This article/post is from a third party website. The views expressed are that of the author.We atCapacity Building & Developmentmay not necessarily subscribe to it completely. The relevance & applicability of the content is limited to certain geographic zones.It is not universal.
TO VIEW MORE CONTENT ON THIS SUBJECT AND OTHER TOPICS, Please visitKNOWLEDGE-KORRIDOR our Virtual Library
Friday, January 9, 2015
Applications Drive The Biggest Money In Big Data 01-09
Applications Drive The Biggest Money In Big Data
The real money in Big Data has nothing to do with selling Hadoop.
We're still fixating on all the wrong Big Data startups. Hortonworks, one of the primary companies behind Hadoop, recently went public to great fanfare and a $1.2 billion valuation. But Hortonworks and the rest of the so-called Big Data startups are actually some of the least interesting Big Data companies.
In fact, of the current crop of 40 startups valued at more than $1 billion, virtually none of them sell Big Data technology like Hadoop. But all of them make heavy use of data - lots of it - to deliver a wide array of services.
As consultantPeter Goldmacher declaredback in 2013, the biggest winners in Big Data are the "business people that have identified opportunities to use data to create new opportunities or disrupt legacy business models." As we enter 2015, expect to see data double the number of billion-dollar startups even as public companies learn to grow through data, as well.
Do-It-Yourself Software Loses Its Luster
It used to be enough for a vendor to ship software and abandon the customer to figure it out (or pay hefty sums of money in consulting fees). SAP, for example, has made billions in revenue by shipping complex software and having customers shell out multiples of the software license fee for high-priced consultants to make sense of its Byzantine software.
That sort of strategy doesn't work very well anymore.
Forget startups for a moment. If we look at the stock prices of various data-related companies, investors are paying a premium for companies like Tableau and Qlik that make data easy to consume:
The companies rising the most include Tableau, Qlik and MicroStrategy, which provide tools to visualize data, while companies that tend to sell infrastructure like IBM and Teradata largely skidded through the year. (In fact, IBM is on its second year as one of the Dow Jones worst performers.)
Data Begets Billions
The analysis isn't perfect, of course. For example, though IBM sells a lot of core infrastructure it also has a Business Intelligence business. Oracle, for its part, plays in many camps, with a strong applications business to make up for its stalling database business.
But where the shift to Big Data really becomes apparent is in the Wall Street Journal's burgeoning billion-dollar startup club. As the Journal's Christopher Mims points out, "2014 was the year tech startup valuations went on a tear without precedent."
It was also the year that tech startups put data to use at unprecedented levels.
No, not in the old-school Big Data way. When you review most lists of the "top 10 Big Data companies" they focus on those that sell Big Data technology. Among the top-15 most valuable startups, only Cloudera (and maybe Palantir) counts as a Big Data startup in this old sense of the word.
Comb through the rest of the top-40 most valuable startups and you add MongoDB and Good Data. At face value this seems to suggest that Big Data really isn't that big of a deal.
Back to Goldmacher.
In Goldmacher's world, the "Big winners" in Big Data are "infrastructure providers like the Hadoop vendors and the NoSQL vendors," the "Bigger winners" are "the Apps and Analytics vendors that abstract the complexity of working with very complicated underlying technologies into a user friendly front end."
There's An App For That
But the "Biggest winners," as noted above, are companies like Uber, Stripe and Airbnb that have figured out how to "leverage data as an asset," thereby up-ending old industries and setting themselves apart. Look through the list of the top-40 most valuable startups and nearly all of them have this in common: they understand and leverage Big Data.
As we enter 2015, data will become more important than ever. It won't, however, be easy to track, because there's no meaningful "Big Data" category of vendors. Instead, data will transform industries as diverse as retail and healthcare, crowning multitudes of billion-dollar startups and billion-dollar revenue streams along the way.