By Drew Robb, Contributor
Everyone’s talking about big data and analytics and how they can transform business. But what if you’re a small or midsized business? Is big data an option for companies that may not have the financial and computing resources of a large enterprise?
Charles Caldwell, director of solutions engineering at Logi Analytics, answers an emphatic yes. Caldwell directs SMBs to use cloud computing to gain affordable entry into the big data world. He said that businesses may adopt a more surgical approach, using big data and analytics to solve specific problems, and then scale up to tackle larger projects.
Other experts share Caldwell’s perspective. Finding ways to use big data and analytics has become a bigger concern for small and mid-sized businesses who are looking for ways keep up with larger competitors.
Caldwell says that these types of companies can then keep costs low by turning off cloud service when they don’t need it. That way, companies don’t have to make significant hardware purchases. Furthermore, they can download open-source software tools for big data and analytics as an additional way to reduce the price tag.
“SMBs can’t afford the ’let’s just build a data lake, store everything, then figure it out later’ model that some enterprises are taking,” says Caldwell. “They need to focus in on solving an analytic problem that has very real potential business value.”
He stressed that businesses have to know what problem they want to solve. If they don’t have a good sense of what questions yield significant value for their business, they can’t expect big data to magically provide solutions. “That ’accidental discovery’ promise of big data, advanced analytics or anything else is largely snake oil,” says Caldwell. “Find a problem worth solving, then get the tools to solve it, not the other way around.”
Amazon’s Elastic Compute Cloud (EC2) utility compute model, he added, is a good way to experiment inexpensively. This allows SMBs to rent as many cloud resources as they require for short periods of time.
Fred Shilmover, CEO and co-founder of InsightSquared, agrees that SMBs would be best served by finding a service provider for cloud-based big data resources. His take, though, is to find one that has your specific interests as an SMB in mind. For example, Intuit has QuickBooks products that are moving into the big data world by comparing pricing and sales data between its customers.
“Intuit figured out how to leverage its internal data team for their customers, when those companies couldn’t gather enough data on their own to understand the bigger trends,” says Shilmover. ”Those customers can now benchmark their costs against each other and understand if they’re overpaying for supplies and services.”
Other data is doing similar things. Constant Contact offers big data-based benchmarks to help marketers optimize their campaigns. InsightSquared is releasing benchmarking reports on performance for sales teams.
“One of the best uses of data analytics is to dive into your own real-time data — about your sales processes and marketing campaigns — to find the bottlenecks that are stopping you from operating at your peak,” says Shilmover. “It’s about using that data to predict future results based on past experiences and adapting to your advantage.”
At a very basic level, tools such as Google Analytics can be an easy place to start. This enables SMBs to analyze where visitors are coming from and what activities they perform. They can then compare historical results and understand what marketing channels are growing or shrinking and then allocate resources.
The Hadoop effect
Marius Moscovici, CEO of Metric Insights, tells all but highly IT-centric SMBs to avoid Hadoop, which has been the traditional home for many big data projects. Hadoop is an open-source approach to the storage and processing of large amounts of data using commodity hardware. But Hadoop can get technical, and many SMBs don’t have the internal know-how to easily implement it.
“A lot of us equate big data with huge Hadoop projects, when in reality it can mean anything from ad performance statistics to customer response rates,” says Moscovici. “Two simple places to start are marketing and customer service, where lightweight tools exist that can plug in and analyze results.”
Not all businesses share Moscovici’s concerns.
Still, his view is that even a smaller company can be highly data-driven if users regularly consult the lightweight/open-source tools that measure everything from sales results to inventory.
“You don’t want to be left behind if all of your competitors are using analytics to find new opportunities,” says Moscovici. “We ourselves are a small data-driven company, and use a number of tools to gain insights such as Google Analytics, Salesforce and HubSpot.”