Big Data Analytics may sound like it belongs to the domain of large enterprises. In reality, there is a huge untapped market that is set to take off in a big way.
By Stephen Chin
Mention “Big Data Analytics” or BDA and many would think it belongs to the world of large enterprises with deep pockets to run powerful computers that can crunch vast amounts of data to produce reports that tell them how to be more successful. Given that a large number of Malaysian businesses fall under the category of small-to-medium enterprises (SMEs), it would appear to be a tough sell.
Collecting and analysing information to get value from it is not new, though. Managers would analyse sales figures to identify monthly or seasonal trends and plan their orders accordingly. They would measure staff productivity to determine who gets a raise, or who should be fired.
The level of IT adoption among SMEs is low and those that do basically run standalone packages for inventory, accounts, payroll and customer relationship management. These are most likely run on a humble spreadsheet or simple relational database application. For a period of time, that may seem adequate but technology has grown in leaps and bounds.
BDA introduced speed and efficiency to the process. Artificial intelligence, cognitive computing and machine learning give computers the ability to analyse large amounts of data from multiple sources, including data from semi-structured and unstructured formats, such as email and text messages, survey responses, Internet clickstream data, web server logs, social media content, mobile phone call details, mobile phone app performance, and machine data captured by sensors connected to the Internet of Things (IoT).
Hidden patterns and correlations
BDA can uncover hidden patterns and unknown correlations, discern market trends and customer preferences, and make predictions of customer behaviour. They can learn, recognise and understand regular speech.
Websites such as Lazada, Netflix and Amazon can offer recommendations based on past browsing history or purchases. Companies like Google and Facebook can learn from a person’s web browsing, search history and so forth to build a picture of the user, his habits and preferences. They can tell what types of products, services and websites will interest the person, among others.
A study by the University of Cambridge and Stanford found that by analysing just 10 likes on Facebook, the computer can predict a subject’s personality more accurately than a work colleague. With 70 likes, it could know more about someone than their friends; 150 likes, more than a family member; 300 likes, more than a spouse! The researchers did say the average Facebook user has about 227 likes.
Data has become a valuable commodity that can be mined to derive more business intelligence. It can be used to determine trends and even make predictions, all of which can be used by businesses to gain a competitive advantage.
Imagine knowing what customers are looking for before they are even aware of it. You can tailor a product or service to suit that need, and direct your promotions to capture that market at the right moment when demand peaks.
If you are a restaurant operator and you detect a trend towards a certain type of cuisine – perhaps fusion is going out of fashion; authentic food from a particular culture or country is gaining popularity – you can redesign your menu to suit this burgeoning demand.
The sheer amount of data for such analysis, stored in various formats and types, is too much for the humble desktop, no matter how powerful Intel or AMD may push their processors.
Cloud is the leveller
If Big Data remains the domain of large corporations, SMEs may still have to get by with the traditional PC and Office suite of applications. However, cloud computing is levelling the playing field. They can handle large volumes of structured and unstructured data, and run analytics to produce “actionable data,” as tech companies love to say.
They charge on a per-use or subscription basis and can be accessed through a variety of devices, including mobile phones.
This spells trouble for IT resellers who continue to push hardware boxes or sell standalone software packages at rapidly diminishing margins. Research firm IDC estimates an increasing number of organisations moving to the cloud. In IDC’s Asia Pacific Software Study 2016, 42% of Malaysian respondents are planning to deploy cloud-based analytics software in the next one-to-two years, and some have already deployed some form of analytics solutions.
“The adoption rate of BDA technology among Malaysian organisations is increasing as organisations begin to realise that operations and customer-related data are crucial in their strategic business decision-making,” said Ng Quan Xiong, associate market analyst, software team, IDC Malaysia. “An increasingly competitive market landscape is also pushing Malaysian companies to seek intelligent solutions to increase efficiency and understand customers’ spending behaviour.”
The IDC report reflects trends among larger corporations. As SMEs embrace digital transformation and start doing more business online, through marketplaces and websites, they may skip over the traditional phase of buying desktops loaded with office productivity software suites altogether and go straight to cloud.
IDC defines BDA as a new generation of technologies and architectures designed to economically extract value from very large volumes of a wide variety of data by enabling high-velocity capture, discovery, and analysis. To “economically extract value” is a proposition offered by the cloud and its pay-per-use subscription model.
“The purpose of BDA is to discover insights and irregularities, and to enhance the understanding of business performance and customer behaviour,” said Sumash Singh, director, datacentre solutions, South Asia & Korea, Dell EMC. If organisations can gather, analyse and act on data insights in near real-time, they can help business outcomes, improve competitive advantage, enhance financial decisions and develop more concise projections, he explained.
“Organisations are facing competitive pressures because they are being outmanoeuvred by more nimble and innovative competitors. Businesses need to differentiate themselves in the market,” he said.
“Many organisations are also struggling with how to extract business value from all their data: new revenue opportunities and improving customer engagement,” Sumash added. “They are often stymied by technical obstacles.
“Dell EMC’s Analytic Insights Module is engineered to combine self-service data analytics with cloud-native application development into a single cloud platform. Organisations can rapidly gather, analyse and transform data into actionable insights with high business value in days or weeks instead of months,” he said.
Prospects for traditional technology vendors look bleak, going by trends in the US and Europe. In an AlphaWise/Morgan Stanley CIO report, 46% of CIOs expected their workloads to be in the cloud by end-2020 while only 34% will be on-premises. The US and European CIOs surveyed said they will decrease spending on IBM by 13% and Oracle by 11%.
