Four years ago, Marc Andreesen famously penned a column in the Wall Street Journal entitled “Why Software is Eating The World“.  Today’s Wall Street Journal  has an article on the increasing tendency for software to be eating our food.  It’s a topic I’ve written about before here.

The article shows us that even in agriculture, the data being generated may become an independent revenue stream separate from the primary product being produced.  In this case, corn or soybeans!   The article also highlights two trends being repeated in several industries where platforms are becoming dominant: fighting the intermediary and trading on platform information.

Choose Your Platform Carefully

Producers of data seek more direct control of their data through consortia or, at least supplier friendly platforms, rather than buyer-friendly intermediaries which have other uses for the data.  I’ve blogged on this topic–here.

The WSJ article highlights a farmer-owned cooperative, Grower Information Services Cooperative (GISC) as well as several start-ups (e.g., Farmobile, and Granular) promising to help farmers better profit from their data, versus other major players who seek their data:  Monsanto, DuPont, Deere & Co. and Cargill. (Interestingly, Granular is part-owned by Mr. Andreesen’s firm.)  Normally cooperatives or consortia are hard to form and maintain, but there is a strong cooperative history in agriculture (especially dairy), so perhaps GISC can beat BigAg.

This same battle between data owners and platforms is being waged in banking, stock exchanges, hotels, payment systems, and airlines to name just a few industries.  When industry platforms become concentrated (e.g., global distribution systems versus airlines; online travel agencies versus hotels; credit card networks versus retailers; and stock exchanges versus broker-dealers) the data owners will want to find more supplier friendly solutions. Today’s New York Times has an article on hotels fighting back against Expedia and Priceline, as just one example.

Trading on the Information

The article also points out that real-time agricultural information would, of course, be very interesting to traders in the commodities pits.  This use of aggregated platform data for trading was also highlighted in my recent post about Yodlee.  This trend will be played out again and again with industry platforms. Platforms that generate usable and current data will be able to readily monetize it. Investment firms have always hired market researchers and others (e.g., drones and satellites) to find better, more current information on retail activities or economic trends.  Industry-wide platforms with a sufficient sample of data can do the same.

Summary

Participants in industry platforms need to game out their participation strategy to ensure their platforms have plenty of competition and the spoils go to the end participants, not the intermediary.  Of course, the platforms are trying to do exactly the opposite!