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What to do with all that information

By David Kirkpatrick
FORTUNE.COM


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(FORTUNE.COM) -- Why is data growing so fast and what should we do about it? Can companies take advantage of it to gain strategic advantage? Who is doing it right? What about our identity and security as consumers? Who, if anyone, is responsible for gathering and maintaining the mountains of information about each of us that grows daily in corporate and government databases?

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These were the topics to which Esther Dyson devoted her cutting-edge Platforms for Communications conference this year. She called it "Who? What? Where? Data Comes Alive."

CIOs and CTOs from some giant companies are aggressively deploying leading-edge technology to take advantage of all this new data. Those at Dyson's conference in Scottsdale included American Express, Eastman Chemical, Fedex, General Motors, Merrill Lynch, and Wal-Mart.

That last company, the largest in the world, now also maintains the world's largest database, 280 Terabytes, as it seeks to better understand how to efficiently serve its customers. For instance, it increasingly uses Radio Frequency ID tags -- tiny 25-cent data-holders affixed to a box of razors and other goods. Wal-Mart uses RFID to track its inventory through much of the supply chain. Soon the tags will only cost pennies and start going on the razors themselves. Talk about increasing the amount of data to store and analyze! (I listened in the cool new $10 shirt I bought Sunday at a local Wal-Mart store.)

The message here is that if you seek to understand data better, you will always be rewarded. After all, the typical attendee here follows Dyson's lead in believing that software continues to be one of the world's most important forces for good.

Jeff Jonas, founder of Systems Research & Development, a Las Vegas-based company that does sophisticated analysis and "regularization" of massive data sets, said that only after deploying his company's software did one casino discover that among those it routinely flew in as favored high-rollers were 24 big-time cheaters.

And in the not too distant future, data may be able to interact with other data without human intervention. That was the message of Web inventor Tim Berners-Lee. He talked about the glorious future of something called the "semantic web," a concept that most people aside from programmers will probably never understand. His talk here didn't help. One hopeful journalist from the Economist asked Berners-Lee to give an example of how companies could make or save money using it, but he didn't have an answer. He doesn't have to. He's an academic. Businesspeople here assured me this is a big deal we'll hear more about.

There was only one hardware company in evidence, in stark contrast to this event's past, when Dyson called it PC Forum and meant it. Intel President Paul Otellini kicked off the conference. The audience didn't want to hear about PCs, but rather how Intel was going to intercede with media companies, telecom companies, and the government to help create a more welcoming environment for software innovation.

In their questions from the audience, the software people pleaded with Otellini as supplicants might to a saint. They seemed to feel an overwhelming sense of dependency and powerlessness in the face of industries still striving to maintain old, top-down, power-based business models. They now see Intel as one of society's primary power brokers, and their best intercessor for progress.

Otellini took a moment to brag about PCs, despite the crowd's apparent apathy. He said the global PC industry would return to double-digit growth again this year after a flat year in 2002 and a decline in 2001. But he conceded that, "the industry is still trying to figure out when the corporate refresh will happen." That's the time when companies finally start buying in quantity to replace all those outdated PCs they bought preparing for Y2K. Otellini says there are 500 million PCs out there with processors no faster then 700 Megahertz, which means they can't run the latest operating systems or security software from Microsoft.

It's a myth that new software companies are no longer being formed and funded, said longtime venture capitalist Ann Winblad outside the meeting hall. It's just that in the present Wall Street environment there's little upside to visibility, so she advises companies she's working with to avoid publicity. Her comment helps explain why so many startups here seemed tongue-tied when describing their products -- they no longer spend money on PR people whose job is to translate the geekspeak into English.

I left reassured that innovation is not in jeopardy. But as the data problems get more complicated, so do the solutions. More and more, businesspeople will have to become conversant in software issues if they're going to run an effective enterprise. If we don't keep inventing, and companies don't keep buying, we will all drown in the oncoming tsunami of information.


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