There has been a lot of reading recently about big data and how it will change our economy and society. A whole host of manufacturers of big data tools and big data consultants serve the large and increasingly medium-sized companies. They attract with the enormous economic potential that big data has – and hope for good business.
What is big data anyway?
But not everything that bears the label “big data” is also big data. Caution is required here – and a basic understanding of big data and its qualities is required. Big data is the possibility of gaining insights from the analysis of a large amount of data that cannot be obtained from a small amount of data.
Up until now, collecting and evaluating data has mostly been costly and time-consuming, with the result that companies have always tried to gain the most knowledge and thus the basis for their decisions from the smallest possible amount of data. Thanks to digital technology, this effort has decreased dramatically. The analysis of large amounts of data has now become possible, as has the storage and reserve of collected data.
Better predictions and more sales through big data
This allows a changed form of added value for companies. So far, they have been collecting data for a very specific purpose. Once this was reached, the collected data was deleted or stored. The data can be stored today and reused repeatedly for completely different, new purposes in the future.
This creates economic benefits without having to collect the data again. The German Lufthansa aircraft, for example, collect weather data for the autopilot during the flight. Until a few years ago, this data was simply forgotten.
But today they are collected and, after landing, forwarded to the German weather service, which was only able to improve its weather forecasts by 7 percent with this. Lufthansa also benefits from more precisely forecast flight weather. And the online provider Amazon has not only saved what customers have bought since the beginning, but also which products they have just viewed. With the help of big data, Amazon uses this to determine product recommendations, which today account for almost a third of sales. In both cases, data collected for one purpose is reused for an entirely different purpose for economic benefit.
Big data: the concrete benefits for SMEs
What is exciting for small and medium-sized companies is that big data cannot only be used by industry giants. Because no high investments are necessary for the use of big data. With cloud computing, storage and analysis capacity can be rented as required at low prices. In the USA this has already led to a veritable boom in big data startups.
The startup company Decide.com, for example, offers hundreds of thousands of its users an interesting service: The site predicts how the prices of tens of thousands of consumer goods will develop in the next few days and weeks, and thus helps people to choose the right time to buy. The service can predict price developments because it searches, collects and analyzes billions of price information on the Internet every day. The startup only has 30 employees and no hall full of servers and hard drives. It uses off-the-shelf big data tools and relies on cloud capacities.
The possibility of getting involved in the game of the big players is a special feature of big data that should give small and medium-sized companies in particular to think about. Big data offers a great opportunity for those who sit on unused databases or have a clever idea to reuse data in a clever way.
Even those who do not have enough data in their own company can try to license databases from other companies. Here, too, small and medium-sized companies sometimes have better cards, because large data collectors often prefer to give smaller providers access to their valuable databases than to open them to direct competitors.
So there are many reasons to take big data seriously and apply it. Do it.
The book on the topic: “Big Data: The Revolution That Will Change Our Lives.”