External and Internal Data Differences in the Data Marketplace

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Think about your dining options. You can cook at home using ingredients from your fridge—comforting, reliable, but perhaps a bit limited in variety. Or you can go out to a restaurant where the world’s cuisines are at your fingertips, exciting yet sometimes unpredictable. These two choices mirror the data landscape in organizations. “Home-cooked” internal data is generated in-house, offering control and familiarity. “Dining out” on external data provides variety and enrichment but comes with its own challenges. Just like your dining choices, each type of data has its own flavor and appropriate moment. 

Businesses leverage both external and internal data sources to stay competitive and drive innovation. They typically mix their own internal data—from sales, finance, and marketing—and external data from places like social media and market research firms. Blending these two types of data gives businesses a full picture of the market and customer behavior. It’s a goldmine for decision-makers who aim to fine-tune operations and spark innovation. 

Knowing the differences between external and internal data helps companies use each to its full potential, making their strategies more robust and adaptable.

What is external data?

External data comes from outside your company, usually from specialized data providers. It encompasses a wide range of sources that includes:

  • Public records
  • Market research
  • Social media
  • Web-harvested data

The amount of external data continues to grow, giving businesses a goldmine of info they can tap into. External data can really beef up your own data and give you a full picture of customers and the market. Companies leverage it to identify trends, understand their audience, and ultimately make smarter decisions for smoother operations.

Data marketplaces give you all sorts of info, from who people are to where they live and what products they ship. Useful business data also comes from sources like online searches, customer reviews, and even mobile locations. Companies that obtain this kind of data really understand who their customers are, see where the market is headed, and even find new ways to make money. As more of this data becomes available, companies can make better choices and run their business more smoothly.

Common uses and limitations

Examples of popular external data sources include:

  • Nielsen Retail Measurement Data: Used by businesses to analyze market share, competitive sales volumes, and insights into market dynamics.
  • NOAA Weather Data: Utilized by various sectors, from agriculture to retail, to predict weather patterns and their potential impact.
  • Google Trends Data: Provides search trends data which can be insightful for marketers and researchers.
  • Dun & Bradstreet’s Commercial Database: Used by businesses for credit decisions, supplier chain insights, and risk management.
  • Zillow Real Estate Data: Provides housing and rental market data, beneficial for real estate investors and planners.

External data offers several advantages, such as: 

  • Giving you a broader look at market trends and customer desires 
  • Forecasting future events
  • Enhancing the quality of your own data 

It’s not all smooth sailing, however. You have to watch out for mistakes, take time to clean the data, and make sure it’s actually useful.

Additionally, some of this data might not meet all the rules your industry has, so you’ve got to be careful there too. Still, the benefits outweigh the headaches. You get insights you wouldn’t get otherwise.

What is internal data?

In contrast to external data, internal data is information an organization generates from within, collecting from departments like Sales, Finance, Marketing, and HR.

Internal data, which comes from your own company’s sales, finance, and HR departments, includes everything from customer info and sales numbers to website hits and phone logs. The data is generally reliable because it’s sourced directly from your operations. It’s valuable for understanding what’s working and what’s not, so use it wisely to maximize resources. Just make sure it’s clean and accurate for the best outcomes.

Common uses and limitations

Internal data is not only easy and cheap, it helps you understand your own business. It doesn’t, however, tell you much about the market or your customers. For that, you’ll need to add external data to the mix to give you a fuller picture. A combination of internal and external data can spark new ideas and grow your business.

Moreover, internal data can be limited in scope and may become outdated if you don’t regularly refresh it. It also lacks the diversity of viewpoints that external data can offer, which may potentially lead to biased or narrow conclusions.

Key differences between external and internal data

Several differences between external and internal data exist, particularly in the context of secure data sharing:

  • Accuracy
  • Accessibility
  • Ownership
  • Cost
  • Compliance
  • Security

Companies that know the difference between external and internal data can better figure out what info to use and how to mix them for the best results.


