EMC put its weight behind Big Data when it bought us (and our friends at Greenplum) last year, and it looks like the rest of the big boys in IT are following suit, with “Big Data” seemingly on the agenda of most every IT leader around. Whether you believe the hype or not, it is becoming increasingly difficult to ignore Big Data and its potential to change enterprise IT.
Earlier this month, the McKinsey Global Institute gave us a giant high-five with a report entitled “Big Data: The Next Frontier For Innovation, Competition and Productivity.” We couldn’t be happier (well, maybe, but still, this made us pretty happy) to see that other heavyweights are getting on board the Big Data caravan and putting their brain muscle into examining Big Data and its potential impact.
The report sets out to “understand how data is used to create value for stakeholders and implications for private and public sectors and policy makers.” No small feat! The ultimate takeaways for us are A) that data is being created faster and it needs to be stored and managed and B) that simplicity will become more and more important to IT managers as the amount of data – and level of complexity in integrating all business data – swells.
If you’ve got some time this week, I encourage you download this behemoth (all 150 pages can be downloaded here– but hey, at least it’s free and no reg is required!). I promise you, it’ll be worth your while. However, if you don’t have time, I’ve bulleted it out for you below (if you read the report, you’ll learn that visualization is a big component of data consumption).
Big Data is an opportunity. And here are some of the most impressive opportunities and savings that can be realized:
- $300 billion more value each year for the U.S. health care system, two-thirds of which would come in reduced expenditures
- A potential for retailers to grow operating margin by 60 percent
- Up to a 50 percent decrease in product development and assembly costs for manufacturing
Seven Key Insights:
1. Data has penetrated every industry and business function
2. Big data creates value in several ways
• Create transparency and make data immediately available to stakeholders
• Use data to set up experiments in performance variability and improve employee performance
• Segment data and customize to specific markets • Replace and/or support human decision making with algorithms
• Innovate new business models, products, services
3. Use of Big Data will become key in competition and growth in new markets
4. Use of Big Data will lead to better designed products, increase productivity and consumer surplus
5. Not all sectors will can benefit from Big Data, and some face higher barriers in capturing value
6. Lack of talent will be key constraint in realizing the value quickly and usefully. The following three types of talent will be in high demand:
• Deep analytical skills to digest large amounts of information
• Data-savvy managers able to interpret results and make business decisions
• Supporting personnel to maintain hardware and software tools
7. Several issues to be addressed before we can fully capture the value of Big Data:
• Data policies – retention, privacy, security
• Technology and techniques – new hardware and software to store, compute, analyze, and regenerate in consumable format
• Organizational change – most companies today don’t have the incentive infrastructure in place to optimize use of Big Data
• Access to data – 3rd party data may not be available when needed and stakeholders may not be open to sharing
• Industries structure – some industries have inherently higher barriers to overcome in fully realizing the value of Big Data
But if it were that easy, everyone would be doing it, right? The folks at McKinsey highlight some legit challenges that organization leaders and policy makers need to consider when working out a Big Data optimization strategy. As with all emerging tech trends, our current mindset and infrastructure isn’t up to par. What we have currently is:
• Lack of analytical and managerial talent to know what to do with this data
• Lack of correct infrastructure (well, except for Isilon, which is the storage foundation for Big Data 🙂 and appropriate incentives built around big data analysis to spur competition for innovation
• Lack of understanding of the real/immediate benefits to societies, organizations, and individuals
• Lack of safeguards to protect private information
The report itself and the challenges ahead all seem a bit overwhelming, but McKinsey provides great examples of companies who are already pioneering Big Data analysis to benefit their top and bottom lines, like Amazon.com, or some folks that we are lucky enough to work with, like 3TIER and Petro China.
Speaking of 3TIER, they attended our Big Data Storage Summit at EMCWorld a couple of weeks ago and were one of about 30 companies that provided a great deal of insight into what Big Data is – and isn’t – and what we need to do about it. My colleague Chuck Hollis has a great round down of this summit here and I definitely recommend checking it out.
As 3TIER, PetroChina and many more companies demonstrate, a wide range of organizations are already turning Big Data into top and bottom line benefits. The key for business leaders is to align business and IT objectives and gauge where the sweet spots for differentiation and business growth are… And then challenges turn into opportunities.