There are many ways to evaluate value for potential investors for cybersecurity and 5G markets. A major indication of fundamental growth is to track a firm’s commitment to data, beyond just the value of the assets itself. This frees the business case from market trend growth rates and shows a pathway to real value and competitiveness.
Moving Beyond Just the Data
With billions of dollars spent in the cloud and the data storage market, we often question the value of the inundation of data to our business or enterprise. Many companies respond by solving relevant data management, but what can be done to become more competitive? Does just owning data assets help you compete better?
A recent HBR article, “When Data Creates Competitive Advantage,” says no – you need to add a network of data users, and data-enabled learning. The implication is that you cannot just gather or buy customer data, you need more. What's more, when you also think about how defensible your data is relative to your competition, that’s where differentiation begins. Two main areas – defensibility and learning – help frame this conversation.
For a few years, competitiveness in the digital world has revolved around more than just data assets; the deeper value of networks beyond scale and brand provide something called “defensibility.” When it comes to data defensibility, businesses can gain advantage by controlling the content and capabilities of strategic data assets with a far greater network effect. They are fighting over their assets, but with a new mindset.
In his Modern Data Strategy practice, Dan Sexton, RedChip Ventures Founder, helps companies with their data approach to predict overall success. For instance, when you combine data defensibility, strategic modeling, and data design & testing for growth, it’s a sure-fire way to assess the value of a company’s core innovation. You cannot just hope – you must validate, otherwise failure risk is high.
Data learning and AI struggle to move ahead in both cybersecurity and 5G because we are still trying to figure out how to create a better query for a sustained supervised learning experience. In simpler terms, just what are we trying to know about 5G and cybersecurity beyond simple data trends and efficiencies? Does user behavior analysis add that much?
For investment portfolios, Artificial Intelligence generally adds a 2x factor on some belief that if data is “smarter” it must be better and the company worth more. In these times, we do not have the luxury to add unproven AI value on cybersecurity or 5G companies, unless we can link back to how the AI creates a deeper network effect. The HBR article on data competitiveness teases that concept, citing that there is a drop off at some certain point of data value. It is particularly appropriate here – AI only goes so far.
Investment Decision-making for Cybersecurity and 5G. On the cybersecurity front, total market revenue growth comes from countless compelling areas, with metrics and threat management working to solve threat strategies against data frameworks such as NIST or ATT&CK.
With 5G, the next-gen wave of mobile data is all about moving massive data to a new and faster computing edge – closer to devices such as cellphones or IoT sensors. Data drives both.
A previous RedChip article outlined the new business game for 5G, where applications, devices, and the edge work together to create value. What’s the common denominator that binds it all together for 5G? Data. But how? Applications thrive off a combination of user actions, user data, and the advertising business case, all mixed up in a complex network feeding off each other.
With faster and broader access, on native-cloud 5G networks for instance, network orchestration solving for data latency and machine-to-machine IoT connectivity will rule the day – not ownership of the data. Mobile market leaders are thinking 5G networks, not data storage, to be more competitive. They think, will it be easier for the customer, will it be automated for me?
Data Competitiveness for 5G. The best way to think about “5G data” might be on a spectrum basis and where the “data” gets pulled all together at the Mobile Edge Compute (MEC) node. Data has no value at rest, so it comes down to three main areas of data movement and value in 5G – at the MEC, at the tower access point, and in and around the devices themselves.
There is a span of storage, control, and security around each. The simple point for 5G data in these three areas is how best to extract value? Knowing this helps companies establish competitiveness beyond just the assets. MEC data value is highest when data drives app’s; mobile network data value is highest when the value of the spectrum is maxed out; and user/IoT data value is highest when it is faster and super-connected.
Investment for 5G. A solid approach is to use the investment accelerators mentioned before that add value to data assets, namely network value and data strategic modelling. That is why the entire dialogue around 5G is not who controls the data, but around who controls the orchestration of the data at the Mobile Edge Compute (MEC) gateway. 5G companies that are both traffic cops, as well as efficient data feeds to the applications, will be the winners.
What's more, companies that have learned from 4G, open architecture, and edge cloud services have a distinct competitive factor because they offer the greatest value to their mobile operator customers. OpenRAN and open network architectures paradoxically add greater data defensibility because you drive the value right to the MEC and the app's, not any infrastructure edge. In addition, there is no doubt, as you break down component value in terms of how defensible the data and networks can be, you will be able to assess the value of any investment clearly.
It's surprising that the most pervasive threats do not come from some massive worldwide scheme, but arise mostly from email phishing, password laziness, and easy access to low-security networks. Organized Crime (not nation-states) attacks sets of data, but that’s changing quickly. Next-gen threat architectures will be flexible to protect network data from any device or remote on an agentless basis, with far greater importance to the enterprise.
The targets? They are beyond data assets or millions of credit card holder information; they represent business competitiveness itself. Combining data assets with the context of how a business operates provides an excellent understanding of both how to disrupt and compete against businesses. This is where older threat prevention strategies will end and nation-state protection begins – based on data flow, as opposed to the data itself.
Data Competitiveness for Cybersecurity. Cybersecurity data protection will move beyond threat libraries and end point protection which were predicated on older data asset frameworks. Next-gen protection strategies will evolve around data value and network visibility.
Investment for Cybersecurity. The borders of the network shown above are broadening, where the edge is perceived as everywhere. As opposed to 5G, where the aggregation and orchestration of data rests at the MEC, cybersecurity is based upon protecting data asset value anywhere where the bad guys can get in. The classic Target retailer breach came in through the cooling system in one store; and every home network is now architected for a breach at any one wireless point.
If we now use our defensibility metric, where will the real value come from? Defensibility of data in this sense must come from a strategic decision on where your network centricity resides or shows the greatest value.
In short, where is the weak point in the data defense? Is it adversary, asset, system based? Once known, you solve for that. Companies that offer wide one-stop-shop solutions will not be the winners. Successful companies and ones to invest in will be ones that can show threat performance in one of the three areas, with a focus on a vertical.
Where is this tested today? Centric testing has been done on high-value government and military networks for adversary threat; on IoT-driven industrial security for asset threat; and with fintech security for banking system threats. If a company can point to value relative to a centric approach, it can show data defensibility and is likely a forward-looking investment of promise.
Conclusion – Hype is Over
The hype is over for both Cybersecurity and 5G investments. Today, there's a false differentiation in a highly fragmented market, created by marketing-engineered segmentations and artificial growth. So, where is the best place to turn to for investment success in cybersecurity and 5G? Consider starting with the data value, as judged by its impact on networks and the ability to create real defensibility around innovation.
RedChip Ventures was created to help companies and investors see deeper value in data, architectures, and devops implementation. RedChip is organized into select practices that encompass 5G, Cybersecurity, Media, and DevOps. Clients use RedChip’s expertise, data models, and know-how to maximize investment dollars for greater success. www.redchipventures.com