The old adage “garbage in means garbage out” still rings true. Internal data is usually more reliable because you collect it yourself. External data can be hit or miss because it comes from different places. Ensure both types are accurate to promote smart decision-making and run your business smoothly. Always double-check external sources and keep your internal data clean.


Time is money, especially when you hunt for data. Internal data is easy to get to because it’s in your own systems. External data is harder to obtain and may require you to buy or pull it from different places. If you want to make smart choices about data, you need to make sure both types are easy to grab. Quick access to the right data is a game-changer when you make decisions on the fly.


Ownership isn’t just power; it’s responsibility. You own your internal data, so you call the shots on how to use it. External data usually belongs to someone else, so you might have less control. Know who owns what so you can make smart choices about how to use and share data. Always check the legal stuff when you use external data, like copyrights or data usage agreements.


Data has a price tag, and it’s not always in dollars and cents. The real cost of internal data isn’t just financial; it’s also the time and manpower spent collecting and analyzing it. Think of it as an investment of resources, not just cash. External data, on the other hand, often means you have to pay to get it from someone else. Be smart about these costs to use your resources well and make decisions backed by good data.

Compliance and Security

The need to keep data secure is non-negotiable, no matter where it comes from. Internal data is usually safer because it’s in your own system. External data might need extra security steps like encryption. If you want to keep your data safe, make sure both types meet security and compliance rules. Don’t forget to update your privacy policies and ensure you meet any regulatory standards.

External and internal data: Pros and cons

External and internal data each have their own upsides and downsides. Knowing these pros and cons can help your business figure out how to use them together for the biggest impact. Consider the cost, how accurate the data is, and how easy it is to get your hands on it.

External data fills in the gaps with info from different places. It gives you a better idea of what the market and customers are up to, and what your competition looks like. All this extra info can help you make decisions and plan your strategy.

External data, however, can be messy, incorrect, and expensive to get. Internal data is usually more accurate and easy to access, which is great if you need to make quick decisions. If you only use internal data, however, you might miss out on some big-picture data like market trends. Mixing both kinds of data gives you a fuller view and helps you make smarter choices.

Select the right data for your needs

Companies must select the right data sources for their specific needs to make the most of data-driven insights. Consider such factors as:

Businesses that take these factors into account are better able to make informed decisions about which data sources to use and how to mix them for the greatest impact.

Select between external and internal data

Before you dive in, know what you’re after. Do you need quick market insights or a view of long-term trends? Determine your needs ahead of time to pick the right type of data. Next, check for accuracy; it’s a must-have for good decision-making. Make sure the data aligns with what your company wants to achieve. Don’t forget about cost; think about what you’ll spend to get, store, and keep up the data. Finally, play it safe and legal. Make sure the data you use won’t get you in hot water with laws or regulations.

Revelate facilitates both external and internal data usage

Revelate is a one-stop shop that helps you make the most out of your data, whether it’s from an internal or external source. It gives you the tools to easily share data, tap into a massive pool of global data, and sort it however you want. All of this helps your business make informed decisions and operate more efficiently.

Revelate enables organizations to:

  • Securely share data with teams and other organizations
  • Access petabytes of standardized data from global providers
  • Slice and dice data into your desired sets for analysis and collaboration

Ultimately, Revelate makes it easy to blend external and internal data, a capability that helps businesses gain insights and innovate faster.

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Frequently asked questions

What is internal data and what are some examples?

Internal data refers to data that comes directly from a company’s systems, such as sales and financial data, marketing data, human resource data, transaction types, topics, and occurrences. This type of data is specifically controlled by the company in order to provide information about its operations, transactions, and current practices.

What is the difference between external and internal data?

Internal data is the information generated from within a business, including areas such as operations, maintenance, personnel, and finance. External data comes from the market, such as surveys, questionnaires, research, and customer feedback.

What are internal data types?

Internal data types represent the column type in a data dictionary. Businesses also use them to model working data for policies and store copies of external data or intermediate values of data.