ISSUE 17 P18
DESIGNED BY DATA We look at how designers are being LQȵXHQFHG DQG DVVLVWHG WKURXJK WKH XVH RI GDWD LQ ERWK IHHGEDFN DQG PRGHOOLQJ
P7
IT TAKES MORE THAN DATA TO GET OPTIMIZED Paul Thompson looks at how companies can get optimized, it goes ZHOO EH\RQG WKH FRQȴQHV RI GDWD
P22
BIG DATA SPEND IS INCREASING Gabrielle Morse takes us through the reasons why Big Data spend is increasing and the implications that WKLV PD\ KDYH RQ WKH IXWXUH
EDITOR’S LETTER Welcome to Issue 17 of Big Data Innovation.
we move away from the initial promise.
We are now beyond midway in 2015 and it has become clear that WKH LQȵXHQFH RI GDWD driven initiatives this \HDU KDV KDG VLJQLȴFDQW impacts on how businesses and society operates. From the adoption of senior data roles in governments, through to the VLJQLȴFDQW UROHV LW LV QRZ playing in healthcare.
Despite this relative disengagement from the initial promise of Big Data, we are seeing that spend is increasing. Gabrielle Morse takes us through the reasons for this growth in spending and what it may mean for the future.
This edition looks at many of the issues we are facing in the world today that are being fought with data from the streets to the boardrooms. One of the main challenges that data is dealing with today, is the disenchantment that many have with it after the initial hype. We therefore investigate whether we need to look at Big Data 2.0 as
James Ovenden looks at how Big Data is taking a OHDGLQJ UROH LQ WKH ȴJKW against ISIS and their recruitment of young and impressionable people across the world.
Towers also talks us through how Big Data is being used to inform designers and companies when developing new products. As always, if you are interested in contributing or have any feedback on the magazine, please contact me at ghill@theiegroup.com George Hill Managing Editor
Hayley Law tells us about some of the key issues that is stopping Big Data getting bigger in many companies today. Paul Thompson from Periscope takes us through the processes of optimization needed in companies, moving beyond the data being used. Whilst Chris
Managing Editor: George Hill
Art Director: Oliver Godwin-Brown
Assistant Editors: James Ovenden Simon Barton
General Enquiries: ghill@theiegroup.com
Contributors: Hayley Law Chris Towers Paul Thompson Gabrielle Morse
CONTENTS P11
It’s Time For Big Data 2.0
George Hill takes a look at the reasons behind the disillusion in Big Data and whether we need to start Big Data 2.0.
P4. P11
3 4 09 84 0 5 7 7
4
P7
6
0
P4
43 9FIGHTING ISIS WITH BIG DATA
THE STICKING POINTS OF BIG DATA IN COMPANIES
IT TAKES MORE THAN DATA TO GET OPTIMIZED
Why is Big Data not always taking the
Paul Thompson tells us how companies
James Ovenden looks at how companies
leading role that it could in companies
can get optimized, it goes well beyond the
and governments should be looking to
WRGD\" +D\OH\ /DZ ORRNV DW VRPH RI WKH
FRQȴQHV RI GDWD
GDWD WR KHOS ȴJKW Ζ6Ζ6 DQG FXUE LWV VXFFHVV
NH\ UHDVRQV
LQ VRFLDO PHGLD
P18
DESIGNED BY DATA
P22
BIG DATA SPEND IS INCREASING
DO YOU WANT TO SEE YOUR WORK PUBLISHED IN BIG DATA INNOVATION?
We investigate how designers are being
Gabrielle Morse takes us through the
Contact our Editor, George Hill at
LQȵXHQFHG DQG DVVLVWHG WKURXJK XVH RI
reasons why Big Data spend is increasing
JKLOO#WKHLHJURXS FRP IRU PRUH
GDWD LQ ERWK IHHGEDFN DQG PRGHOOLQJ
and the implications that this may have on
LQIRUPDWLRQ
WKH IXWXUH
THE STICKING POINTS OF BIG DATA IN COMPANIES
Hayley Law, Summit Manager, Big Data Innovation
As data moves through an organization, FRPSDQLHV DUH ȴQGLQJ WKDW WKH ZD\ LW LV EHLQJ used and communicated is causing issues
5
THE STICKING POINTS OF BIG DATA IN COMPANIES
Big Data has become an integral cog in many companies today, but what we have seen is that it is not always used in the correct ways and that some companies are still struggling to deal with some of the issues thrown up by data.
that he doesn’t believe in “this claptrap that data is the new currency. It’s not. Data is the new raw material and information is the new currency…”.
