Big Blue's Bet on Big Data

by Peter Cohan
This was originally published by Forbes.com on November 1st, 2012

International Business Machines (IBM) has three ways to profit from corporate and government spending on technology — services, hardware, and software. And thanks to Big Data, Big Blue is poised to use all three to add millions to its bottom line.

As he explained in an October 26 interview, Michael Schroeck, Global Information Management Leader, IBM Global Business Services, believes that IBM can help organizations using all three of those while tapping into a $64 billion market.

As the Mass Technology Leadership Council President, Tom Hopcroft, told me in a June 7 interview, all the definitions of Big Data seem united under the broad banner of the Three Vs:

• Volume. Big data involves the extraction of useful insight from volumes of data so large that traditional database tools cannot handle the workload. Hopcroft points out that in the last year, the amount of new data created is sufficient to fill 60 Libraries of Congress;
• Velocity. Data analysis used to be a so-called batch processing — managers got reports the morning after the day’s transactions. Now, managers need instant analysis so they can use the insights to make decisions when they can still influence business outcomes; and
• Variety. Old-style data came in neatly formatted rows and columns. Big Data includes that as well as Twitter feeds, Facebook (FB) posts, GPS data, road sensor signals, genomic data, and videos. Big data tools try to handle them all.

On October 17, IBM and Oxford’s Said School of Business published the results of a global big data survey of “more than 1,110 business and IT professionals in 95 countries.” A key finding of the survey is that “less than half” of the organizations surveyed collect and analyze data from social media.

One reason is they don’t know how to manage data uncertainty that goes hand in hand with information about ”weather, the economy, or the sentiment and truthfulness of people expressed on social networks.”

Not only do they not trust social media data, but organizations lack the skills required to analyze unstructured data that “does not fit in traditional databases such as text, sensor data, geospatial data, audio, images and video.”

But that means companies are ignoring a significant amount of data considering that “every 60 seconds, 600 new blog posts are published and 34,000 tweets are shared.” Moreover, the report stresses that a key benefit of Big Data is the ability to find the needle of customer insight in a haystack of meaningless social media chatter.

Nevertheless, more organizations believe that ”Big Data and analytics create a competitive advantage” for them. 37% said so in 2010 and 63% believe that now according to the survey.

Schroeck outlined many different organizations that are getting Big Data’s benefits. These include hospitals that use Big Data to monitor the health of premature babies in neonatal care wards of  and governments that intercept people seeking to harm the populace by analyzing videos and sensor signals.

And Forrester Research estimates that IBM has a big business in Big Data. It guesses that IBM has over 20,000 projects focused on business intelligence that generate over $2 billion in revenue. To deliver on those projects, Forrester estimates that IBM has 9,000 “business intelligence practitioners” with 4,000 to 5,000 Oracle (ORCL) and SAP business intelligence consultants.

It looks like Big Data is a great opportunity for IBM to use its capabilities to profit while helping organizations gain meaningful insight that can boost their market share.