I’m all about disruption. It never ceases to amaze me the impact that small agile players can have when up against the well funded big boys. Witness RedMonk  going up against Gartner et al. As a SaaS CEO I know says:

It’s not the big that eat the small, it’s the fast who eat the slow

Anyway, I got thinking about all of this the other day when salesforce.com announced that it was purchasing Jigsaw, a company that uses a Wikipedia-style crowd-sourcing model to deliver business contact data.  Yes the same data that traditional data services companies already produce – people like Dun and bradstreet, LexisNexis and smaller localized directory services.

From salesforce’s perspective, they see the company’s crowdsourcing methods as a leap in improvement over traditional enterprise data management models that require expensive integration and dedicated maintenance to keep the records updated. Salesforce is giving this a positive spin for the existing data companies, saying that it:

creates new opportunities for the company to expand partnerships with data service providers like D&B, Hoover’s and LexisNexis, opening up entirely new revenue streams for the company.

And initially that’s a fair summation. The traditional players can join in with the Jigsaw initiative and provide data for on sell on the platform. But just wait a minute, aren’t they already doing so? Hoover’s has an application on the appexchance and, for that matter, so does D&B. It’s a little simplistic to think that these data services will be excited to lose their proprietary edge and go play on a platform that, at least in part, utilizes the wisdom of the crowds, rather than a proprietary (and expensive) data list.

In fact Jigsaw is a great example of just how successful a new model to an old problem can be – its success has been fueled by its community of more than 1.2 million members. Apparently over the last six years, community members have built and maintained a contact database of more than 21 million professionals at nearly 4 million companies.

Clearly there will be some strategizing within the traditional data services companies – I’d be surprised if they saw this coming, my experience with these sorts of organizations is that they’re sufficiently slow and bureaucratic that changes like this can sneak up on them. Realistically one of the traditional players should have bought Jigsaw and added it into its own offering as a crowdsourcing extension to the core product – now it’[s too late.

Prognosis? As with traditional analysis firms, there is a long runway of work for data services. Traditional businesses feel more comfortable buying what they perceive to be a gilt edged product or service. This won’t change in the short term.

But a new dawn is coming – fiscal pressures, a new generation of management and, quite frankly, the qualitative differential that crowdsourced data can bring means that the writing is on the wall for these more traditional players – innovate or die!

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Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

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