Q&A: Why Open Data Is an Opportunity for the Private Sector

As federal agencies start implementing the 2014 Digital Accountability and Transparency Act -- which requires them to publish spending data in standard formats -- a few tech startups see an opportunity to make money.

One of those companies is 8-year-old Seattle-based tech company Socrata, whose customers include the Centers for Medicare and Medicaid Services, the state of Maryland and the City of Austin. Socrata sells software products designed to help governments upload datasets.

In advance of an upcoming customer conference in Washington, Socrata CEO Kevin Merritt chatted with Nextgov about the company’s federal business.

This conversation has been edited for length and clarity.

NG: What trends do you see in federal customers?

KM: The prevailing common open data use case is a federal agency wants to share its data assets with a number of different stakeholders externally. Those stakeholders have varying levels of tech capability and sophistication -- from regular everyday Americans who want to better understand what that agency is doing all the way to researchers, journalists, analysts who want to pore through and analyze government data to developers who want programmatic access into data.

We are starting to work with federal agencies in compliance with the DATA Act and helping them put their spending data online in a format that is not only useful to their core audiences but also in a way that can be useful to the Department of Treasury and to the Office of Management and Budget.

NG: How do federal agencies stack up to state and local governments in open data?

KM: State and local governments are more nimble in their ability to act on their decision to make this data publicly available. Cities and counties have been putting their budgets online for a decade . . . where they have been shifting in the last couple years is to the modern digital equivalents of those old analog PDFs, that citizens can now sort and search and filter and browse visually.

Now, the federal government is starting to do the same thing. The timeline for the implementation of the DATA Act is multiple years. They’re starting with the cabinet-level agencies. They’ll get to other agencies in the next couple years. . . It’s still early in the process, the standards are [still] being developed.

NG: What obstacles do you see when federal agencies try to publish open data?

KM: The biggest obstacle is that federal agencies have created bespoke financial systems over the last few decades. That’s the system of record, that’s where the raw data lives. But you need to get the data from the underlying system of record onto the platform. There’s some work there.

NG: Who within the federal government tends to spearhead open data efforts? Some agencies might not have a designated “open data” liaison.

KM: It does vary from agency to agency. Eventually, it lands in the CIO’s shop. 

In the generic open data context . . . it’s not always clear who’s responsible at the agency. All of them have a point of contact around open government and open data. And they have a liaison who works with the Data.gov site and gets their data. Usually, we can find that person fairly easily, but [if] they want to communicate about how data supports their mission, sometimes it’s a little more challenging to find that person.

We’ve had more success in the last couple years with less of a focus on “open data for transparency and accountability” and more around [agencies’] core data mission. The Environmental Protection Agency has been collecting data from the environment for 30, 40, 50 years. Their job is to analyze that data and turn it into something that every day Americans can understand, [like] “Hey, you should wear sunscreen today; the probability that you’re going to get a sunburn is high.”

NG: Is your industry getting more competitive even though federal agencies have restricted budgets? Your competitor OpenGov recently raised $25 million and Marc Andreessen joined its board.

KM: Competition is good for the customer; it’s good for the market. It’s even good for companies like OpenGov and Socrata, it keeps us on our toes.

It’s actually the fact that budgets are constrained that creates the opportunity. If government has the same budget this year than last year, their propensity is to repeat the status quo.

If you have to do as much work this year as you have last year but you have to do it with a smaller budget, it forces you to think about new delivery models, new cost models, new pricing models. That create opportunities for companies like Socrata.

(Image via vasabii/Shutterstock.com)