When big data can lead to big profit(2)

Real potential

Big data adoption plans by Chinese companies are fast gaining momentum, Forrester says, adding that the adoption rate is 21 percent, compared with 20 percent for Singapore and Indonesia and 19 percent for Malaysia. The same study estimates that big data business in China could touch 5 billion yuan ($806 million) by 2016.

The Internet industry holds most potential for big data companies, sources say.

By the end of 2012, China had 564 million netizens, 420 million of whom used mobile devices such as smartphones and tablet computers. Statistics provided by global technology firm Intel Corp shows that Taobao Marketplace, the biggest e-commerce platform in China, generates roughly 50 terabytes of data every day, while Baidu.com, the Chinese search engine, accounts for more than 6 billion searches and 1 exabyte of data daily. An exabyte is 10 to the power of 18 bytes.

Big data applications are also used in other industries such as finance, telecoms and even hospitals, where patient data can be stored and analyzed to hedge against possible risks and diseases.

China Mobile Ltd, a leading Chinese telecom operator, has already made a strong start in big data applications by using Intel devices and solutions to locate call histories. The telecoms operator says it can now trace any specific call history within 40 seconds and at sharply reduced costs.

Financial institutions bank on big data to expand their business and know more about potential clients.

Josephine Kwan, an asset management expert and partner at PricewaterhouseCoopers, a multinational professional services firm, in Hong Kong, says big data can help asset managers to communicate more with their investors.

"Via big data, asset managers can collect accurate and timely data for further information about their investors and make tailored investment plans," Kwan says.

"CEOs will need to maintain or increase investment in technology and data management to maximize distribution opportunities or to benefit from new opportunities offered by social networks," she says.

Prakash Sundaresan, chief technology officer of Microsoft Asia-Pacific Research and Development Group, says the potential for insights from data to affect the decisions companies make can be profound and widespread.

"Some industry observers predict a 20 percent growth in revenue and earnings for companies that use big data compared with those who don't," he says.

"Big data is not just about buying databases and software. It is also about how to use it commercially to grow the business," says Phillip Beniac, regional vice-president of QlikView, a Pennsylvania company that provides big data services.

QlikView has about 27,000 customers worldwide, including King.com, the developer of Candy Crush, the popular smartphone game. King.com has more than 40 million players and more than 3 billion games played every month globally.

Beniac says that by using QlikView solutions and the Apache Hadoop-based big data system, King has been able to develop rapid insight into customer behavior. Apache Hadoop is an open-source software framework used for storage and major processing of hardware data and is one of the most preferred big data applications.

"We use QlikView for explorative purposes when the data extraction and the transformations are designed and verified from the big data," says Mats-Olov Eriksson, director of data warehousing at King.com.

"The rise of Big Data has led businesses to believe that they need 'data scientists' to leverage this new raw material immediately," says Terry Smagh, vice-president, sales, for Southeast and North Asia at QlikView.

Big data should be understood as an emerging trend that encourages business users across an organization to analyze and make discoveries in the data through intuitive and exploratory technology, he says.

Data discovery helps all employees to make a more informed decision easily - employees, even without special skills, can spot anomalies and hidden relationships that have never been seen before, such as understanding user behavior more thoroughly, discovering new business models and improving competitive edges, Smagh says.

"The power of data discovery lies in its ability to liberate data via visualization as much as build a compelling story for business users," Beniac from QlikView says.

Head start

The US has a head start in data development. In March 2012, the Obama administration announced it was investing $200 million in big data projects to advance scientific research in areas such as healthcare, energy and the environment. In China, however, the concept is still in the early stages.

"While some leading-edge customers in China are using big data in production, most of the others are still in the trial stages. However, there is a huge interest in this technology and I expect rapid adoption in the coming years," says Sundaresan from Microsoft.

He says that although the big data theme is similar regardless of geography, there are some areas or aspects where China is different.

"One is the sheer scale of China in almost every market category, whether this be the number of Internet users, mobile minutes online, number of internet-capable devices, etc," he says.

"Most of the Chinese companies are not bound by legacy products or implementations because they are just beginning to explore this area and thus have more flexibility to implement futuristic systems."

But big data is an opportunity and challenge for Chinese customers, he says.

Internet companies will definitely be the first to adopt the technology, while others are still evaluating the various scenarios. Sundaresan says that several big data scenarios are developing in specific industries, such as the "Internet of Vehicles" in the auto industry, regional solutions in the healthcare industry, and online-to-offline in the retail industry.

He adds that, although the technology is evolving rapidly, the key constraint is the lack of adequately trained talent. Data scientists are a relatively new talent pool facing a severe shortage.

Lei Jun, founder and CEO of Xiaomi, a popular smartphone manufacturer from China, is one of those concerned over privacy protection in the big data era. He wants Chinese policymakers to speed up legislation on information security.

Lei says China should put in place a sound mechanism to harness big data talent and funding for key research in the area. At the same time, it is also important for the various government arms to fully share their data so that social institutions can research it for better efficiency.