People may disagree about the meaning of the term "big data," but they agree that businesses can gain advantages by analyzing large data sets in the cloud. The trick is getting the right data.
While a given company may have a significant amount of data on hand, often that data is fragmented and incomplete, which can hamper the company's ability to realize the promise of big data. Fortunately, there is a solution to the problem of insufficient data: Buy more.
Many software-as-a-service (SaaS) providers have started to make supplemental data available to their clients. Salesforce.com, Oracle and other vendors, for example, will help a company cleanse its data and add new data to its existing data sets.
So what's the problem? Well, in many cases you are not really buying the data itself, you're merely buying a license to use the data for a period of time. The company providing the third-party data owns the information--not you.
Often, once your license to the data ends, your right to possess the data also ends. This means that all the reports, dashboards and metrics you built on the third-party data may need to be revised or replaced once the contract ends.
Another problem that often arises in these contracts is that the provider can analyze your data and create aggregate data that is based, in part, on your data. Many contracts include a provision that gives the SaaS provider the right to analyze your data and create derivative aggregate data based on your data and your usage of their systems. These contracts also say that the provider owns that aggregate data and can exploit it in any manner the provider deems appropriate.
The best means of protecting yourself is to carefully read and understand the terms of the contracts with your data vendors. Often these provisions can be negotiated--for example, you can require that your data to be anonymized when it's used by the vendor.
The key is to carefully think through what rights you have (and need) in regards to your data so you can avoid problems down the road.
Adam Ruttenberg is a partner at the law firm Cooley LLP and head of the firm's Technology Transactions Group.
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