Data Interoperability & Infinitely Composable Systems

AJ SolimineAJ Solimine
May 8, 2020

The number of Software-as-a-Service businesses has exploded over the past decade, with the average 200+ person company adopting over 100 separate SaaS services. As SaaS services become more and more specialized, virtually every aspect of business has become a digital workflow. This has led to an immense flood of digital information, leading many tech pundits to refer to data as “the new oil”.

This analogy is flawed however, in that oil is a fungible commodity that has equal value for all stakeholders across many possible systems. SaaS data does not share these qualities.

The nature of the SaaS business model unfortunately incentivizes these applications to utilize proprietary data models to ensure that the data they collect only has use within the confines of their universe of services. This significantly limits the value of the data being collected. The short-sighted argument for proprietary data lock-in is that it ensures client lock-in and reduces customer churn, thus increasing customer Lifetime Value (LTV).

Despite this trend, we believe there is a shift occurring where customers are actively seeking out platforms and protocols that enable their data and queries to flow seamlessly across cloud applications. We have seen this in the analytics space with companies like Segment, in the Data Privacy & Compliance space with companies like Transcend, and in the general productivity space with Zapier. Web3 is pushing this paradigm further with new primitives that facilitate and ensure data interoperability and composability (e.g. middleware like TheGraph, ERC-721 / NFTs)

Empowering data interoperability can take many forms. Most often it happens at the API level, but we are also excited about new protocols, data formats & query languages (Graph Protocol, JSON-LD, IPLD, GraphQL, etc…), as well as developer workflows & tools that facilitate data movement and enhance data intelligence across systems. It will be critical that these solutions understand their core audience and provide a frictionless way for users to onboard and get additional value out of their data on day 1.

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