Over the past fifteen years, the nature of the World Wide Web has transformed from static, individual Web pages and basic email ("Web 1.0") to the current Web ("Web 2.0") where a host of new capabilities such as social networking, wikis and instant messaging have transformed the way individuals and enterprises use the Web.
Today, "Web 3.0" technologies also known as "the Semantic Web" are gaining traction on both sides of the firewall and migrating toward the mainstream market. The Semantic Web is the World Wide Web Consortium's (W3C) vision for the next generation of the Web in which the meaning of information and services (on the Web) can be easily understood by other applications without requiring human interpretation. Semantic technologies can apply the standards developed for the Semantic Web to data within the enterprise and its supply-chains to make all enterprise information easy to find and use, based on its meaning. These technologies promise to enable a new level of data collaboration that extends the capabilities of information on the Web and in enterprise systems to be shared in dramatically more meaningful ways. So dramatic that Sir Tim Berners-Lee - a British engineer credited with inventing the Web - has identified semantics as the key technology for the next generation of the Internet.
Innovators in the financial services industry have taken a lead in applying semantic technology to pressing and chronic data challenges, many of which stem from the difficulties associated with making the vast volumes of valuable corporate intelligence locked in everything from core business applications and data warehouses to Excel spreadsheets easily accessible and reusable.
A recent example of the benefits of semantic technologies can be found in collapse of the subprime mortgage market. Financial organizations could not quickly identify and quantify the exposure to subprime mortgages that might have existed in their own portfolios. Imagine how things might have turned out if management teams, shareholders and investors could have been told exactly what they owned and where it was.
As we all know now, answering this question wasn't possible because the bad loans were obscured in packages that had misleading labels and incomplete provenance. The underlying components were stored across numerous organizations and departments, and the knowledge of how those packages were assembled and stored was lost as they were moved and repackaged over time. Once the names changed and the linkages were broken, there was no way for existing data management systems to follow the path back and assess the extent of the problem. The data was stored in siloed systems ranging from traditional RDBS based applications to Excel spreadsheets that neither talk to each other nor use the same terminology.
Semantic technologies offer the potential to pierce the opacity of traditional data management systems and allow financial services organizations to answer these kinds of mission-critical questions quickly. Semantic technologies organize data based on a set of concepts known as an ontology, which captures what the data actually means, regardless of what it is named. A subprime mortgage might be recognized by its properties rather than its name, so no matter where a "thing" exists that contains the properties of a subprime mortgage, it can be located.
A semantic implementation effectively creates a fabric to which all enterprise data can be connected. One benefit of this is the ability to discover provenance and history. As data is added to or changed, it is now possible to see who changed it, how it was changed and even recall the original version, potentially a boon for standards compliance.
Lastly, unlike relational data models that require us to anticipate all the data we will need to accommodate in advance, the semantic data model can be defined as the data arrives. This allows new data to be added on the fly which is tremendously valuable as new products, services or rules are added by the business domain.
Michael Cataldo is the CEO of Cambridge Semantics, a provider of semantic technology applications for the enterprise.