The investment industry is going to spend an estimated to $2,000,000,000-3,000,000,000 on data services in 2018, and this number is expected to grow at double digits per year in line with other industries. This expenditure includes the acquisition of alternative data, investments in related technology, and the hiring of qualified talent.

A survey by Ernst and Young shows significant adoption of alternative data in 2017; 43% of funds are using scraped web data, for instance, and almost 30% are experimenting with satellite data. Based on the experience so far, fund managers considered scraped web data and credit card data to be most insightful, in contrast to geolocation and satellite data, which around 25% considered to be less informative:

Reflecting the rapid growth of this new industry, the market for alternative data providers is quite fragmented. J.P. Morgan lists over 500 specialized data firms, while AlternativeData.org lists over 300. Providers play numerous roles, including intermediaries such as consultants, aggregators, and tech solutions; sell-side supports deliver data in various formats, ranging from raw to semi-processed data or some form of a signal extracted from one or more sources. 

We will highlight the size of the main categories and profile a few prominent examples to illustrate their diversity.