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Why Big Data is the New Oil

March 26, 2015

There’s no more denying it: big data is here. And everywhere you look, there’s a different indicator of how it’s impacting our businesses and our lives.

What does all this data really mean for businesses? To put it quite simply, it changes everything. Businesses can use big data to understand their customers in ways they never thought possible while simultaneously using those insights to serve customers better. Big data represents such a transformational force that many people are comparing it to oil, a natural resource that drove tremendous disruption and value during the previous century.

Big data is a valuable resource for businesses because it helps them understand the things their customers want and need. A good example can be found in a New York Times article from 2012, which described how retail giant Target was able to predict when women were pregnant by their buying habits, enabling the company to market baby products to expectant parents.

In many ways, what we buy defines our lives. A pregnancy is one example of a time when a person’s life changes greatly; it only makes sense that their buying patterns would change as well. If businesses are paying attention to the signals their customers send them—as Target was in this case—they’ll be better able to proactively market the types of products that their customers are most likely to be interested in at that particular point in their lives.

One of the biggest challenges that anyone who deals with big data faces is not merely finding data. It’s finding the right data and being able to process it immediately.  Finding the data you need to understand in order to serve your customers better can be like the proverbial needle in the haystack — only the haystack is growing at an exponential pace.

It takes a lot of disk to hold big data, which implies corporations will have to weigh the advantages of data mining against the cost of buying and maintaining storage hardware and the software it takes to manage the extra data.

In the same way that oil requires significant infrastructure investments to be sourced, stored and processed, big data puts the same requirements on CIOs.  CIOs have to provide efficient ways to store and access big data in a way that fits their companies’ financial models.

According to Gartner, CIOs can follow these guidelines to help them address the challenges associated with big data:

  • IT and business leaders must improve their ability to communicate the business value and economics of big data projects.
  • Solution architects must evaluate the many business uses for and sources of big data, especially those beyond internal data used only for decision making.
  • Project and human resource management should take into account the different analytical and governance skill sets required for information leadership on big data initiatives.
  • IT project leaders should prepare for the infrastructure and architecture changes required to ensure adequate performance, flexibility and usability of big data solutions.” [1]

We are standing at the precipice of a new business reality: those organizations that can take advantage of big data as the valuable new resource it is will be in the best position to become leaders in their industries. However, organizations must be able to capture, store and analyze big data properly in order to derive value from it.

[1] Gartner, Answering Big Data’s 10 Biggest Planning and Implementation Questions, Douglas Laney, Alexander Linden, Frank Buytendijk,Andrew White, Mark A. Beyer, Neil Chandler, Merv Adrian, Jenny Sussin, Nick Heudecker, 08 January 2015

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