Big data, and the ability to sift through and manage it, has become a core competitive advantage in nearly every industry, as successful companies are mining their data for information that might turn a series of seemingly random numbers and information into solid-gold profits.
Still, what does the term “big data” really mean? Is it something beyond a buzzword? Simply stated, big data is just that–all the data that is generated and comes into the realm of companies today. And it’s growing.
IBM, one of the leading players in this emerging space, estimates that 2.5 quintillion bytes of data are created every day from a variety of sources, including sensors, social media and billions of mobile devices around the world, making it difficult for businesses to navigate and analyze it to improve competitiveness, efficiency and profitability.
IDC estimates the market for big data technology and services will grow at an annual rate of nearly 40 percent to reach $16.9 billion by 2015.
Moreover, every month people send 1 billion Tweets and post 30 billion messages on Facebook. Meanwhile, more than 1 trillion mobile devices are in use today and mobile commerce is expected to reach $31 billion by 2016.
Big data and analytics go hand-in-hand. Analytics is the discovery and communication of meaningful patterns in data. One of the most common uses of analytics is to mine business data to describe, predict and improve business performance.
Specific areas of analytics include enterprise decision management, retail analytics, marketing and Web analytics, predictive science, credit risk analysis and fraud analytics. Retail, marketing and customer management have been key areas of focus for leading vendors. For instance, IBM and Adobe have made major investments in marketing analytics. And SAS, another leader in the space, has focused on analytics of all types, including predictive analytics.
However, the field is still very much open to newcomers, with startups like Quant5 entering the market with their brand of analytics solutions and services.
“Industries furthest ahead in big data are Web/Internet, financial services, retail, some manufacturing and marketing departments across all industries,” said Andrew Brust, a big data expert, analyst and consultant who founded Blue Badge Insights in New York City. “Web/Internet, retail and marketing are analyzing Weblog and social media data to determine browsing and buying patterns and sentiment. Financial services analyze market data, ostensibly for trading strategies and design of financial products. Manufacturing companies use so-called ‘historian’ data to monitor assembly line equipment and develop predictive models for when such equipment might fail.”
Mark Pitts, director of science, solutions and strategy at United Healthcare (UHC), told eWEEK that the company uses analytics for a variety of purposes to serve its millions of customers, including quarterly forecasts, preventing fraud and customer service opportunities. In addition, his team uses the SAS High-Performance Analytics platform, which enables them to analyze more data and work in a massively parallel environment. As such, Pitts said his team was able to bring one particular process that used to take more than four hours down to 10 seconds.
Big Data Offers Big Opportunities for Retail, Financial, Web Companies
“My team uses SAS products almost exclusively,” said Pitts, who noted that he has programmed in SAS since 1985. “With SAS, we’ve been able to respond to any business questions as they arise. It’s a very different world now as compared to when I started out doing this. I started programming SAS on a mainframe, and we had very limited sources of data. Now, there is an explosion of data from a variety of sources–some of which we haven’t even seen yet, like telemetry data from personal medical devices.”
SAS recently announced that its SAS High-Performance Analytics Server now supports more analytics, including text mining and optimization. And the predictive modeling capabilities of SAS High-Performance Analytics Server now also use Hadoop Distributed File System (HDFS), the popular open-source big data infrastructure.
“Hadoop is the big data platform of choice for Macys.com’s analytics team, and SAS is our analytics engine that drives insights,” said Kerem Tomak, vice president of marketing analytics at Macys.com. “We connect the two environments to create an analytics solution that drives business value.”
Meanwhile, IBM predicts a big payday from big data and analytics, and has invested in it accordingly. The company projects $16 billion in business analytics revenue by 2015, and to meet that target has established a vast portfolio of analytics solutions, growing its business and industry expertise to approximately 9,000 business analytics and optimization consultants and 400 researchers. IBM has also created global analytics solution centers in Berlin, Beijing, Dallas, London, New York, Tokyo, Washington and Zurich.
Nancy Kopp, director of big data strategy at IBM, said it has spent $16 billion on acquiring more than 30 companies to build targeted analytics and information expertise, and continues to expand its ecosystem, which today consists of more than 27,000 IBM business partners. IBM has also secured hundreds of patents a year in analytics.
“The reason why we’ve been so acquisitive is that it was the quickest way to get to where we wanted to be,” Kareem Yusuf, vice president of strategy, mergers and acquisitions in IBM Software Group, told eWEEK. Yusuf said he has overseen at least 10 of IBM’s analytics acquisitions. However, as IBM continues to acquire analytics expertise, the company internalizes that expertise, and what was at one point inorganic growth starts to become more organic growth, he said.
“By IBM entering the market, it completely altered the dynamics in the marketplace,” said Elana Anderson, director of enterprise marketing management at IBM, who came to Big Blue from its acquisition of Unica, a provider of marketing analytics solutions. “The key thing IBM has done in the market is amplification.”