Following the ‘Computing Big Data Review’ from Computing Research most of the key issues were LGHQWLȴHG DQG ZH KDYH pinpointed three of the NH\ ȴQGLQJV EHORZ
The idea is that the information is the ȴQLVKHG SURGXFW RI WKH data production line, whilst the data itself is what is needed to create it. Although it certainly has a value, unless it is used and PRXOGHG HHFWLYHO\ LW will not have as much as it potentially could.
Information Is What Has Value
The Movement Of Data Causes Issues
Although many commentators have claimed that data has a value, the truth is that it is the information that is attained from this which has the real value.
As data moves through an organization, companies are ȴQGLQJ WKDW WKH ZD\ it is being used and communicated is causing issues.
A local government CIO who was interviewed by Computing noted
the truth is that it is the information that is attained from WKLV ZKLFK KDV the real value.
For instance, the movement from the BI or Data Science team, through to business analysts and then to departments who can action change is one of the key aspects that businesses are struggling with. The same CIO claimed “The hand-over of the information and understanding from the BI teams to business
analysts is not as seamless as it could be, even though they work pretty much as one team”. This shows that although the information that comes from this relationship is still useful, the speed at which it gets to key players is diminished. Turning The Data Into Useable Insights 5HPDLQV 7KH .H\ Challenge 48% of those asked in the survey maintained that turning raw data into information is their biggest challenge within the process; something that only goes to show that the value of data comes after it has been processed. 7KLV ȴQGLQJ LV QRW surprising, simply because the actual collection, and often even the collation, of data has become
48% of those asked in WKH VXUYH\ maintained that WXUQLQJ UDZ GDWD into information is their biggest challenge
relatively simple and can often be automated. The dearth of data science talent that can bring this data into useable insights speaks to the fact that the creation of useable insights is the most GLɝFXOW DQG YDOXDEOH aspect of the process.
6
Nai l t
. y g e t a he str
Nurture the culture.
Access t h
e goldmi
ne.
9-10 September, 2015 | Boston hlaw@theiegroup.com
theinnovationenterprise.com/summits
+ 1 415 692 5378
SPEAKERS INCLUDE ie.
Innovation
Erik Andrejko VP, Data Science
Shiv Vaithyanathan Chief Big Data Scientist
Shirin Hamid Chief Technology Officer
Kristi Cunningham VP, Data Management
Stephen Wolfram Founder & CTO
7
IT TAKES MORE THAN DATA TO GET OPTIMIZED Paul Thompson, VP Client Services, Periscope
Senior management VKRXOG ORRN EH\RQG pricing or promotions WRZDUG EURDG UHYHQXH management
The promise of Big Data is alluring, but partnering it with great analytics alone is not enough to deliver the insight that businesses need, particularly in the complex area of pricing and margin optimization. But the pressure to move quickly is strong as companies worry about competitors already ȴQGLQJ LQVLJKWV DQG making advances. Datadriven insights can create
value across the business, helping managers tailor assortments at the store level, simultaneously enhancing the customer experience and improving unit economics, but it has to be done methodically. A handful of companies have pushed ahead and gained clear advantages. Using just one or two levers, some are boosting sales by 1-3%
8 and margins by 100 to 500 basis points—a VLJQLČ´FDQW LPSURYHPHQW for many retailers. Using multiple levers across the organization could improve revenue growth E\ DQG SURČ´W E\ 10-20%. Retailers have always struggled with operating at scale, and many are struggling now to embed insight-driven approaches across their organizations. Inertia is a fact of life in every large organization, from government agencies to sports leagues, and retailers DUH QR GLÎ?HUHQW $V WKH pace of change increases and the marketplace becomes more complex and competitive, merchandising and marketing teams may not feel they have the time to learn new approaches or master complicated new tools—even if they recognise the value. Without a major changePDQDJHPHQW HÎ?RUW PRVW people will keep thinking, planning and executing in the same ways. The right people with the right mix of analytical and business experience need to be on board to use much more rigorous decisionmaking processes, standardize processes across categories and geographies, and
IT TAKES MORE THAN DATA TO GET OPTIMIZED
V\QFKURQL]H HÎ?RUWV DFURVV the organization. Superior data management is essential to providing refreshed and regular insights, and powerful tools need to be available that don’t require an advanced computer science degree to use. Transformation on this VFDOH LV GLÉ?FXOW DQG WDNHV time. The ‘chain to impact’ includes both human and organizational factors such as people and process, as well as technical enablers including data, solutions and advanced insights. A typical transformation HÎ?RUW KDV D URXJKO\ chance of achieving the targets set by the company. But companies who commit to using an evidence-based approach, building the right analytical team, and leveraging the latest insights and solution breakthroughs succeed with transformation HÎ?RUWV RI WKH WLPH +HUH DUH Č´YH WRS WLSV WR help ensure improved pricing and margin optimization: 5HPHPEHU ΖWȇV D MRXUQH\ not a trip Given the complexity and variety of activities in the retail business, companies can’t move quickly to where they want to be. They increase
