Big data is a term that describes the large volume of data – both structured and unstructured – that inundates a business on a day-to-day basis. But it’s not the amount of data that’s important. It’s what organizations do with the data that matters. Big data can be analyzed for insights that lead to better decisions and strategic business moves.
While the term “big data” is relatively new, the act of gathering and storing large amounts of information for eventual analysis is ages old. The concept gained momentum in the early 2000s when industry analyst Doug Laney articulated the now-mainstream definition of big data as the three Vs:
Volume. Organizations collect data from a variety of sources, including business transactions, social media and information from sensor or machine-to-machine data. In the past, storing it would’ve been a problem – but new technologies (such as Hadoop) have eased the burden.
Velocity. Data streams in at an unprecedented speed and must be dealt with in a timely manner. RFID tags, sensors and smart metering are driving the need to deal with torrents of data in near-real time.
Variety. Data comes in all types of formats – from structured, numeric data in traditional databases to unstructured text documents, email, video, audio, stock ticker data and financial transactions.
At SAS, we consider two additional dimensions when it comes to big data:
Variability. In addition to the increasing velocities and varieties of data, data flows can be highly inconsistent with periodic peaks. Is something trending in social media? Daily, seasonal and event-triggered peak data loads can be challenging to manage. Even more so with unstructured data.
Why Is Big Data Important?
The importance of big data doesn’t revolve around how much data you have, but what you do with it. You can take data from any source and analyze it to find answers that enable 1) cost reductions, 2) time reductions, 3) new product development and optimized offerings, and 4) smart decision making. When you combine big data with high-powered analytics, you can accomplish business-related tasks such as:
- Determining root causes of failures, issues and defects in near-real time.
- Generating coupons at the point of sale based on the customer’s buying habits.
- Recalculating entire risk portfolios in minutes.
- Detecting fraudulent behavior before it affects your organization.