Posted on: Friday 15th of August 2014
Prompted by our recent research into the potential size of the PIMS market, we’ve been having many discussions with clients where the differences between the three main categories of PIMS – personal data management services, decision support services, and life management services – are highlighted.
Many early decision support services, such as price comparison sites for electrical goods, don’t use any personal data. Many specialist life management services collect and use a small amount of personal data and don’t give individuals any control over this data. There is a big different between personal data stores as pieces of data infrastructure and the multiple specialist apps and services that can run on top of them. These players may have very different business models, and will probably be completely separate businesses.
So is there really ‘a market’ for PIMS? Yes, there is. But it’s not one uniform thing. It’s an ecosystem of different players, quite a complex one at that. And as with any ecosystem, it’s the connections and dependencies between the different parts that make it work.
A virtuous spiral
To see the importance of these connections, take a parallel from the the post-second world war economic boom. It was driven by a ‘cluster’ of mutually supporting and interdependent industries: electrification (drawing upon the now critical resource of oil), chemicals, and metallurgy.
To create high quality steel, you need large quantities of oxygen. But previously, you couldn’t get large quantities of oxygen because ‘making’ oxygen at scale is a very energy intensive process. It had to wait for electrification. Once the oxygen started pumping however, you could start making large quantities of better steels. And you could use these steels to make better chemicals plants (amongst other things), where you could develop new chemicals to drive advances in metallurgy. These advances in metallurgy then enabled a ten-fold increase in the productivity of turbines (stronger, lighter, able to withstand higher temperatures and pressures), which in turn brought down the costs of electricity and accelerated the process of electrification. And so on – with all three industries (electricity, chemicals and metallurgy uniting to drive forward other industries such as the motor industry, artificial fibres, pharmaceutical production and so on).
They all fed each other, and became dependent on each other.
The same is true of PIMS. At one level, decision support, life management and personal data management are completely different services. But they support each other and come together to create a powerful eco-system. If you really want to help people make better decisions you need to know a lot about them: their circumstances, constraints, preferences, priorities and so on. You need a lot of personal data. And once you are using this sort of personal data you need to store it, have trust about how it is being collected and used, and so on.
Likewise with life management services. If you want to organise, orchestrate and coordinate a complex task or process such as ‘manage my money’ or ‘move home’ you to need to access and use sometimes large amounts of personal data – and to make a number of decisions along the way. So you need the infrastructure and processes of personal data management and decision support.
This is important for organisations, big and small, looking to enter the PIMS market. The PIMS market is potentially vast, embracing every individual and household, at every stage of their life from pre-birth to death, across every single one of their main activities (home, work, money, health etc).
Nested within this vast stage are a number of increasingly familiar concepts such as smart homes, the quantified self, virtual personal assistants and so on.
No one, single player will ever get anywhere near to drinking this ocean by themselves. One of the most important questions to ask, then, is “given our particular assets, strengths and weaknesses where, exactly, is the best place for us to play in the PIMS market?”
To a large extent, tomorrow’s business fortunes are being forged right now, as organisations wrestle with this hugely important strategic question.