Software is a pervasive presence in almost all our daily activities at home or in the workplace. The Internet of everything that has enabled this pervasive computing is now driving a wealth of information about the physical world to enterprises. Enterprises today aim at leveraging this information to gain specialized knowhow. This knowhow is an outcome of proprietary data working on proprietary Deep Learning algorithms. They yield the kind of competitive advantage that can drive digital disruption of an entire market place. It is this phenomenon that is giving birth to what is termed the Algorithm Economy.

The Algorithm Economy helps enterprises in these fundamental ways.

Know Your Customers Better

Enterprises today can build connected smart products that can keep telling them how their customers are using their products. We already are aware of how smart phone vendors and application providers have built entire ecosystems around mining every click and choice a customer makes to better understand their behavior. This helps them build better products and service their needs better. Now take this same concept and apply it to every thing imaginable being smart and connected. Think of a washing machine manufacturer having data from millions of machines with actual usage data of sophisticated settings, wash cycles and other usage metrics. Sifting through this data with advanced analytical algorithms can yield usage patterns that cannot be learnt through traditional marketing techniques. This proprietary knowhow can then be leveraged in many ways.

This new data stream can lead to customer segmentation around usage patterns that are derived from accurate automated data collection. Existing models of customer segmentation can also be further enhanced to incorporate these usage patterns. A smart connected product can also potentially allow for an interactive communication channel directly with end consumers of a product.