When big data can lead to big profit

Li Min / China Daily

Businesses gear up to the need for deep analysis

It is hard to collect, analyze, store, search and visualize big data, but it is what everyone is talking about and something that companies and governments are finding is worth its weight in gold.

But what makes it a billion dollar business is its ability to sift the wheat from the chaff and provide the cutting-edge information vital for companies and governments to power ahead, analysts say.

Big data will be a key factor in competition and the growth of individual firms, says global consultancy major McKinsey & Co in a recent report, adding that it will be particularly relevant in areas such as productivity growth, innovation and consumer surplus, when someone is willing to pay more for a product than the market price.

Nowhere is big data more important than in China, the world's fastest-growing economy. With its huge population of more than 1.35 billion, rapidly expanding economy and increasing amount of Internet penetration, it is fast becoming a market that no company worth its salt can ignore. Chinese and overseas companies are now finding that having access to real-time insights with big data is more than handy for understanding fast-changing customer trends, says Miao Kaixiang, chief technology officer of the data center software division of Intel Corp. Big data is also a handy tool for governments because it helps to attract fresh investment and create more local jobs, says Miao.

In layman's, terms big data refers to the technologies used to collect, process, store, share and analyze huge volumes of data such as text, documents, videos and pictures.

Big data, however, differs from data mining and data-warehousing. While data mining is the process of discovering interesting patterns from previous data stored, it can handle only limited amounts and usually focuses on abnormal data or errors.

Data warehousing on the other hand refers to simple data storage and is more of a central repository of information from multiple sources. Data warehouses store current and historical data for further analysis through big data technology or data mining.

According to Miao, not too many people realize they are part of the big data generation process. Citing the example of a person searching online for a new smartphone, analysts say individual preferences and requirements are tracked by search engines and used for targeted advertising. Enterprises can also extrapolate big data to gain meaningful insights and chart successful market strategies.

Early birds

Although big data is still in its infancy in China, there are several early birds that have reaped the advantages. These include State-owned companies and some international firms, says Miao.

Nuclear power operator China Guangdong Nuclear Power Group (CNG) is one of the Chinese companies that has gained from the application of big data.

Li Chenglian, deputy director of CGN says that the clean energy maker had a problem on its hands when it found that it was facing a serious data overhang issue. "There were more than 20 subsidiaries of the group using various software and generating immense volumes of business data every year," he says.

"Most of these data were loose and unconnected and could not offer a unified view of the business to the top brass during the decision-making process."

Li says the whole process was nerve-wracking, time-consuming and expensive. But the company overcame that obstacle by using Microsoft SQL Server Master Data Services. "With this technology, we found that the group could easily share information with subsidiaries, which also improves employee efficiency and competitiveness."

Li says it also helped the group to have a centralized data warehouse, where with a push of a button, employees can access and analyze terabytes of data and generate customized reports within minutes.

US-based budget hotel operator Super 8 Worldwide is another company that is using Microsoft SQL Server 2012 to gain an advantage in China. "We can now better determine our long-term development strategy in China," says Joe Xu, senior vice-president of distribution at Super 8 Hotels (China) Co Ltd.

Xu says that with the budget hotel market in China growing rapidly, it was important for Super 8 to grow at the right pace and in the right locations and be ahead of the competition. "Big data has played a key role in our success," he says.

A recent survey conducted by global networking major Cisco Systems Inc among Chinese and overseas companies showed that more than 60 percent of the respondents believed big data is essential for businesses to improve decision-making. More than 90 percent of the respondents from China expressed their confidence in using big data.

Global market research firm International Data Corp estimates the amount of digital data, mostly in the form of unstructured data, will grow by 40 percent to 50 percent every year. According to the organization, by 2020, that total will reach 40 zettabytes (one zettabyte is a billion terabytes).

The Asia-Pacific (excluding Japan) big data technology and services market is expected to grow from $258.5 million in 2011 to $1.76 billion in 2016, on the back of a 46.8 percent five-year compound annual growth rate, data from IDC show.

Technology and market research company Forrester Research says that business intelligence estimates that big data projects will grow at 20 percent or more in the Asia-Pacific region over the next 24 to 36 months.