Is Sky the limit for data?

Rumours had been swirling around the data industry all year that something big was afoot. Experian was said to have its marketing services division on the market and, in what would have been a curious reversion of history, one of its former directors would be buying it.

Instead, when the story broke (see here), it was both bigger and more interesting than that. For a major client to invest into its core data and data services provider like Sky is doing has not been seen since Tesco took a majority shareholding in DunnHumby. And even there, the data services provider started life as a much smaller proposition than Experian Marketing Services.

What the deal makes clear is just how central data and analytics has become for Sky as a business and in support of its growth targets. Data Strategy readers will be very familiar with the stream of innovations and solutions that have emerged out of the partnership it has with the service provider.

For any other blue-chip organisation this also throws down a challenge. Can they build their success around data in this way? If they choose to do so, where now would they look for that expertise and resource?

That opens up a market opportunity for some of the other players in this space with a similar profile. Building on an existing client relationship to create a new, bigger venture could prove attractive to other analytics and data providers who might struggle to grow beyond mid-size otherwise.

An ongoing question for the new joint venture is the extent to which it will always be a one-client operation. DunnHumby has struggled with the dominance of Tesco as owner-client, making new business from other companies harder to win. The Sky-Experian MS project could face the same difficulty, if it even wants to become multi-client.

Then there is the risk of a change in business focus. Sky’s parent company News Corp already has history in this regard – News International used to own Broadsystem, before selling it to Skipton Building Society. Even now, trading as CIG, it provides data services to NI, but at arm’s length. If and when Sky’s customer base becomes stable and the focus switches to retention, will it still need this dedicated resource?

Data Strategy has always argued that data needs to be at the heart of business in order to inform, direct and develop growth. What is not always clear is whether the heart has to be part of the body to do that or if it can survive outside.

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