Why is there a huge buzz around Analytics today though the field has been there for decades?
Price discrimination and downward demand spiral are widely used analytical concepts/practices long before the term Big Data Analytics was even coined. So, how come Analytics, which has been there in practice for decades experience a meteoric rise suddenly?
To answer this question, we need to get the 'Big Picture'. Given below are key factors that have led to the huge buzz around analytics today.
- Proliferation of Data Sources – Every day we create 5 quintillion bytes of data. This comes from digital footprints left on social media platforms, IoT sensors, wearables, transactions to name a few. The interesting fact is that only 1% of data collected is ever analyzed. To put into perspective all that innovation and insights driven by analytics are from analyzing just 1% of the data collected globally.
- Change in Customers’ expectations – Today connected customers expect personalized service on-demand based on their digital journey and personal preferences anytime, anywhere and on any device. Google’s context-aware search engine results, AI powered personal assistants from Google and Apple, Amazon’s recommendation engine have all made today’s unforgiving connected customers to expect the same level of customer experience from all brands they interact with.
- “Race to Zero” by Cloud Computing giants – The cloud computing price war between Amazon’s AWS, Google and Microsoft dubbed “race to zero” is well known. By late 2016, AWS has already made 52 price reductions and more price cuts are expected.
- Advent of Hadoop – Hadoop, open source distributed filesystem with framework for data analysis and transformation with high fault tolerance and reliability has broken barriers to entry for start-ups and significant cost reductions for enterprises like Yahoo Inc., whose Hadoop clusters span 40,000 servers.
- Every company is a technology company – Today every company is a technology company. One prominent example is how Domino’s is turning more into a digital e-commerce player from a traditional quick service restaurant through its Domino’s AnyWare As part of the program Domino’s collects data from 85,000 different customer touchpoints, to derive insights and drive growth. As a result, Domino’s was able to process about 55% of its orders online.
- Urge to join the ‘Big Data Analytics’ bandwagon – Media is inundated with Analysts reports with impressive projected and actual CAGR of Big Data Analytics investment, and reports on how data-driven insights helped enterprises solve real-life business problems and drive growth. This has pushed Top Management of many Enterprises to jump the Big Data Analytics bandwagon, before it’s too late.
Open source distributed platform coupled with massively discounted storage & compute costs (cloud) have given Start-ups equal footing with Enterprises in developing and launching innovative products leveraging Big Data and Analytics, which was possible only by firms with deep pockets until few years ago. On the other hand, heightened customers’ expectations have led to the digital transformation of Enterprises that target to replace instincts-driven decisions with insights-driven decisions. Both trends driven by factors mentioned earlier have led to the explosive growth of Big Data Analytics witnessed today.