The Concept of the Dig Data Industry - Research Paper Example

Big Data of the of the of the College Big data is used to refer to high volume, high velo and high variety data. It consists of such vast and complex sets of raw data that traditional data processing software, applications and tools prove ineffective in converting in to useful information. The internet nowadays is home to a ginormous swamp of data which corporations and governmental institutions alike, along with other agencies, are interested in (Brown, Chui, & Manyika, 2011). However, given this large quantity, it is important to separate the relevant from the less meaningful data, and this creates the need for entities capable of processing big data and filtering it to the advantage of commercial units. Such is the importance of getting valuable and timely insight nowadays that the exploitation of big data is considered a crucial component in the chances of success of a firm (Lynch, 2008). Investment in big data however does come with significant risks which participants must account for. A recent report published by Transparency Market Research indicates that the global big data market is expected to grow at an average annual rate of 40.5% from the years 2012 to 2018 (PR Newswire, 2014a; 2014b). Seemingly great news on the outset, it does have some important connotations. Given the affordable rates of internet subscriptions, service providers do not necessarily have the cash to invest in their network bandwidth. This creates the possibility of speed deficiencies, network overload and collapse as the upsurge in the availability of big data will not be matched by requisite bandwidth to support it. Without the necessary ancillary services present, revenues of the big data industry could be affected. Moreover, the big data industry is warm towards new entrants. Hadoop, the open source software utilized by major market players such as IBM and Oracle, is available for free for use by other parties as well (Sonderegger, 2014). This proposes a great competitive risk to current players in the market, especially with corporations such as Yahoo, Facebook, LinkedIn and eBay all applying this technology nowadays as well (Sonderegger, 2014). This could also give impetus to the industry giants to acquire patents to secure their place in the market by squeezing out competition. Halting technological innovations and breakthroughs will be an important repercussion of this type of action. The emergence of cyber crime poses a great threat to the progress of the big data industry. Customers should have complete faith in the ability of companies dealing in big data to protect their private information from misuse by hackers. Press releases about security breaches and stolen information, such as in the case of credit cards, certainly don’t help the cause especially given the fact that the dominant companies in the market, such as IBM, Sony, and Apple are also not immune to this type of risk. As the coverage and size of big data increases, so does the chance of security leaks, data piracy, privacy infringements etc. via cyber crime. This could stimulate regulators to impose more stringent laws on big data activities to protect the interests of the relevant parties, but could go on to depress industry profits as well. The big data industry has gone to alter or create some of its own workings in the industry. A prominent trend witnessed across the industry is the shift towards unstructured data (Sonderegger, 2014). Structured data is generally user friendly and easy to analyze e.g. a corporate database. Unstructured data on the other hand requires more intensive analysis and effort as it comprises of audio, video, and other text components which can at times be subjective. The latter can thus be difficult to understand and evaluate and hence requires more resources to be devoted towards its management, which pushes up the cost of information. Companies are also shifting towards clouds, which are abstract information regions in the internet space (Sonderegger, 2014). This has allowed for more efficient information management in addition to better access and processing potential. This phenomenon serves as a signal to potentially new firms to divert from forming data warehouses towards cloud services as most revenues are projected to be generated from the latter in the future. Furthermore, with regards to the future, big data is also expected to be generated from machine to machine (M2M) using sensors to cater to the real time needs of corporations of wanting decisive information (Sonderegger, 2014). The big data industry hosts an array of dominant firms which constitute its key players. The likes of Amazon and Microsoft focus their efforts on cloud services; the former being the international front-runner in cloud infrastructure with the latter spending around 90% of its annual Research and Development allocation of cloud computing (PR Newswire, 2014b). Google pioneered the Hadoop technology, and is currently trying to compete in cloud services with the introduction of the Google Drive (PR Newswire, 2014b). Facebook on the other hand has gained huge importance ever since its advent given its user base of around 850 million (PR Newswire, 2014b). This has made it a relatively costless source of acquiring information, especially for