Explainer: Big Data
This is part of a series of broad explainers aimed at demystifying complex exponential technologies impacting the world and driving Fuel Venture Capital’s investment thesis and prospects.
Big data, the term used to describe large volumes of structured and unstructured data, is commonly referred to as the new oil or gold. The real gold mine, however, lies at the convergence of big data and data analytics, where big data is leveraged into actionable insights. Enterprises that recognize this, and act on it in a technologically, operationally and economically optimized way, will have a sustainable competitive advantage to outperform their peers.
Today, we are at an inflection point, where the sheer volume of data generated and stored and the application of data science has become not only economically relevant, but a growth driver for businesses, governments, and consumers. Market players need to learn how to collect, store, protect, integrate and quickly analyze the trillions of bytes of data collected daily to remain competitive. There are several ways big data creates enterprise level value through digitizing consumer interactions and internal processes. Big data increases enterprises agility by using analytics to support faster and more frequent changes to business strategies. The ability to view data through the lens of a multitude of variables and scenarios reveals patterns and trends that optimize operations and improves productivity increasing operational efficiencies and reduces costs through data-driven decision making, boosting enterprises performance. Finally, it allows for narrower segmentation of customers and therefore more tailored products and services.
The trends driving the growth of big data include the introduction of more tools to analyze big data, the increasing volume of rich and diverse data collected, datafication of previously unquantifiable data sets, the movement of data to the cloud, and technologicaladvances in computational power today. The proliferation of data through IoT devices coupled with the massive digital footprints generated by today’s smart devices and the rich sources of data available through 3rd party data vendors has led to the availability of a wealth of data. Powerful technologies such as Hadoop, NoSQL and Gephi have emerged to help process, filter and analyze data and pull from it actionable insights. However, as larger amounts of data is captured, regulation around information security along with the shortage of specialized talent in data analysis, organizational resistance, big data analysis tools poor ability to handle complexities, inconsistencies and uncertainty in the datasets are challenges that will have to be addressed.
As the big data paradigm takes hold, new tools, skill sets and models will be built to take advantage of the revolution in big data. With ongoing advances in AI, big data analytics is leveraging deep learning systems to enable a growing range of applications from autonomous vehicles to virtual assistants. The confluence of data, cloud storage, advanced algorithms, and enhanced computational power, has set the stage for a wave of creative disruption.
In the Fuel Venture Capital portfolio, four of our companies leverage big data. We will continue to seek companies that leverage data-driven strategies to innovate, compete, and capture value from real-time information to drive growth.
Jeremy On is a junior at Emory University, pursuing a degree in economics. He was part of Fuel Venture Capital’s Summer Intern Class of 2019.
