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Unlike other industries which can be easily organized – biotech investing falls under the life sciences umbrella, while app investing is exclusively part of technology investing – the data industry is not easily categorized. The data industry is of growing importance to almost all global markets, as companies search for more efficient ways to organize, understand, and apply the data.
Why do we need it?
In the digital age, almost every consumer interaction leaves a digital trace – retail receipts are kept, doctor’s visits recorded, and social media histories stored. It is difficult to grasp the enormity of these data collections. In an article on business opportunities in big data, Inc. cited McKinsey & Company’s finding that 15 (out of 17) sectors in the U.S. have more data stored per company than all of the U.S. Library of Congress. Companies require solutions for turning this backlog of data into a useable source of target information. Big data companies provide this service.
Defining “Big Data”
Big Data was originally used to describe datasets which exceeded the storage and organizational capabilities of traditional databases. Today, this term has expanded to not only refer to the data itself, but also the technologies which capture, store, manage and analyze large collections of data to gain insights into consumer behaviour, supply efficiency, and other essential aspects of business performance. According to Research and Markets’ “The Big Data Market 2-14-2020: Opportunities, Challenges, Strategies, Industry Verticals and Forecasts” report, the explosion of web, social media, mobile devices, sensors, log files and transactional applications has created a significant need for this sort of technological platform.
Market and Research estimated that Big Data investments will account for $30 billion in 2014 alone, and this number is expected to rise: they expect a 17% compound annual growth rate over the next six years.
The market research firm IDC agrees that the big data and services market is one of the fastest growing sectors in technology. IDC estimates that the industry will reach $41.5 billion in 2018, growing at a compound annual rate of 26.4%. To put this into perspective, that’s six times the growth rate of the information technology market as a whole.
How does it help companies?
The global management consulting firm Bain & Company’s report “Big Data: The organizational challenge” reveals the multitudes of ways that big data is benefiting organizations. Companies that incorporate big data technologies are twice as likely to use data frequently when making decisions.
This ability to effectively use data in decision making leads to a much more efficient company: these firms are are five times as likely to make faster decisions and three times as likely to execute decisions as intended. Ultimately, these organizations are twice as likely to be in the top quartile of financial performance within their industries.
The visible benefit that big data technology has upon organizational behaviours suggests that more companies will continue to adopt it, leading to even greater growth for the new data industry.