marketers looking for views of customers about their products. Other players in the market include Oracle, Microsoft, HP and Dell but none as big as IBM which is perhaps the biggest of the lot. IBM offers a comprehensive collection of big data products and services, with a diverse portfolio ranging from hardware, middleware, cloud services, information technology, software as well as databases (Market Watch, 2014). It is the prime source for acquiring business intelligence, and its prominence was recognized by Frost & Sullivan when it awarded the company the 2014 Sub-Saharan African Frost & Sullivan Award for Competitive Strategy Leadership (Market Watch, 2014). Frost & Sullivan acknowledges IBM as the most well equipped firm for managing Big Data and offering the best solutions regarding its application. It also credits the company for eliminating the myopic nature of its clients by shifting their focus from short term profits to long term gain. IBM currently obtains 2.5 quintillion bytes of data every day from numerous sources, including information from social networking sites, corporate databases as well as government records of macroeconomic topics such as healthcare etc (Market Watch, 2014). The big data industry continues to advance given its enormous potential and profit making prospects. New companies are afforded a significant number of opportunities given the availability of big data. New retail startups can utilize information provided by big data to potentially boost their operating profits by about 60% (Manyika et al., 2011). Studies conducted by McKinseys Business Technology Office and MGI have also shown that there are welfare gains for customers available as well from such startups. Around $600 billion in economic surplus is up for grabs via avenues created through big data, such as support services and features of personal location data (Manyika et al., 2011). Of course the prospects created have differential actual or potential impacts across various industrial sectors. Reports based on nationwide data (U.S.) suggests that new firms are encouraged most to hail from finance, insurance, information technology and computing, as well as the electronics sector if they are to capitalize on big data (Manyika et al., 2011). These segments are believed to yield the greatest gains after applying several statistical calculations based on historical productivity figures in the U.S (Manyika et al., 2011). Experts are tipping new startups in management consultancy and analytics firms because they foresee a surge in the demand for big data. The rise is expected to be so large that it is anticipated that by 2018, there might be a shortfall of skilled labor between 140,000 and 190,000; this includes personnel capable of understanding and processing big data for its optimal use (Manyika et al., 2011). Another 1.5 million managers and analysts are also thought to be in deficit (Manyika et al., 2011). This indicates that in the years to come, firms will become so dependent on big data that there will not be enough manpower available at service providers to cater for this need. This presents a great opportunity for prospective entrepreneurs to get in the game now and create a sustainable entity which will help them reap profits from corporations requiring big data for years to come. Hence it can be concluded that the big data market is offering high growth potential to the companies. However, in order to capitalize on this opportunity and reap high profits the companies should evaluate all associated factors and dynamics of the market and should come up with effective and efficient strategies. References Brown, B., Chui, M., & Manyika, J. (2011). Are you ready for the era of ‘big data’?. McKinsey Quarterly, 4, 24-35. Lynch, C. (2008). Big data: How do your data grow?. Nature, 455(7209), 28-29. Manyika, J., Chui, M., Brown, B., Bughin, J., Dobbs, R., Roxburgh, C., & Byers, A. H. (2011). Big data: The next frontier for innovation, competition, and productivity. McKinsey Global Institute. Retrieved February 4, 2014, from http://www.mckinsey.com/insights/business_technology/big_data_the_next_frontier_for_innovation Market Watch. (2014). IBM Named an Innovation Leader in Big Data in Sub-Saharan Africa, Notes Frost & Sullivan. Retrieved February 4, 2014, from http://www.marketwatch.com/story/ibm-named-an-innovation-leader-in-big-data-in-sub-saharan-africa-notes-frost-sullivan-2014-02-03?reflink=MW_news_stmp PR Newswire. (2014a). Global Big Data Market - Industry Analysis, Size, Share, Growth, Trends and Forecast 2013 - 2019. Retrieved February 4, 2014, from http://www.prnewswire.com/news-releases/predictive-analytics-market-2013-2019-global-industry-analysis-size-share-growth-trends-and-forecast-to-2019-research-report-available-online-by-researchmozus-238840661.html PR Newswire. (2014b). Global Big Data Market Report 2013 - Scenario, Trends, Industry Analysis, Size, Share And Forecast to 2018. Retrieved February 4, 2014, from http://www.prnewswire.com/news-releases/global-big-data-market-report-2013---scenario-trends-industry-analysis-size-share-and-forecast-to-2018-239284331.html Sonderegger, P. (2014). "Big Data Gives Us More To Argue About." Forbes., Retrieved February 4, 2014, from http://www.forbes.com/sites/oracle/2014/02/03/big-data-gives-us-more-to-argue-about/ Read More