their chances of success by taking small measured steps, each big enough WR PDNH D GLÎ?HUHQFH LQ performance but small enough to be embedded and scaled within the organization. Changes that are too small won’t move the needle on performance, and changes that are too big won’t stick. In addition, companies should commit to a strategic roadmap of how they will embed analytics, insights and actions into their organization and the organization should be educated and committed to this vision. A company that commits to improving pricing each year, for example, can begin by asking what steps it can take this quarter and next. That said, senior management should look beyond pricing or promotions toward broad revenue management, which will mean changing the way they run the business and becoming more insight-driven at scale. Leaders should consider all of the constituents required to drive their strategy, including organizational elements, VXFK DV VWDÎ? FDSDELOLWLHV and best-in-class processes along with technical elements, such as data management,
The right people need to be in the right seats on the right bus going in the right direction analytics and software systems. This holistic approach across people, process, and technology JHQHUDWHV VLJQLČ´FDQW impact, including better decisions on promotional activities and trade investment, and sustainable change within the organization. Get the people on board It is easy, and potentially also dangerous, to focus RQ WKH VKRUW WHUP EHQHČ´W or impact of change, yet the change process is often long and interlinked. The right people need to be in the right seats on the right bus going in the right direction. This may mean hiring in additional talent, moving people into a more HÉ?FLHQW VWUXFWXUH RU HYHQ aligning the organization to the strategy. It should also be noted that hiring outstanding candidates is intensive and must be done with rigor and focus.
IT TAKES MORE THAN DATA TO GET OPTIMIZED
Move to decision-based data management It’s human nature to look at the information in front of us for clues. But most retailers do better if they Č´UVW GHČ´QH WKH NLQGV RI decisions they want to improve and then look for data that can inform those choices. Selecting improvement areas can also help managers structure the data, decide where accuracy is paramount, and determine whether to buy software or build it from scratch. For example, datadriven insights can often help make promotional spending PRUH HÉ?FLHQW %XW what kinds of decisions does the company need to improve? How are targeted customer segments responding to the promotions? What behaviour is the retailer trying to incentivise?
Successful transformations W\SLFDOO\ EHJLQ ZLWK D “coalition of the ZLOOLQJČ‹ ZKR are prepared to VKRZ WKH ZD\
How big should discounts be? What time of year or in which geographies to RÎ?HU D GLVFRXQW" :KHUH WR mail coupons or circulars? Each decision requires GLVWLQFWO\ GLÎ?HUHQW GDWD and analyses. Choose the right solution In choosing or designing tools, retailers should look for an easy-touse solution that can improve performance with insights the merchants and analytics team understand. More sophisticated tools can be useful for expert users, but if a typical end user doesn’t understand the insights behind the tools, the investments may be wasted and adoption slow. Our experience has shown us that the best
WRROV RÎ?HU VRSKLVWLFDWHG insights but are intuitive (and almost fun) to use. The software also has to EH ČľH[LEOH HQRXJK WR NHHS providing useful insights as the marketplace changes. Some early rulesbased systems were built on the assumption that the single overriding goal ZDV RSWLPL]LQJ IRU SURČ´W EXW SURČ´W LV UDUHO\ WKH RQO\ goal of a well-conceived strategy. Change mindsets and behaviors Successful transformations typically begin with a “coalition of the willingâ€? who are prepared to show the way. These leaders help form dedicated teams who begin documenting
processes. The revenue management team should be the foundation, and experts help teams improve core revenue management processes and guide the evolution of D ČľH[LEOH DQG H[SDQGLQJ set of databases and tools. Experts “teach the art,â€? and employees throughout the organization receive training. It is a multi-year journey to insight-driven leadership that can present many challenges along the way. The rewards of success—and the costs of falling short—are enormous. Retailers need to start down that path now to keep pace with their competition in a marketplace that is revolutionising itself with incredible speed.
