Big Data is nothing new although it has gained popularity recently. A bank teller may offer you new services based on the transactions and balance in your account. At a casino, staff are trained to provide complementary drinks to high rollers. Big data has gained popularity recently because of several factors:
- Cost to capture, store and process data has come down
- Cloud computing has become popular concentrating data in large warehouses.
- Data mining tools like SAS and IBM's IPSS allow a business to find actionable results from the data
- The Long Tail effect means that consumers are demanding customized products and services
- Increasing competition and e-commerce is driving the need targeted advertising using big-data
I think Big Data will gain popularity in certain B2C areas like e-commerce, retail and services. Businesses like mine (I work at a casino gaming technology company) have high barriers to entry. We are a B2B business. I don't see Big Data coming to our world anytime soon. For several years now, we have been offering a Business Intelligence product for our clients that helps them analyze data from a casino's slot accounting system. But the data sources are limited, it is in no way 'big'.
Now, let's look at some of the practical drawbacks of using Big Data:
- Actionable patterns are hard to find
- It is expensive to target specific customers. Although email promotions and rewards memberships have made it easier.
- There are privacy concerns related to the kind of data you collect and store.
- By the time you react to the data and offer a promotion, it may be too late (customer might have finished making his purchase). This can be automated but challenges remain.
In conclusion, I think e-commerce and B2C companies will make investments in Big Data. The B2B world (outside e-commerce) might not take the big plunge anytime soon.
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