Posted by Brian Hopkins on September 30, 2011
It seems that every week another vendor slaps “big data” into its marketing material – and it’s going to get worse. Should you look beyond the vendor hype and pay attention? Absolutely yes! Why? Because big data has the potential to shape your market’s next winners and losers.
At Forrester, we think clients must develop an intuitive understanding of big data by learning: 1) what is new about it; 2) what it is; and 3) how it will influence their market.
What is new about big data? We estimate that firms effectively utilize less than 5% of available data. Why so little? The rest is simply too expensive to deal with. Big data is new because it lets firms affordably dip into that other 95%. If two companies use data with the same effectiveness but one can handle 15% of available data and one is stuck at 5%, who do you think will win? The deal, however, is that big data is not like your traditional BI tools; it will require new processes and may totally redefine your approach to data governance.
So what is big data? In our CIO document on big data, we provide a deceptively simple answer: It is techniques and technologies that make handling data at extreme scale affordable. Put less formally, it provides affordable technology to people that understand how to get value from the 95% you are not thinking about right now. It’s also not just about big volume, either – other factors like velocity, variety, and variability are also important. In fact, when you just have one of these, like high volume, your existing technology may do the trick. It’s when you get several characteristics together that big data becomes attractive. Examples include customer call records, social graph data, point of sale transactions, and medical monitoring equipment data. Not only is it possible to collect a large volume of this stuff, but the data is usually is generated so fast that you need to constantly capture more of it to be valuable for some decisions.
How will big data influence your market? Every once in a while, a company will do something that rapidly elevates it to the top of its market. Walmart optimized its supply chain, drove down prices, and smacked its competition. Google, Yahoo, and Facebook used big data to deal with web scale search, content relevance, and social connections, and we see what happened to those markets. If you are not thinking about how to leverage big data to get the value from the other 95%, your competition is. In this information age, the firms that best turn information to their advantage will dominate their competition. And big data will play a big part in helping them do it.
Read the report “Expand Your Digital Horizon With Big Data.” In it, we help IT executives hone their intuition about the importance of big data and provide pragmatic advice that goes beyond just the technology.