consider include:

• What data or insights can I generate?
• What potential use cases can my data support?
• Who are my potential clients?
• How well do I cover the market, and is this sufficient?
• What are my capabilities?
• Who should I partner with to deliver data and insights?
• How can I sell or package my data?

Depending on the answers, businesses can take multiple strategic paths. Some may choose to build dedicated, data-focused businesses within their operations, turning proprietary data into marketable products and services. Others might form strategic partnerships to co-create or distribute data products more effectively.

Regardless of the approach taken, it is critical that the journey to unlocking value from data is considered with a full and proper assessment of the legal, reputational and financial risks.

How we help businesses realise the potential of their data

At PwC, we have helped support businesses across all sectors to define their data strategy and build a product that is fit for the dynamic data market. For example:

• We help productise location data in the telecoms sector for applications in marketing, financial services, operations, and advertising.
• We guide businesses in the financial services sector to use their data for enhanced decision-making and resource allocation across different regions.
• We advise automotive companies on effective marketing strategies for data and the development of ecosystem partnerships.
• We assist clients in AI development by building personalised AI agents that utilise customer data.

If you’d like to learn more about unlocking the value of your data, maximising your data monetisation strategy, or understanding the value drivers in data-driven business acquisitions, please get in touch.

^{This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PwC Strategy& (UK) Ltd, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.}