10
MAKE BETTER DECISIONS WITH VISUAL DATA. 9–10 September, 2015 | Boston
jordan@theiegroup.com +1 415 992 7918 theinnovationenterprise.com/summits
ie.
Visualization
Summit
11
It’s Time For Big Data 2.0 George Hill, Ma anaging Editor
ZH QHHG WR ORRN DW D VWURQJ DQG UREXVW ZD\ to enter Big Data 2.0
12 $V Ζ ȾLFN WKURXJK another web page that ȾDVKHV DGV IRU VHYHUDO items that I bought months ago, before checking my inbox to ȴQG D SHUVRQDOL]HG email trying to sell me something that I was researching but would never buy, a thought came to me; In many ways, I hate Big Data. The hype surrounding the new technology has PHDQW WKDW WKH EHQHȴWV it once had are now seen as something basic, such as targeting and personalized, messages and people are now expecting more.
Even the most KLJK SURČ´OH use of Big Data WRGD\ *&+4 DQG the NSA, have failed to use it WR HÎ?HFWLYHO\ stop terrorism or arrest potential terrorists We have seen the success that this kind of approach has had with personalized adverts, targeting people who KDYH YLVLWHG VSHFLČ´F VLWHV DQG YLHZHG VSHFLČ´F products. Data tells
IT’S TIME FOR BIG DATA 2.0
companies the best time to advertise to people to get them to buy and it also reveals the best places to do so. However, what this has done is create a similar situation to what our parents had to deal with on television adverts; you learn when you should ignore adverts. However, rather than walking out of the room or changing the channel for two minutes, we have learnt to just ignore them. This is far worse for companies as we no longer simply avoid these adverts but subconsciously block them out. Facebook has been one RI WKH PDLQ EHQHČ´FLDULHV of this system, with their complex algorithms based on the vast amounts of data available to them through people’s SURČ´OHV +RZHYHU when you look at their pricing for targeted adverts compared to placing ads on other similar sites that are not WDUJHWHG WKH GLÎ?HUHQFH is negligible. If it was such a money driving advertising technique then surely they would be able to charge considerably more. Even the most high
SURČ´OH XVH RI %LJ 'DWD today, GCHQ and the NSA, have failed to use LW WR HÎ?HFWLYHO\ VWRS terrorism or arrest potential terrorists. After all, if it was so successful why have there been an estimated 150 US citizens and upto 400 British citizens leaving WKH FRXQWU\ WR Č´JKW IRU ISIS in the Middle East? If Big Data could do what was claimed, then we should be able to track who is thinking about going to Syria and then be able to stop them. However, neither of these things are the fault of Big Data itself. Instead, the fact that I am disappointed by these is down the hype surrounding Big Data and the expectation that has come from its initial use cases. We have seen such massive jumps from its use that now when I look at something that hasn’t worked with data, I get disappointed, which is hardly fair, but is the feeling that people tend to get today. We are starting a stage of disillusionment as the huge gains we have made are largely under appreciated and instead we are concentrating on the failures of elements
that were oversold as solutions. Perhaps we could argue that it is the fault of companies who have claimed much simply to gain clients, but without considering the long term impacts of their work. This disillusionment has meant that we need to look at a strong and robust way to enter Big Data 2.0, which will need to be a realistic view of what we should be able to achieve with data, rather than what we want or hope. It ZLOO UHTXLUH D GLÎ?HUHQW approach, without the hype surrounding the product at the moment. It is potentially world changing, but the view of it and the potential impacts that it will have need to be reigned in, creating a situation where people are happy with the results that we get, not disappointed that they haven’t changed the world as much as they thought. It is not to say that what has been achieved so far has not been successful, but more that the potential that people were sold is not the same as the reality of what has been achieved.
ie.
