Facebook: The Database Of Wealth And Power

Microstrategy CEO Michael Saylor nearly had more to say about Facebook and Apple than he did about his own company when the business intelligence leader presented his vision for the future at Microstrategy World 2012 in Miami.

He argued the four big trends reshaping the world are mobile, social, cloud, and big data technologies--with Facebook in social and Apple in mobile doing the most to shake things up.

In the next few years, "50 percent of the world GDP will be transformed by these four forces," Saylor said. He contrasted that with the initial rise of the Web and the commercial Internet, which by 2001 had rewritten the rules for perhaps 5% of the economy. "A decade ago, we saw an extraordinary opportunity and threat in the market. That was an order of magnitude less than what we see today."

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In a keynote speech at the Microstrategy user conference and a follow-up press conference, Saylor spoke of social media exclusively in terms of Facebook and talked about mobile almost solely in terms of Apple products (with an occasional mention of Android).

Although not every customer a business wants to reach is an iPad-toting Facebook user, the important ones tend to be, he said. You can see that from the way the book publishing business is now reporting half of revenues are coming from digital books, even though tablets and e-readers reach a smaller percentage of the population. That's because "wealth, power, and money is concentrated in the hands of the first 50 billion people to buy these devices," he said.

Facebook is the same way, attracting all the most influential people, Saylor said. "Anyone with wealth or power on Earth is going to be sucked into the network," just because so much activity is centered there, he said.

Microstrategy has been capitalizing on these trends with apps for the iPhone and iPad for industries such as retail and pursuing the intersection of mobile and social with customers such as Guess.

Microstrategy has released a series of free Facebook apps, such as Wisdom, an analytic tool that lets you see demographic and behavioral trends from across the Facebook network, based on anonymized data from the subscribers to the app and their friend connections. Another free-to-consumers iPhone app, Alert, alerts users to changes in their social network and the Facebook pages they follow, in return for gathering information about those users. Microstrategy customers can use Alert as the basis for customized apps they offer to their own customers.

"I think social is very misunderstood in an enterprise context," Saylor said. People think it's a medium for advertising, or an entertainment medium for college students, without understanding that it's becoming "the most powerful means of gathering data to have come along in my business career," he said. "Every customer database in the world is now obsolete."

Traditional customer databases suffer from basic pieces of information such as address, phone number, or place of employment quickly becoming outdated. His solution to that is Microstrategy Gateway, a product built specifically to synchronize corporate data with Facebook data.

Facebook does have rules about what applications companies can gather through an app, or how it can be used, which Microstrategy says it is careful to comply with. For example, data can't be shared between Alert and Wisdom because Facebook rules dictate that data can only be used in the same context in which it was gathered. In order to keep customer records up-to-date using Microstrategy Gateway, a company would have to offer users an app and convince them to specifically grant access to their profile details.

Asked if he worried that Facebook would change those ground rules, either on its own initiative or under pressure from regulators, Saylor acknowledged things might change but said he suspects the basic value of Facebook will not.

"I think there is a lot more risk to be a business that ignores Facebook than one that builds on top of it," he said.

Follow David F. Carr on Twitter @davidfcarr. The BrainYard is @thebyard

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