In the twentieth century, scale effects in business were largely driven by breadth and distribution. A company with manufacturing operations around the world had an inherent cost and distribution advantage, leading to more-competitive products. A retailer with a global base of stores had a distribution advantage that could not be matched by a smaller company. These scale effects drove competitive advantage for decades.
- Network—Lock-in that is driven by a loyal network (Facebook, Twitter, Etsy, and so forth)
- Economies of scale—Lower unit cost, driven by volume (Apple, TSMC, and so forth)
- Data—Superior machine learning and insight, driven from a dynamic corpus of data
In Big Data Revolution (Wiley, 2015), I profiled a few companies that are capitalizing on data as a scale effect. But, here in 2019, big data is still largely an unexploited asset in institutions around the world. Spark, the analytics operating system, is a catalyst to change that.