Exaflood update

Back in December, we published a post containing a link to some of the excellent analysis Richard McManus has been publishing at ReadWriteWeb on the exponential growth of data taking place all around us, often unnoticed and taken for granted.

Recently, he published a post entitled "The Coming Data Explosion" discussing some very interesting statistics, some of which were presented in a talk by Google's Marissa Mayer* in August of 2009.

These statistics confirm the predictions of Bret Swanson and George Gilder we pointed out to readers in our February 2008 post "Must-read: Unleashing the Exaflood by Bret Swanson and George Gilder."

For example, in Ms Mayer's presentation, she notes (beginning at 19:00 in the talk) that the amount of data on the internet was about 5 Exabytes in 2002 and had grown to 281 Exabytes by August 2009. She also cited analysis concluding that the average web user is uploading about 15 times more data today than the average web user just three years ago.

These statistics confirm the arguments we published throughout the financial downturn that the technological changes currently taking place are too powerful to be derailed by either economic catastrophes or political bungling. There may have been a financial panic in the past three years, but it didn't seem to make much of a dent in the progress of the "Exaflood."

This observation is extremely important for discerning investors to understand. There are plenty of negative geopolitical and/or economic developments for the media to focus on at any given time, which distract many investors from noticing tectonic events beneath the surface.

Instead, investors should be asking themselves how they can participate with well-run businesses that are unlocking new value based on those changes. We believe the Exaflood is still in its initial stages, and that investors should take the time to understand it thoroughly.

* The principals of Taylor Frigon Capital Management do not own securities issued by Google (GOOG).

for later posts on this same topic, see also: