Berry

CHAPTER
2
The Virtuous Cycle
of Data Mining
In the first part of the nineteenth century, textile mills were the industrial success
stories. These mills sprang up in the growing towns and cities along rivers
in England and New England to harness hydropower. Water, running over
water wheels, drove spinning, knitting, and weaving machines. For a century,
the symbol of the industrial revolution was water driving textile machines.
The business world has changed. Old mill towns are now quaint historical
curiosities. Long mill buildings alongside rivers are warehouses, shopping
malls, artist studios and computer companies. Even manufacturing companies
often provide more value in services than in goods. We were struck by an ad
campaign by a leading international cement manufacturer, Cemex, that presented
concrete as a service. Instead of focusing on the quality of cement, its
price, or availability, the ad pictured a bridge over a river and sold the idea that
“cement” is a service that connects people by building bridges between them.
Concrete as a service? A very modern idea.
Access to electrical or mechanical power is no longer the criterion for success.
For mass-market products, data about customer interactions is the new
waterpower; knowledge drives the turbines of the service economy and, since
the line between service and manufacturing is getting blurry, much of the
manufacturing economy as well. Information from data focuses marketing
efforts by segmenting customers, improves product designs by addressing
real customer needs, and improves allocation of resources by understanding
and predicting customer preferences.
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