Tear down this wall - Microsoft embraces open data | Business | The Economist

Oct 4, 2021 6:11 PM
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TWO DECADES ago Microsoft was a byword for a technological walled garden. One of its bosses called free open-source programs a “cancer”. That was then. On April 21st the world’s most valuable tech firm joined a fledgling movement to liberate the world’s data. Among other things, the company plans to launch 20 data-sharing groups by 2022 and give away some of its digital information, including data it has aggregated on covid-19.

Microsoft is not alone in its newfound fondness for sharing in the age of the coronavirus. “The world has faced pandemics before, but this time we have a new superpower: the ability to gather and share data for good,” Mark Zuckerberg, the boss of Facebook, a social-media conglomerate, wrote in the Washington Post on April 20th. Despite the EU’s strict privacy rules, some Eurocrats now argue that data-sharing could speed up efforts to fight the coronavirus.

But the argument for sharing data is much older than the virus. The OECD, a club mostly of rich countries, reckons that if data were more widely exchanged, many countries could enjoy gains worth between 1% and 2.5% of GDP. The estimate is based on heroic assumptions (such as putting a number on business opportunities created for startups). But economists agree that readier access to data is broadly beneficial, because data are “non-rivalrous”: unlike oil, say, they can be used and re-used without being depleted, for instance to power various artificial-intelligence algorithms at once.

Many governments have recognised the potential. Cities from Berlin to San Francisco have “open data” initiatives. Companies have been cagier, says Stefaan Verhulst, who heads the Governance Lab at New York University, which studies such things. Firms worry about losing intellectual property, imperilling users’ privacy and hitting technical obstacles. Standard data formats (eg, JPEG images) can be shared easily, but much that a Facebook collects with its software would be meaningless to a Microsoft, even after reformatting. Less than half of the 113 “data collaboratives” identified by the lab involve corporations. Those that do, including initiatives by BBVA, a Spanish bank, and GlaxoSmithKline, a British drugmaker, have been small or limited in scope.

Microsoft’s campaign is the most consequential by far. Besides encouraging more non-commercial sharing, the firm is developing software, licences and (with the Governance Lab and others) governance frameworks that permit firms to trade data or provide access to them without losing control. Optimists believe that the giant’s move could be to data what IBM’s embrace in the late 1990s of the Linux operating system was to open-source software. Linux went on to become a serious challenger to Microsoft’s own Windows and today underpins Google’s Android mobile software and much of cloud-computing.

Brad Smith, Microsoft’s president, notes that fewer than 100 firms collect more than half of all data generated online. More sharing would, in his view, counteract the concentration of economic—and political—power. Bridging the “data divide”, as he calls it, and growing a big open-data movement won’t be easy. Data are more complex than code. Most programmers speak the same language and open-source collectives mainly solve technical problems; people in charge of data often come from different industries without a common vocabulary and talk business.

Indeed, like IBM before it, Microsoft has reasons other than altruism to champion open data. It makes most of its money not by extracting value from hoarded data through targeted advertising, like Alphabet or Facebook, but by selling services and software to help others process digital information. The more data that are shared, the better for Microsoft. Mr Smith argues that this makes his firm the perfect campaigner for open data. “If you want to know who to trust,” he says, “you should look at the company’s business model.”

That may be so. But this also points to a bigger hurdle. Even if technical and legal barriers to sharing could be removed, many data-rich firms will be reluctant to forfeit their lucrative monopoly over user information. Mr Zuckerberg’s declarations notwithstanding, don’t expect Facebook to follow Microsoft’s lead any time soon.