13
Big Data & Marketing Innovation Summit 5-6 NOVEMBER, 2015 MIAMI
Big Data, Bigger Marketing
www.theinnovationenterprise.com/summits jordan@theiegroup.com +1 415 992 7918
FIGHTING ISIS WITH BIG DATA BY JAMES OVENDEN
53
8
2
5
5
2
2
0
9
9
4
3
8 0
7 1 4 2 8 7
2
1 07
One of the advantages of Big Data is that it can be used to build profiles of potential terrorists and locate areas with large numbers of people who match these
4
ASSISTANT EDITOR
3
2 47
1
3
6
15 3 07
8 50
15
FIGHTING ISIS WITH BIG DATA
0
75
1
4 8
3 4 9 0 4 8 0
6 3 4 22 94
6 4 3
0
7
9
07
83
0 07
2 3 6 1 1 1 2 9 3
Nowhere does the power of Big Data cause more concern than when in the hands of the National Security Agency. Though it’s not the idea of Big Data that disturbs people, so much as it is the idea of mass surveillance. Privacy panic is all the rage, and while people fear terrorist attacks, they don’t necessarily believe preventing one is worth someone reading their e-mails.
Privacy Pr Priva ac panic is all the e rage, r and while people fear terrorist attacks, they don’t necessarily believe preventing one is worth someone reading their e-mails
The case for using the Big Data gained from mass surveillance only holds up if it actually works though. In a Financial Times blog, Zeynep Tufekci argues that analytics are, by their very nature, the wrong tool to be using. Big Data analytics, she says, ‘when conducted on massive datasets can be powerful in analyzing and identifying broad patterns, or events that occur regularly and frequently, but are singu-
ODUO\ XQVXLWHG WR ȴQGLQJ unpredictable, erratic, and rare needles in huge haystacks.’ Tufecki argues that government forces would be better prepared to prevent attacks by paying attention instead to the causal chain that leads terrorists on their path. Which, to continue her metaphor, isn’t D YHU\ JRRG ZD\ RI ȴQGLQJ a needle in a haystack either. The best way to
16 ȴQG D QHHGOH LQ D KD\ VWDFN is with a giant magnet, though it’s unlikely that this would be a successful way of catching terrorists. This is besides the point anyway, as the two things are not mutually exclusive. One of the advantages of Big Data is that it can be XVHG WR EXLOG SURȴOHV RI potential terrorists and locate areas with large numbers of people who match these. One of the main tools being used against ISIS is social media analytics. ISIS is renowned for their social media prowess, with the use of Twitter and Facebook central components of a recruitment drive that has seen them become the most popular organization IRU ȴJKWHUV FRPLQJ IURP foreign countries.
ISIS ISIS is renowned for their heir social media prowess, with the use of Twitter and Facebook central components of a recruitment drive that has seen them become the most popular organization for fighters coming from foreign countries
FIGHTING ISISS WITH BIG DATA A
The terrorist group and its supporters send an estimated 200,000 tweets a day, a ripe number for analysis that can be used to leverage a number of actionable insights. Big Data taken from social media can establish what motivates terrorists and determine the characteristics of potential recruits. A massive data mining project conducted by the Qatar Computing Research Institute in Doha analyzed data from social media to ȴQG WKH RULJLQV RI VXSSRUW for ISIS, looking at more than 3 million tweets sent over a three month period, from which they created an algorithm that could identify user sentiment to an 87% level of accuracy. 7KH DUWLFOH LV DOVR ȵDZHG LQ that Tufecki makes a number of assumptions as to the success, or lack thereof, of Big Data as an anti-terrorism tool. She cites several examples of terrorist atrocities in the West as examples of Big Data’s failings, but neglects to mention times it may have been successful, mainly because she doesn’t know. The simple truth is that there is no easy solution for terrorism, and lone wolves are always going to occur as they are incredLEO\ GLɝFXOW WR SUHYHQW However, it would be foolish to disregard Big Data DV D WRRO LQ WKH ȴJKW
32246 4 00943 75084
9
0 3 3
6 0172 43 8 60 0102
3856
4
5 4723 2 9 0943 7543 3 5738945
43 32 49 62 8 9 0 3 6 4 2 309
0092 55589 75084
0
75084 0092
3398 21648
11 48305
75084 471
0
691 69424
972
17
INTERNET OF THINGS SUMMIT 9-10 SEPT, 2015 | BOSTON www.theinnovationenterprise.com/summits jordan@theiegroup.com +1 415 992 7918
ie.
