LEF perspectives: The power of sensing engines

To anticipate market changes and customer desires, smart companies use sensing engines as part of an outside-in strategy to listen to the market, figure out what the market wants and responding accordingly. A sensing engine analyzes consumption data to reveal activities that are in high demand, on the rise, or falling. Such data can show where subtle changes in the market might indicate trends.

A good example — though controversial for its privacy implications — is Facebook’s VPN app. Facebook established a sensing engine by using the VPN app to route users’ mobile traffic through Facebook servers. Applying analytics, Facebook could discover which competitors were becoming popular and either clone their functionality or acquire them. Although well-intentioned, the approach turned out to be controversial, and the company had to remove the app over privacy concerns.^[1]

However, there is much less controversy when a company mines its own data. Consider Amazon Web Services. AWS can monitor the third-party products and functionality customers use and then build those capabilities into its software stack. In essence, others innovate and test the market, and Amazon uses its consumption data to make decisions on what features to build next.

Identifying effective sensing engines is not always easy. Depending on the nature of the business, it might be as simple as monitoring consumption (Amazon) or as complicated as finding new functionality in another business that could be cloned (Facebook). Either way, good sensing cannot be done without analytics-oriented solutions, as the sensing engine will be useless if its data cannot be mined.

Continue reading the position paper, "Embed advanced analytics into every aspect of your digital business."

Leading Edge Forum (LEF) is DXC Technology’s independent cross-industry think tank.