Big data is becoming a big business
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Businesses have gone data crazy. You can’t blame them. Streaming, real-time data analysis promises to bring the type of predictability that cuts costs, solves problems and grows sales.
That seemed to be the unofficial theme of the Strata + Hadoop World conference held the first week of October in New York. Each year the brightest minds in data science congregate to talk about where the business of data is headed. And the future is bright. Inexpensive sensors are creating massive amounts of data that can be harnessed and manipulated by software in real-time to glean insights. Industry by industry, sector by sector, data-bred ideas are transforming business in profound ways.
Ginni Rometty, chief executive at IBM (IBM) believes Big Data analytics will radically change the way businesses operate and makedecisions. “Many more decisions will be based on predictive elements versus gut instincts,” she told the Corporate Conference. She went on to emphasize that all businesses, whether they like it or not, will need to become data driven to compete. If they chose to ignore data analytics they will not survive.
So far, they seem to be heeding her warning. The research company IDC forecasts Big Data and business analytics will grow to $203 billion/year by 2020 from its current $130 billion level. The bulk of the growth will be concentrated in software as reporting and analysis tools take center stage. That will certainly benefit firms that enable software modelling like Splunk (SPLK).
However, convergence with artificial intelligence means there will be room for growth for traditional hardware companies, too.
At the Strata + Hadoop conference Martin Hall, chief data scientist for Big Data solutions at Intel, made that case succinctly, “we now have the data, the analytics and the compute power to deliver more than insights – we can enable intelligence.”
IBM has been one of the leaders in the field and its clients have had a number of big data analytics success stories. T-Mobile, the giant US-based telecommunications firm, used data analytics to provide real-time, actionable insights to make significant improvements in its network. Seton Healthcare,located in Austin, Texas was able to reduce the number of patients being readmitted to hospitals for congestive heart failure through the analysis of large amounts of unstructured data such as doctor notes, discharge summaries and echocardiogram reports. And Anthem (ANTM) uses Watson, IBM’s artificial intelligence platform, to generate evidence-based recommendations for its nurses.
Analysis of streaming, real-time data is no longer a data scientist fantasy. It’s here and companies need to embrace it to compete in the future. That will create many opportunities for software and hardware firms. My research indicates Splunk is well positioned and IBM is looking better all of the time.
About Jon Markman: A pioneer in the development of stock-rating systems and screening software, Jon Markman is co-inventor on two Microsoft patents and author of the bestselling books The New Day Trader Advantage, Swing Trading and Online Investing, as well as the annotated edition of Reminiscences of a Stock Operator. He was portfolio manager and senior investment strategist at a multi-strategy hedge fund from 2002 to 2005; managing editor and columnist at CNBC on MSN Money from 1997 to 2002; and an editor, investments columnist and investigative reporter at the Los Angeles Times from 1984 to 1997.
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