18
Designed By Data Chris Towers, Head Of Big Data, Innovation Enterprise
As each individual bolt, beam and VFUHZ LV LQFOXGHG in the design, WKH DELOLW\ WR WHVW through millions of GLÎ?HUHQW VFHQDULRV becomes possible
DESIGNED BY DATA
The concept of desig i n is one of the oldest LGH HDV LQ WKH ZRUOG 3OD DQQLQJ KRZ WR GR so omething before em mbarking on it is at WK KH EDVLV RI HYHU\WKLQJ J ZH GR IURP WKH PRVW basic, such as cooking food, to the most complex, like building vast civil engineering projects. Designs have largely fallen into two broad categories; those designed for aesthetics a those designed and for f practicality. Those c companies who have managed m to merge the t two perfectly are the o ones that have had the most m success, and it is largely l considered to be down d to the genius of a particular p designer o leader. or However, H with the amount of information a that t we have today, this may m not necessarily need n be the case. A strong design should come from the data thatt you can collect based on o n the use, or potentiall usse, of the product. Thiis u ccoul u d be from the way ys in i which people use itt, to t the h basics of desig gn and st a s ress testing.
Therre are several exam mples of how thiss can n be used: Sm mart Car Creation 'HVSLWH EHLQJ WKH Č´UVW major car company over a century ago, Ford has managed to create an innovative and reactive organisation that has utilized VLJQLČ´FDQW WHFKQRORJLFDO developments to improve the design of their cars.
incre ease sustainabilit ity ZLWK KRXW DÎ?HFWLQJ the eir bottom line, ma aking these changess su ustainable in both th he environmental and business sense.
Kicksstarter, people are now more amena able to looking at productss tha at are not necessarily ly av vailable or which may y be e in an experimental phase.
A/B Testing Real Products
Companies have found that by putting variations of products to the public vote, they can use the data gathered to make decisions about which products to create based on public interest or which changes to make to an existing product through general consensus.
A/B testing has been a popular method RI FUHDWLQJ HÎ?HFWLYH marketing choices, but has been underused in other areas.
For instance, the Ford F-150 has been designed with data to reduce weight and carbon emissions. They have managed to combine this with a sustainable and SURČ´WDEOH EXVLQHVV model by not simply FUHDWLQJ D ČľHHW RI hybrid or electric cars, preferring instead to concentrate on the elements of their traditional cars that could lead to reduced emissions.
A quick explanation of the process is that two (or more) variations of something are given to people and the numbers who click or react to each is monitored with the variation with the most clicks being the ‘winner’. It is a very simple concept, but due to the constraints on manufacturing, something that many have not utilized when it comes to products themselves.
Through combining userr data and sales data, th hey have managed to o reduce weight and
With the change in how people are buying prroducts started by y companies like
20 Designs have ODUJHO\ IDOOHQ LQWR WZR EURDG categories; those designed for aesthetics and those designed IRU SUDFWLFDOLW\ Architectural Design And Testing As well as needing to build modern structures that look good, one of the keys to the success of a building is how it can stand up over time or during natural disasters. Testing of this kind could be done on a broad spectrum previously, but with increasingly complex algorithms being used in CAD design
DESIGNED BY DATA
programmes it is becoming even more accurate. With the ability to design down to where the tiniest bolt ZLOO Č´W WKURXJK WKH smallest beam, the structural integrity of a building can be created in increasingly complex models. 'LÎ?HUHQW YDULDWLRQV can be included and tested to establish the strength and quality of a structure in several GLÎ?HUHQW VFHQDULRV from natural disasters through to potential degrading of materials over time.
The Ford F-150 has been designed ZLWK GDWD WR UHGXFH ZHLJKW and carbon emissions
As each individual bolt, beam and screw is included in the design, the ability to test through millions RI GLÎ?HUHQW VFHQDULRV becomes possible, and with faster computing power and complex DOJRULWKPV GLÎ?HUHQW circumstances can be created to test the overall integrity of any structure designed in this way.
