Bangalore: Indian companies including Bharti Airtel Ltd, the country’s largest phone company, and HDFC Bank Ltd are evaluating ways to make sense of massive amounts of data captured by their information technology (IT) systems as they seek to tap newer revenue streams based on real-time insights on customers and markets.
With nearly half the country’s top firms sitting on data that go beyond 100 terabytes in size (one terabyte of recorded audio equals around 2,000 hours), chief information officers, analysts and technology vendors are pushing for so-called Big Data solutions.
Big Data refers to a collection of data sets, or chunks of information, too large and complex to be processed using traditional software tools. By applying Big Data solutions, enterprises such as Bharti Airtel are looking to sift through massive amounts of information about users, analyse usage patterns on a real-time basis, and prepare personalized campaigns that can potentially increase revenue per user. Apart from exploring untapped revenue opportunities, firms can also make use of Big Data insights to cut costs and boost profit.
Globally, firms such as Wal-Mart Stores Inc., the world’s largest retailer, are using Big Data solutions to combine insights about the economy, sales, weather forecasts and so on, and fine tune their strategies accordingly. Indian firms are yet to reach this level of sophistication, but some are beginning to get more ambitious.
“It’s an extension of analytics and the next journey from our perspective when it comes to data storage. It’s about the quantum of data and the velocity at which you have to process it,” said Amrita Gangotra, director of IT, Bharti Airtel (India and South Asia).
Bharti Airtel handles around eight billion calls every day, generating petabytes (1,000 terabytes) of data to be analysed to identify new revenue opportunities and comply with regulations that make it mandatory to store call and text logs for months.
“Now the government is asking phone firms to keep records of even missed calls for six months to several years,” said Anil Valluri, president of storage vendor NetApp Inc.’s India and SAARC (South Asian Association for Regional Cooperation) operations.
NetApp is not the only vendor offering Big Data solutions. International Business Machines Corp., EMC Corp. and Microsoft Corp. are among top technology firms attempting to woo Indian enterprises with their solutions. Last year, General Electric Co. said it will invest $1 billion (around Rs.5,500 crore) in a new software facility in Silicon Valley that will only focus on Big Data. The market for Big Data in India, at $58.4 million in 2011, is still small, and will grow at 37.8% a year to reach $153.1 million in 2014, according to a study titled Here comes Big Data: perspectives from Indian enterprises by technology research firm IDC. The study was commissioned by the Indian subsidiary of NetApp.
Unlike data analytics solutions in the past, Big Data helps analyse information as it arrives, enterprise users such as Gangotra of Bharti Airtel said.
“The next step for us is to target customers on a much more real time basis. We could be offering a relevant ad on our website depending on who is browsing the website at a point in time,” said Gangotra.
A Harvard Business Review article published this month said despite the hype, senior leaders are right in paying attention to Big Data. The article quoted research by Andrew McAfee and Erik Brynjolfsson of the Massachusetts Institute of Technology, according to which companies that inject Big Data and analytics into their operations show productivity rates and profitability that are 5% to 6% higher than those of peers.
To be sure, managing information and data about customers and markets is not entirely a new phenomenon. Until few years ago, banks such as HDFC Bank, and retailers including Shoppers Stop Ltd were using software tools to analyse data captured on customers and use that to tweak business models and even launch new campaigns.
What’s changed from then is the massive amounts of data captured from not just the point of sales but from sources that go beyond traditional channels. These include social media platforms, mobile feeds and even websites managed by the firms. About a third of Indian enterprises surveyed by IDC said they expected data volumes to grow by over 60% a year.
According to the IDC study, Indian enterprises face challenges in managing unstructured, raw data that keeps piling up in gigabytes. This delays decision making and identifying new business opportunities in time.
Banks, too, are looking at ways to make sense of their corporate data.
“Technology industry is never short on jargons and hypes, but Big Data appears to have come out of business needs and not a term invented by technology,” said an official at a large Indian public-sector bank, who spoke on condition that neither he nor his bank be named. “We are currently evaluating vendors who can offer data solutions to help us launch new products across different consumer segments, almost on the fly.” His bank competes with more aggressive private sector rivals in attracting business from rich individuals.
Although rewards far outweigh risks in deploying Big Data, there are lessons to learn from past misadventures.
In the early to mid nineties, many enterprises made a bet on customer relationship management software, hoping to see a rise in sales and profits. Many such initiatives failed because they were not implemented in sync with the company’s processes and decision-making norms. Given its strong linkages with business, Big Data needs to be focusing on revenue opportunities from day one.
“No matter how granular the approach is, enterprises must think of generating revenues from this. And you need business sponsors from functions of marketing, etc., to drive Big Data,” said Gangotra.
Beyond business, there are other compulsions forcing firms to invest in sophisticated solutions.
“You like it or not, data is going to grow and, in many cases, the data is going to outlive you. Companies are storing data even after an employee has quit and now we are talking about average data lifespan of 70-80 years,” said Valluri of NetApp.
A bigger challenge for enterprises is what’s called unstructured data, which is basically chunks of unclassified and uncategorized information.
“This unstructured data is in all kinds of form such as image files, audio, video and newer formats like Flash,” said Valluri. Governments and intelligence officials attempting to scan cities on a real time basis to curb terrorism are the latest to make a business case for Big Data, according to Valluri.
“There’s a huge procurement going for Mumbai for real time video surveillance involving storage and extraction of thousands of images, videos on an on demand basis. There’s no way you can do this without Big Data,” said Valluri.