A new study from Teradata provides more evidence that the total addressable market for business analytics is essentially everybody. Certainly for larger organizations, the survey indicates that analyzing data can lead to a “significant, measurable impact on revenues,” said Teradata’s Chris Twogood, VP of Product and Services Marketing.
The clock is ticking, and America is currently losing the race, he added. “One of the biggest surprises for us… some of the international companies are getting more support from the C-suite than the North American companies.” Asia/Pacific was twice as ready to say big data and analytics are part of their competitive success, said Twogood.
Teradata wanted to know just where the business analytics market is, i.e. are there certain companies leading the way, different characteristics, and what are the implications, he said, explaining why the company worked with Forbes Insights and McKinsey on the survey of 316 senior data and IT decision-makers in ‘leading companies’. The key finding: “if you’re not engaged in big data analytics or you’re just toying around with it, you’re going to be outpaced by your competition.”
Over half of the respondents, 59%, consider big data and analytics either a top five issue or the single most important way to achieve a competitive advantage, and 90% report medium to high levels of investment, and about a third call their investment “very significant.”. Sandwiched between those two factoids was what I considered the most relevant finding: 66% report that big data and analytics initiatives have had a ‘significant, measurable impact on revenues.’ Teradata said the survey showed that big data is shaping the future and driving opportunities for innovation in three key areas: creating new business models (54%); discovering new product offers (52%); and monetizing data to external companies (40%).
So what’s the holdup? ‘Cultural, strategic and operational hurdles await those that tackle big data and analytics without a fleshed-out plan and executive support.’
According to the survey, the roadblocks include:
-just over half of respondents reveal that the idea of a data-driven strategy is not universally accepted in their organizations, citing adapting and refining a data-driven strategy as the single biggest cultural barrier;
-44% cite putting big data learning into action as an operational challenge; and,
-only 53% report that their companies’ big data and analytics capabilities are above par or best of breed; 33% consider themselves average, and only 6% say that they are underperforming compared with industry peers.
While democratizing the data, making it more accessible throughout the organization is important, Twogood said the survey demonstrated that C-level support is essential. “This is a call to action to the C-level… we have to become data-driven.”
In organizations where big data is viewed as the single most important way to gain a competitive advantage, 51% have CEOs who personally focus on big data initiatives. The survey concluded that companies that have established data and analytics positions at the CxO level are ‘more likely to have above-average data analytics capabilities.’
According to an April survey from Enterprise Strategy Group, a majority of organizations plan to increase spending this year on the applications, services, and infrastructure underlying big data initiatives, especially those larger in size and affiliated with the retail and health care verticals. Specifically, nearly two-thirds (64%) of enterprise organizations (i.e., 1,000 or more employees) expect to increase their technology spending in support of big data projects in 2015, compared with only 52% of their midmarket (100 to 999 employees) counterparts. Similarly, 67% of organizations with at least $50 million allocated for 2015 IT investments anticipate increased budget levels for BI/analytics products and services over the next 12 months as opposed to only 44% of those with less than $5 million earmarked for IT budgets.
ESG found that the marketplace is maturing rapidly and solutions that were previously seen as attractive to have but difficult to build are now becoming much easier for many organizations to achieve. ‘Organizations that can define a clear business case for how and why big data can add value will succeed, and vendors that can deliver solutions with superior economic considerations will gain mind—and ultimately market—share rapidly.’
A more recent study shows that the cloud analytics market is expected to grow from $7.5 billion in 2015 to $23.1B in 2020 at a CAGR of 25.1% during the forecast period. The cloud analytics market is broadly segmented by solution: cloud BI tools, hosted data warehouse solutions, complex event processing, enterprise information management, enterprise performance management, governance risk and compliance, and analytics solutions; and by deployment model: public cloud, private cloud, hybrid cloud, and community cloud.
Then there are the numbers Cisco is using to describe the growing analytics opportunity, fueled in part by the growing Internet of Things. IoT is going to be a $19 trillion business, and analytics will be a key component of that, according to Cisco chairman John Chambers: “$7.3 trillion of the $19 trillion is tied to data, analytics and data in motion.”
At last year’s annual data-focused conference Teradata President and CEO Mike Koehler said that companies that make data-driven decisions are more effective — 5% more productive and 6% more profitable. “The competitive battle field can be won or lost by analytics.”
“That’s enormous,” said Bob Fair, EVP and Chief Marketing and Information Officer, Teradata. “You can’t survive long if your competitors are beating you by 5-6% on the bottom line.”
If beating your competitors by 5-6% on the bottom line isn’t enough of an incentive, then Twogood offered this carrot/stick: “Frankly I think this is just scratching the surface”. Looking ahead, it’s important that customers understand that there are a number of core areas they need to focus on, including making it easier to consume big data throughout the organization and enabling a broader set of users to take advantage of that data.