INTERNET OF THINGS SUMMIT The Rise of the Interconnected World
25-26 NOVEMBER, 2015 | BEIJING
www.theinnovationenterprise.com/summits ryuan@theiegroup.com +44 (207) 193 1534
21
22
Big Data
Spend Is
Increasing Gabrielle Morse, Big Data Evangelist, Innovation Enterprise
comp mpanies are spending an averag age of 4m on data re rela late ted d in init itiatives in 201 0 5 $7.4
23
BIG DATA SPEND IS INCREASING
ΖQ WKHRU\ D FRPSDQ\ could start a data SURJUDPPH E\ VLPSO\ GRZQORDGLQJ RSHQ VRXUFH VRIWZDUH DQG running data through DOJRULWKPV +RZHYHU WKLV LV XQOLNHO\ WR EH WKH case as in order to make WKLV ZRUN FRPSDQLHV need to have the QHFHVVDU\ VNLOOV DYDLODEOH WR WKHP LQWHUQDOO\ Therefore, companies DUH ȴQGLQJ WKDW WKH\ DUH needing to invest heavily in data in order to create decent insights. In fact a recent IDG Enterprise study found that companies are spending an average of $7.4m on data related initiatives in 2015. With enterprises investing $13.8m and SMEs $1.6m, it shows WKH VLJQLȴFDQW QXPEHUV behind the Big Data industry. Much of this money will be spent on what are essentially free-touse platforms, such as Hadoop, with companies like Cloudera and Hortonworks building either more UX friendly or complex systems on an open-source foundation. These have seen VLJQLȴFDQW UHVXOWV IRU these companies, with Hortonworks going public and increasing steadily in
value and Cloudera being number 36 in the 500 fastest growing companies in the world in 2014. Behind these numbers and increasing spend is the basic idea that Big Data is spreading in scale and expectation across many businesses. Numbers back up this idea, with the IDG survey showing that 70% of organizations asked had either deployed or are planning on deploying in the next 12 months. With these numbers it is not surprising that spend is increasing and is likely to increase further in the next few years. Simple systems that may have been adequate for the start of data initiatives need to be upgraded in
order to process more data in less time. As the use of data increases this is going to increasingly be the case, but as the numbers of adopters increases, the chances are that there is going to be a plateau in spend as less companies take the initial jump into data initiatives. Aside from the actual technology surrounding data initiatives, one of the key outlays is on the renumeration of data scientists and those with data science skills. Diginomica claim that the average wage for a data scientist is currently $118,000, meaning that if there was a team of 10 data scientists the outlay alone would be close to $1.2m. $V WKH VXSSO\ RI TXDOLČ´HG
WKH DYHUDJH ZDJH IRU D GDWD VFLHQWLVW LV FXUUHQWO\
data scientists increases in future, the chances are that this number will decrease and therefore the overall spend on employee compensation will fall. However, the KD Nuggets payment studies of the last two years have shown consistent growth in salaries, meaning that we are not close to this point yet. At present, the money spent on data initiatives is a strong indicator of the health of the business function, but as we move into a world where adoption becomes more widespread, the size of the increases in spend may decrease as improvements will take the form of tweaks rather than full implementations. However, at the moment we are seeing that spend on data initiatives is increasing at an impressive rate and this is likely to continue for at least the next 2 years, ZKLFK LV GHČ´QLWHO\ D ERRQ for the big data companies at the moment.
0XFK RI WKLV PRQH\ ZLOO EH VSHQW RQ ZKDW DUH HVVHQWLDOO\ free-to-use platforms, such as Hadoop,
24
For more great content, go to IE OnDemand 1
Over 4000 hours of interactive on-demand video content Over 4000 hours ou s o off interacti ctive on-de n-de ema and a video content All s All summ su mmit it att tten endee es w e will rece rre eceive cei eive ive trial acc access to ac t ieOnDemand Demand ema mand n
Stay on the cutting edge Innovative, convenient content updated regularly with the latest ideas from the sharpest minds in your industry.
Listen
Watch
Learn
+44 (207) 193 1655
sforeman@theiegroup.com
SUBJECT TO SPEAKER CONSENT S
www.ieondemand.com