Big data used to mean the ‘how much is Amazon worth’ number but it’s actually a little more complex – and messy – than that.
FYI – In September 2018 their market cap hit $1 trillion before falling back to a frankly embarrassing $995 billion.
So What Actually Is Big Data?
Ask a thousand data scientists and you’ll get a thousand different answers but according to technology writer, professional project manager and certified computer instructor Paul Gil writing in Lifewire, it’s ‘the new science of understanding and predicting human behaviour by studying large volumes of unstructured data.’
Ironically the very type of unstructured data you’d get from asking a thousand data scientists the same question.
From marketwatch.com ‘Big data is of great use to organisations as it helps in detecting customer behaviour patterns, consumer trends and preferences. Companies utilise comprehensive data sets to make better decisions about their business. Many enterprises employ advanced analytics to organise large and varied data sets. This, in turn, allows the analysts and business owners to form a better and much more efficient strategy.’
By analysing online buying habits, social media posts, sat-nav searches, eBay searches, even ATM transactions, companies can effectively personalise their offerings and prices to maximise customer satisfaction.
It’s no coincidence that the adverts you see on websites you visit are from sites you were looking at 20 minutes earlier elsewhere. It’s no coincidence that the emails you get from Sainsbury’s and Tesco contain money off vouchers for products you buy regularly. It’s also no coincidence that the ads you get on your Facebook feed are damn-near perfect for you, even though they’re annoying…
When they say they use it to ‘maximise customer satisfaction’ what they actually mean is ‘to get you to buy more of their stuff.’
But it’s not just used by companies to put billions on the bottom line.
- By analysing thousands of hours of video footage and presumably millions of images, the police in Boston were able to quickly narrow down their search for the Boston Marathon bombers
- Visa use big data to identify and catch fraudsters by watching millions of transactions and analysing the data for patterns
- Facebook (for all the trouble they’ve been in regarding personal data), study your ‘likes’ and browsing habits and delivers an eerily accurate insight into your tastes and the sidebar ads are as a result of spectacularly complex algorithms that have been watching what you’ve been up to
It turns out the old cliché really is true – you can run but you can’t hide.
What Is The Big Data Market Worth?
Loadsamoney. Forrester predict that the big data software market alone this year will be worth $31bn – 14% up y-o-y – (around 5% of the entire worldwide software market) and the big data market could be worth something like $275bn by 2023, but the monetary value of the market is secondary to the value it offers to businesses.
However it starts with chaos.
The conversion of massive amounts of unstructured, seemingly random data into datasets that are searchable, sortable and understandable takes a lot of work. As an example, programmers at delivery giant UPS spent years analysing GPS and smartphone data from their 99,000 vehicles and 424,000 employees at a cost of, presumably, many tens of millions of dollars but today, they save over 8m gallons of fuel a year.
For the UPS-sized businesses of this world says John Dix, Editor-in-Chief of Network World, ‘every little bit of efficiency you can squeeze out of daily operations translates into a big deal.’
Big Data In Numbers
How much data are we actually talking about? Big data firm Syncsort have given us some numbers and to put some of them into perspective, the world population is around 7.6bn and there are 4.2bn internet users with over 3bn on social media of one kind or another…:
- Analysts predict that by 2020, there will be 5,200 gigabytes of data on every person in the world
- Around 500m tweets are sent every day
- There are 2.23 billion active monthly Facebook users, 1.5 billion log in every day
- There are 500m daily Instagram users sharing 95m images per day
- There are over 175 billion Pinterest pins shared by 250m active monthly users
- The average American mobile phone customer uses 1.8Gb of data per month
- About 200 billion emails are sent every day
- MasterCard processes 74 billion transactions per year
There’s lots of people doing lots of trackable things (you included) and if you get a lot of clever people in a room, they can pore through what everyone is up to and create (profitable) beauty from chaos.
Data Is Everywhere, How Can Businesses Harness It For Good?
The amount of data is only ever going to get bigger and the beauty of it is that it’s all recorded somewhere.
A blog from Rutgers University said that ‘IT and other skilled technology professionals at innovative firms such as Google, Tesla and Uber have leveraged the power of data analytics to break into new markets, build stronger relationships with consumers, and streamline processes such as supply chain and marketing management.’
At a macro-level, big data can, according to Inside Big Data, ‘pinpoint and correct areas of inefficiency as well as provide many risk management options — creating ample opportunity to plan for a company’s growth.’
- It can prepare a business for future manoeuvrability and furthermore, it allows for flexibility to adjust the adjustments where necessary
- Companies can take bigger financial risks with more confidence and the direct repercussions of doing so are reflected in ROI and corporate growth
- It allows companies to understand their audiences better and in a more granular way, especially through social media. ‘This data is a goldmine from a marketing perspective. Companies are now able to understand how customers are talking about them, specifically what they like and don’t like’
- Data of this sort allows businesses to understand their audience and by extension to know which marketing strategies will work and crucially, which won’t. They are using analytics tools to reveal vital insights about their true potential.
It’s Only For the Zillionaires, Right?
Of course the process of collating, sorting and analysing big data ain’t cheap. The biggest players spend millions trying to improve the customer experience (aka make them spend more cash) but small businesses can also play without forking out crazy money.
Bernard Marr, CEO of the Advanced Performance Institute says that we are at the very beginning of the digital revolution and offers five reasons why SMEs need to embrace big data now. ‘Businesses who remain sceptical or delay the incorporation of data into their business, will likely miss out on growth and may not survive.’
- Big data improves decision making throughout the company, not just at the C-Suite level
- Big data allows SMEs to better understand customers by tapping into freely available data from Google, Facebook and Twitter
- Big data helps SMEs deliver a better service or product for customers, it can also create a whole new customer value proposition
- Big data can help businesses run more smoothly and efficiently – from the warehouse to customer services and everything in between
- Big data can help businesses to monetise, including selling the actual data
‘Anything companies can do to become more informed, efficient and make better business decisions is a good thing.’
Have a good week.