A Close Up on Big Data Deployment Trends

The deployment of Big Data systems continues to consume an increasing percentage of IT budgets across the globe. Some analysts project the Big Data vendor market is currently $5 billion and will grow beyond $50 billion in the next five years.

 So how will these investments in Big Data systems translate into new revenues and market opportunities for companies?

No one can really accurately project the future impact but rest assured that CEOs and CIOs are taking their Big Data pursuits seriously in anticipation that Big Data will lead to big revenue. The following survey results supports these ideas.

Tata Consultancy Services recently surveyed 1,217 companies in nine countries in four regions of the world including the US,Europe, Asia-Pacific and Latin America. Of these companies, a little more than half (643) said they had undertaken Big Data initiatives in 2012. 

 

Selected Key Findings from the Survey:

1. About half of the firms surveyed are using Big Data, and many of them projected big returns for 2012. 53% of the 1,217 firms surveyed had undertaken Big Data initiatives in 2012, and of those 643 companies, 43% predicted a return on investment (ROI) of more than 25%. About a quarter (24%) either had a negative return or or could not identify what the return was. 

 

2. There’s a polarity in spending on Big Data, with a minority of companies spending massive amounts and a larger number spending very little.Some 15% of the companies with Big Data initiatives spent at least $100 million per company on them last year, and 7% invested at least $500 million. In contrast, nearly one-quarter (24%) spent less than $2.5 million apiece. This has resulted in a big spread between median ($10 million) and mean spending per company ($88 million). Industries spending the most are telecommunications, travel-related, high tech, and banking; life sciences, retail, and energy or resources companies spend the least.

3. Big Data investments are geared toward generating and maintaining revenue. 55% of the spending goes to four business functions that generate and maintain revenue: sales (15.2%), marketing (15.0%), customer service (13.3%) and R&D/new product development (11.3%). Less than half that amount (24%) goes to three non-revenue-producing functions: IT (11.1%), finance (7.7%), and HR (5.0%).

 

4. Nearly half the data (49%) used by Big Data systems is unstructured or semi-structured, while 51% is structured. The heavy use of unstructered data is amazing given that just a few years ago it was nearly zero. On another dimension of comparison, about 70% of the data is from internal sources rather than external. However, using external and unstructured data has outsized impacts. Companies that expect much bigger ROI on Big Data use more external and unstructured data than do companies expecting lower or no ROI.

 

5. Companies that do more business on the Internet spend more on Big Data and project greater ROI. Companies that generate more than 75% of their revenue over the Internet spend about six times more on Big Data than do companies whose Internet business is 25% or less of total revenue. These Internet-centric companies also projected an ROI on Big Data (88%) that was nearly three times that of the less Internet-centric companies. Furthermore, the depth of the behavioral data that Internet-centric companies gather on their online customers gives them proprietary insights for developing superior new products and services, as companies such as Procter & Gamble Co. and Netflix Inc. have found.

 

 

Original author: Bill

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