Do All Companies Really Need ‘Big Data’?

Big Data: It’s a term with a whole lot of hype behind it.

To hear some analysts tell it, every company larger than a few people in a garage will need a data-analytics capability of some sort. Data is the new oil, they insist—whatever that actually means. Any firm not loaded up with tools for slicing and dicing data (both structured and unstructured) risks extinction.

Sensing the market opportunity behind the hype, a number of IT firms are building new analytics tools—or adjusting their existing ones—to supposedly meet the needs of smaller clients. SAP, for example, markets its HANA in-memory solution toward small and midsize businesses that need to power applications and analyze huge datasets; its rivals, including Salesforce and a host of startups, offer software (much of it cloud-based) that can do everything from sentiment analysis to data visualization.

For those with massive datasets to crunch, there are platforms such as Apache Hadoop, which is enjoying something of a Renaissance—some would say a grievously overinflated market bubble—at the moment. Meanwhile, companies with data-analytics needs bordering on the truly epic, such as Facebook, have begun developing their own custom frameworks and other analytics software.

But do smaller firms necessarily need that sort of data-crunching firepower? The short answer is no. Sentiment and social-networking analytics are invaluable to companies of any size—take a gander at what all sorts of enterprises big and small are doing with Twitter data these days—and apps that break down sales and customer data (of which there are many) can always find a use. Visualizations are great for meetings, and mobile-data apps are perfect when most of one’s salespeople are on the road.

For all the usefulness of those tools, many smaller businesses—your local liquor store, say, or a startup gaming developer that sells just enough units on Apple’s App Store to keep the lights running—don’t have a need for heavy-duty “Big Data” platforms. But that won’t stop the larger IT firms from doing their level best to sell them on the concept—in the quarters immediately following the 2008 crash, for example, companies such as SAP threw lots of resources at targeting small and midsize businesses, trying to make up for severely weakened margins. Still, small firms should seriously consider whether to buy into the hype.


Image: joreks/