Forrester Research goes further to say that companies that move BDA into the cloud will gain a competitive advantage over those that do not. Its report “Move Your Big Data Into the Public Cloud” authored by Brian Hopkins, Srividya Sridharan, John Rymer, Boris Evelson, Dave Bartoletti and Christian Austin has a simple message: join in or get left behind.
The report said the usefulness of BDA in the cloud will accelerate as cost goes down and analytical power increases. By 2020, companies that do not leverage the public cloud for BDA will have difficulty catching up. “You must immediately shift your big data investment from on-premises or hybrid toward public cloud,” it urged, arguing that capital expenditures for on-premises will lock big data users in, making them less flexible to respond to change.
Internal staff will have trouble keeping pace with unpredictable change requirements that keep popping up, it said. Furthermore, the staff’s skillset will limit the adoption or recognition of new technology that comes along. Promising technologies are unlikely to be adopted at scale fast enough, it added.
Forrester said companies such as Amazon Web Services (AWS), Google Cloud Platform (GCP), IBM and Salesforce will continue to invest heavily in big data and rapidly expand their services in competition with one another. Each successful new system in the public cloud will be leveraged by others.
The total cost of ownership in the public cloud may be high over a five-to-10-year period, the authors said, but competition will keep slashing prices every few years. The shift will appear slow initially and companies may think they have time to react. This will quickly accelerate like a runaway train. “As costs drop and power doubles, the unprepared get left behind,” they said. “This is the basic plot of every disruption story ever told.”
Thrivers and survivors
IDC’s Ng remarked, “Traditional businesses in Malaysia are generally more risk-averse and prefer not to be a first mover with new technology. They tend to refer to their regional peers’ approach and implementation before committing to similar initiatives.
“However in the last year or so, we see a growing number of local enterprises that are quickly realising the necessity of adopting emerging technologies such as analytics and cognitive computing. In IDC, we call them ‘Thrivers,’ who desire to take leadership and help govern and work actively to take advantage of emerging technologies to gain a competitive advantage. The others, ‘Survivors,’ are companies that remain reactive, waiting for complexity to increase and let natural selection weed out bad solutions from good ones.
“We believe Malaysia has reached an inflection point where Thrivers will increase dramatically as traditional strategies are no longer relevant in sustaining revenues, profitability and customer interest. Industries such as manufacturing, public sector, telco, financial services, and oil & gas are already looking at analytics to improve production efficiency, understand customer behaviour and provide higher quality customer service.
“One of the main challenges organisations face in adopting BDA is understanding ‘how’ and ‘what’ needs to be done to embark on the journey. Organisations do have an abundance of data but face difficulty trying to monetise it,” Ng said.
As a reseller, you can be a Thriver and adopt BDA to strategically enhance your business, and you can also be a player in providing BDA-related products and services. The first step is to determine what value you want to extract from your data.
Do you want to improve your operations efficiency and optimise staff productivity? Do you want to analyse what your visitors do when they come to your website – when do they usually log in, how long do they linger, what are they most likely to click on? What other products are they likely to click on? What products can you suggest that may be of interest to them? Are your customers satisfied with the delivery service and time to deliver? Are your promotions and advertisements working?
Once you determined the value, find technology partners who can help you. This is also a good learning opportunity to get further insight on what else you can do with business analytics – your experience will help you be a player down the line.
ASEAN BDA hub
The Malaysia Digital Economy Corporation (MDEC) launched the National Big Data Analytics Innovation Network in 2015 to accelerate BDA adoption in the country and make Malaysia a BDA hub in ASEAN. This will be accomplished by creating talent, driving case studies and setting up a regional platform to connect communities, enterprises, start-ups, academia and working professionals toward this goal.
The ASEAN Data Analytics Exchange (ADAX) was launched in March this year – the world’s first physical data exchange – to facilitate access to the BDA ecosystem, namely talent, funding, technology and support. ADAX will encourage companies to share their data.
Apart from creating training programs to help upskill and deepen the talent pool, ADAX will also have an innovation and showcase lab which accepts big data projects from companies, and an ASEAN data accelerator program in partnership with the Open Data Institute.
This is an opportunity for resellers and system integrators to reinvent themselves for BDA. By embracing and understanding how BDA can transform businesses, they can present best-fit solutions to their clients.
Resellers can find a niche in the ecosystem – be it the edge, core or cloud – and partner with vendors or distributors who are making a play in the respective areas. They can develop expertise in that field and dominate before it gets overcrowded.
By thinking “cloud” and BDA with every item they market and sell, they will not only add value to their clients but also find room to upsell and cross-sell. They can develop winning packages that suit the clients, from a newbie aspiring SME to a more established company looking to move up another level.
Dell EMC’s Sumash said Dell Technologies is the best positioned IT company to deliver technology across the full IT ecosystem, from edge to core to cloud. “We are also leaders in 15 Gartner Magic Quadrants – servers, storage, next-gen networking, virtualisation, cloud & hybrid cloud management, converged/hyper-converged infrastructure among others.
“That means resellers have a technology partner that can be No. 1 in everything that matters to the business digital transformation process in one place. Our partner community is absolutely essential to us. We want to build on their strengths by investing in their capabilities, equipping and incentivising them to sell across the full Dell EMC portfolio,” he said. “Our Partner Program is designed to not only equip them with the latest innovative technologies and support but also provide attractive rebates that reflect higher margins for selling a broader portfolio of solutions.”