Data Revolution. Michael Toedt

where we are right now:

      Big Data is among the few things humans have created, but do not truly understand. It is at intangible and constantly changing, growing, and getting more complex with each passing second. It is a source of tremendous good and potentially dreadful evil, we are just beginning to witness on the world stage.¹

      When we talk about Big Data, we talk about the steadily increasing volume of data and the opportunities, which comes with it. Critics say that Big Data is not a new topic, but only a new and trendy marketing term created by software and consulting companies. The press is full of articles and everyone talks about it. Especially since Edward Snowden Big Data has become a topic with a negative connotation. Snowden used to work for Booz Allen Hamilton, a consulting firm hired by the US National Security Agency (NSA). In June 2013, he disclosed thousands of classified documents that he acquired as an insider working for the NSA. The release of confidential NSA material was the most significant leak in US history.² The basis for Snowden’s release was the fact that after 9/11 the NSA had started to collect data from almost everywhere. The data volumes and sources as well as the possibilities made people and governments all over the world feel insecure, and have resulted in worldwide protests against the NSA and the US government.

      Since Snowden has been in the news over months Big Data has become the talk of the town. Hearing about the practices of intelligence services around the world, people started to question what companies can do with data and how this may change our lives in the future. Big Data has become a buzzword and many people talk about it without knowing much about it.

       Figure 1: Google Searches on „Big Data“³

      Companies have always collected data, but a lot has changed including the pace with which data is generated and collected, and the vast number of sources where data can be pulled from. Our life has become digital and without even knowing we leave our digital footprints everywhere we go. These facts have led to an exponential growth of data in the past years. The basis of Big Data is the amount of data available and the possibilities that come with it.

      The technological achievements of the last decades have built the foundation for the current revolution. The development of powerful database management systems and network capabilities, decreasing costs for hardware, software and storage, the triumphant success of the Internet and its evolution through social media are responsible for the current changes. In addition to Facebook and other social media platforms, mainly the launch of the iPhone in 2007 has led to the explosion of data. The Steve Jobs and Apple achieved to revolutionariz the mobile phone market. From a more or less unemotional device with no additional functions, the mobile phone has turned into a status symbol with multi-media functions providing Internet access everywhere and at any time. This connectivity enables to collect and to use data.

      Worldwide, about 1. 8 billion mobile phones have been sold in 2013, 53% of which, and growing, were Smart Phones.⁴ Today, even the youngest in our society - 80% of the ten to thirteen year olds and still 33% of the six to nine year olds - possess a mobile phone. It has become normal to grow up with a smart phone and a computer. No wonder that 82% of the kids under 13 are computer-savvy and almost 60% use the Internet on a daily basis.⁵

      The triumphant success of smart phones led to the creation of billions of mobile applications, which cater to the users’ needs and provide for entertainment for all situations. The small programs are just a fingertip away and are available for almost all aspects of life. The side effect is, however, that they track and store everything the user does. Many apps are free, but actually, the user pays a price, just in a different currency. The currency is data and the price is the amount of data the app collects. The provider uses the data to learn about the user, a knowledge he will try to capitalize on in the future.

      In 2012, Facebook took over Instagram a photo sharing and social media community with 30 million users at the time. The purchase price was about $1 billion,⁶ a ridiculous amount for a company with only 13 employees. In addition to the unique functionalities of Instagram, the motivation of Facebook for the take-over was probably a different one and most likely had something to do with the data Instagram collects with each transaction by a community member. With each picture taken the GPS coordinates and further data including date, time, and the name and type of the device with which the photo was taken, are collected. The GPS tracking tool shows on a map where the picture was taken, which is a nice and helpful feature for users.

      Where this can lead to shows the following example. In summer 2014, during the Ukraine crises, however, the Russian government was at a loss to explain the following. Alexander Sotkin, a Russian soldier, took several selfies and posted them on Instragram. Against the firm assureances of Russian politicians that no Russian soldiers supported the separatists in the East-Ukraine, the map view on Instragram clearly showed that the pictures were taken on Ukraine territory.

       Figure 2: Russion Soldiers in the East Ukraine reveiled by Instragram⁷

      This example shows that some features have the potential of being more than just a technical gimmick. The GPS coordinates of pictures taken can be used for instance to gain a deeper insight into the travel habits and movement patterns of the users. This knowledge is extremely valuable for targeted communication and marketing activities. Marketing managers are willing to pay a fortune for this data, as it enables them to offer their products and services at the right time and at the right place to a relevant micro-segemented audience. The collection of data brings them closer to fulfilling this ultimate goal of marketing.

      

Big Data – a game changer

      Is Big Data just a hype? This question is raised in almost every panel discuission. The clear answer is no. Big Data is a revolution, which comes with the massive collection of data in all life situations. The numbers are impressive and every manager should realize that a big change is happening. The question every manager needs to answer sooner or later is how he can drive value from Big Data, and what it means for him, his skills, his job, and his life?

       Figure 3: What happens today?⁸

      The figure above indicates what is happening around us on a single day in July 2014. Almost 3 billion internet users were online, 95 billion emails were sent, 1. 6 million blogs were written and 292 million Tweets were sent. This, however, just reflects a very small portion of the overall data volume.

      Every year, the volume of digital data increases by 35-50%. Companies process about 1,000 times more data than a decade ago.⁹ Every two days as much digital data content as from the beginning of civilization until 2003 is created.¹⁰ According to a McKinsey study, companies with over 1,000 employees store on average 235 terabytes of data¹¹. One terabyte equals 1,024 gigabyte. Since bytes are abstract to many people, the following numbers put it into the right perspective. In 2000, about 25% of all information worldwide was available digitally; this number had soared to almost 98% in 2013. ¹²

      

The Volume of Data is Increasing by 35-50% Per Year

      In January 2014, Facebook, one of the main social media players, counted approx. 27 million users in Germany, compared to approx. 5 million four years earlier. ¹³ Overall, Facebook had 1. 23 billion users worldwide with a daily activity ratio of 62%.¹⁴ These users create about 2. 5 billion pieces of content, 2. 7 billion “Likes”, and 300 million pictures every day.¹⁵ And these are only the numbers for one single source!

      

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