Big Data Offers Big Opportunities for Retail, Financial, Web Companies
With its Smarter Commerce strategy, IBM is applying analytics to commerce overall, with a strong recent focus on marketing analytics. IBM’s Smarter Commerce initiative delivers software and services to help companies transform their business processes to more quickly respond to shifting customer demands. The initiative is driven by the demands from users who are increasingly looking for ways to bring new levels of automation to marketing, sales and fulfillment to secure greater customer loyalty.
The explosive growth of mobile, social and online commerce is a key trend within Smarter Commerce. The new software brings together the power of social networking, analytics and mobile computing to front-office operations and externally to clients. As a result, users can gain faster insight on customer buying patterns and consumer sentiment.
“We are living in the mobile and social age, where consumers are turning to friends for product advice and their smartphone and tablet to make purchases,” said Craig Hayman, general manager, IBM Industry Solutions. “As this momentum continues, CMOs must trade in more traditional tactics in favor of smarter approaches that extend their personalization capabilities beyond the PC.”
IBM began working on its Smarter Commerce play 12 to 18 months before announcing it to the world, and Big Blue expected to maintain a 12- to 18-month lead on competitors, but Hayman said he believes the company’s lead is longer than that.
Moreover, Smarter Commerce is a pet project of IBM chairman and CEO Ginni Rometty, he said. “Her first external event as CEO was a conference in New York about how CMOs and CIOs can better work together,” said Hayman. “It was all about Smarter Commerce.”
Today, 83 percent of midmarket CIOs surveyed by IBM have identified analytics, the ability to extract actionable insights from big data as their top-priority investment area. Meanwhile, IBM’s Retail Online Index identifies several trends of importance to chief marketing officers (CMO), e-commerce leaders and customer service professionals. Part of IBM’s Smarter Commerce initiative, the Retail Online Index draws data and insights from IBM’s big data offerings to provide a look into the pulse of online retail through traditional and social media channels.
Meanwhile, IBM created a Customer Experience Suite to give marketing professionals the power to manage and integrate all types of data on their Websites and then analyze it for deeper insight into customer buying patterns and sentiment.
“The benefits we are able to see from using this advanced IBM analytics technology are that it will give us the ability to put the right message in front of the right customer at the best time and in the best channel,” said Justin Croft, manager of marketing campaigns and promotions at C Spire, a leading telecommunications service provider and the eighth-largest wireless provider in the United States.
Big Data Offers Big Opportunities for Retail, Financial, Web Companies
Adobe is playing in the same world as IBM with its digital marketing strategy. Adobe restructured last year to focus on two things: digital media and digital marketing. However, not everyone is convinced Adobe can move into these new markets.
“Adobe has a good relationship with digital media agencies, but no depth in analytics,” Hayman said.
Not so, said Brad Rencher, Adobe’s senior vice president who runs the company’s digital marketing business, which relies on the foundation of Adobe’s Omniture analytics technology.
“When I think of IBM, I think of big–bigger but not necessarily better,” said Rencher. Adobe’s highlight is a digital marketing suite of technologies a CMO will use.”
Rencher said a key part of the Adobe strategy is predictive analytics.
“Adobe is playing in the big data world–we’re in the cloud,” said Rencher. “The challenge for our customers is there’s so much data it’s easy to get lost in it all.” However, he said, “Data is the franchise. It’s the underpinning of everything we do.”
The Adobe Online Marketing Suite, powered by Omniture, offers an integrated and open platform for online business optimization, a strategy for using customer insight to drive innovation throughout the business and enhance marketing efficiency. The suite consists of integrated applications to collect and unleash the power of customer insight to optimize customer acquisition, conversion and retention efforts as well as the creation and distribution of content.
“Today’s leading organizations know that to stay at the forefront of the digital enterprise transformation, they must establish meaningful and lasting connections with their customers,” said Melissa Webster, an analyst at IDC. “This is especially challenging, given the multiple channels through which customers now interact with businesses.”
Adobe runs massively parallel software as a service (SaaS) offerings through about 23,500 servers and networked devices in 19 data center co-location sites. Adobe captures more than six trillion transactions per year for its more than 5,000 digital marketing customers. Collectively, these transactions represent more than 27 petabytes of data, the company said.
“Historically, all Web analytics have reflected data from the past which has been to a certain extent like driving a car using only the rear-view mirror,” said Ken Seiff, executive vice president at Brooks Brothers. The new predictive marketing capabilities from Adobe are helping the clothier forecast revenue, he added.
Meanwhile, big data remains a new field within IT—one with a lot of potential but nowhere near mature enough to accomplish all that it can. The next few years will help determine its future.
“To make big data more manageable, I believe that all the technology and the practitioners have to become more enterprise-ready,” Brust, the consultant said. “The technology is very raw and hard-core. It needs to become more friendly and more manageable with standard enterprise data center technologies. Otherwise, the skill set is impossibly hard to find and fund and SLAs [service-level agreements] are rather very tough to maintain.”
