top of page

What Is Dark Data and How Does It Affect Your SaaS Business?

Updated: Jul 19, 2022

Dark Data

Mention the words “dark data” and it immediately conjures up images of the Matrix, hackers, black hat tactics, and so on. Yet despite its cyberpunk connotations, this couldn’t be further from the truth.

Dark data is an incredibly useful source of information that SaaS businesses can tap into to improve their processes. But what is dark data, why is it so useful for SaaS companies, and how can you use it to maintain a competitive edge in the market? In this story, we’ll take an in-depth look at what this obscure form of data is, how it can affect your SaaS business, and how you can leverage it for your organization.

What is dark data?

What is dark data?

Companies are notorious digital hoarders. Lurking in the shadowy depths of your business devices and systems is a whole bunch of data that gets generated and then forgotten. Millions of folders and files, rooms full of servers, and digital documents stored in the cloud.

Gartner describes this “dark” data as:

“The information assets organizations collect, process, and store during regular business activities, but generally fail to use for other purposes (for example, analytics, business relationships and direct monetizing). Similar to dark matter in physics, dark data often comprises most organizations’ universe of information assets. Thus, organizations often retain dark data for compliance purposes only. Storing and securing data typically incurs more expense (and sometimes greater risk) than value.”

With this “universe of information” comes the opportunity to dig into your dark data assets and use what you find to improve your marketing, sales, and wider operations.

Why aren’t more companies using dark data?

Why use dark data

For any given company, dark datasets can be enormous. This is a huge bonus for your business, but quite the opposite for your team. Unravelling useful information from thousands of folders and files is enough to make anyone break out in a cold sweat. The sheer amount of incoming data for any given company far outstrips the capacity of people to analyze it.

The truth about dark data is that most companies have a ton of it but don’t (or can’t) use it to its full extent. In a recent study on the state of dark data, 81% of companies said data was important to their success. Yet, despite that:

  1. 56% of respondents said that “data-driven” is just a buzzword they use for their internal and external marketing.

  2. 44% of companies said they felt their ability to use the data they were collecting was mediocre at best.

  3. Companies estimated that 55% of their data was “dark.”

With such a huge amount of valuable data lying around – why are companies so unable or unwilling to use it?

For the most part, it’s because they don’t have the resources, tech, or knowledge to do so. Or, they simply put it in the “too hard” basket and focus on easier things.

Unstructured data analytics and business planning

Unstructured data analytics

How to use dark data effectively

Gathering data is a fundamental part of analyzing your business, increasing your revenue, and scaling your organization. Turning your regular data into useful insights can already be a headache for most companies – but throw your scattered, unstructured data in the mix and it seems like an impossible task.

With dark data making up 80%-90% of a company’s data at any given time, how can you make the most of this treasure trove of insights for your SaaS?

Organize all your unstructured data

Now you’re aware that there’s data literally lying around in your company waiting to be found, it’s time to assess the situation.

Do you have stacks of hardcopy data that can be digitized and put to use? Or folders with useful data that might come in handy that have since become data graveyards? Is there forgotten company data lurking around somewhere that you can start putting into action?

Figure out the lowest hanging fruit in your dark databank and start harvesting it to include in your analytics strategies.

Utilize unstructured data analytics tools

Start thinking ahead for how your SaaS will manage its future dark data with the rapid evolution of technology and the Internet of Things (IoT).

Artificial intelligence (AI) and analytics tools are developing at breakneck speed. Taking time to strategize and plan ahead will prepare your company to adopt new tech and new ways of working together with AI-based systems to gather your data.

The dark side of dark data

The dark side of dark data

While collecting and using your newly found data stash is good – there is a dark side of using dark data. Dark data isn’t exempt from regulatory compliance, privacy standards, and security protocols, which means retaining and analyzing unstructured data isn’t just expensive but it’s also inherently risky.

Data searching and accessibility is becoming an increasingly complex matter, especially in SaaS, and regulations aren’t keeping pace as fast as they could be. Even with GDPR now established as part of Europe’s digital privacy legislation, SaaS companies have a growing amount of sensitive dark data at their fingertips – should they choose to use it.

With apps easily integrating with other apps and single points of logins becoming more accepted, the web of possible data collection stretches ever wider.

Misuse of data isn’t limited to the giants like Facebook. Even small startups could be at risk from storing or incorrectly using the data they’re collecting. Dark data can cause problems in three main areas:

1. Security

The more data you have, the more you have to lose if your systems are attacked. Those long forgotten files might prove very interesting and useful to outside parties. If your dark data isn’t being given priority in terms of keeping it secure, it could be a disaster waiting to happen.

2. Compliance

Do you know if the data you’re storing and breaches regulations like GDPR, HIPAA, SOX, or PCI-DSS? If you don’t know what these are, or the information that they regulate, your company could be at risk of falling short on compliance for something as simple as a forgotten Excel file.

3. Cloud data storage risks

Cloud data storage locations or hybrid storage of data often lacks the levels of security that on-premise data has, leaving your SaaS exposed to potential hacks and leaks. That sensitive information may not be as protected as you think it is.

If your SaaS doesn’t have a data management system in place, and is storing excessive amounts of dark data, it might start to become more risky than relevant for your business.

The future of dark IT

The future of dark IT

A Cisco estimate states that by the end of this year, the IoT will create more than 500 zettabytes of data per year. That number is something that will grow exponentially every year. Data is getting out of control – and it seems the only thing that can save us is AI.

Rapid advancements in tech and AI solutions for big data analytics mean companies will be soon be able to find and process more of their mysterious dark data.

AI will begin to increase the stakes for business survival, and companies will need to think about investing more heavily in this technology as it develops.

A spokesperson for Deloitte states:

“Over the next 18 to 24 months, an increasing number of CIOs, business leaders, and data scientists will begin experimenting with ‘dark analytics focused’ explorations of the vast universe of unstructured and ‘dark’ data.”

This means companies will be capable of gathering large amounts of untapped data containing insights that can help increase sales, improve customer experience, and boost growth. It’s an exciting time to be in business!

Dark data is an untapped resource you shouldn’t ignore

The sheer amount of data in your company is probably a big, scary mystery that you’re afraid to open the door on. Beginning to shed some light on the dark data within your SaaS gives you an opportunity to start analyzing the information you never knew you had, and turning it into meaningful business outcomes.

Business intelligence and analytics are getting more powerful by the day, so it’s in the best interest of every company to embrace this new tech to keep a competitive edge in the market.


Want more SaaS industry trends and insights? Subscribe to our free email newsletter to get our top stories delivered to your inbox (about twice a month).


bottom of page