The engine behind big data is M2M—machine to machine—the type of data Splunk collects and analyzes. It's expected to represent 42 percent of all data by 2020, versus just 11 percent in 2005, according to an IDC report. As new data is filtered from sensors placed in sources as diverse as smartphones, refrigerators and home heating systems, as well as through social media, a 15-fold expansion in M2M is expected by 2020, according to IDC.
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In fact, awash in new and increasing flows of information, the world of gigabytes and terabytes is beginning to look like an antiquated scale for conceiving of information. Data is now being conceived in zettabytes – or a data unit that is equal to 1,000,000,000,000,000,000,000 bytes. Companies are turning to upstarts like Tableau that can store, filter and harness large data sets. "Big data is one of the few emerging growth opportunities in enterprise technology today," said Brian Marshall, an analyst at ISI Group.
Companies can now make decisions in real time to increase sales and productivity, but that's just the bare bones of big data analysis. When it comes to market impact, big data is now being talked about in bold language. Omnipresent, and with information being logged and harnessed faster than ever, big data will come to decide the fate of companies, many experts say.
"Data has become a currency," said Dan Vesset, vice president for IDC's business analytics and big data research. "It's the primary weapon for getting more customers."
Despite the buzz and exponential demand, investors would be wise to remember that it's still early for big data as a market opportunity. Many new big data companies are relatively untested and jockeying for position, said Daniel Ives, senior analyst at FBR Capital Markets. These include companies that are carving out varying parts of the big data pie, including CommVault, Tibco Software, NetApp, Fusion-io and Teradata, which was spun off from NCR in 2007.
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"There's not much meat on the bone today," Ives said, adding that one-size-fits-all big data applications haven't been developed yet.
The upshot, as Ives sees it, is that big data will soon experience a wave of consolidation, likely in the next six to nine months, and that means that the current landscape of darlings will include winners and losers. "A lot of people are trying to figure out who will be the winner," said Ives, "and the jury is still out."
"The start-up analytics community is mind boggling," said Jeff Kelly, Wikibon's lead big data analyst. "Plenty won't be around in a year or two."
There are a number of ways to take a more conservative approach to staying on top of the big data trend, from industrials like Honeywell that make machine-generated data sensors for products including medical equipment to monitor patient airflow, to hardware and software companies.
Storage is a good tech niche through which to play the big data theme. Storage is forecast to have 50 percent compounded annual growth through 2016, according to a recently released IDC forecast, compared with 31 percent for analytics. "It has the brightest future," Vesset said.
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ISI's Marshall agrees, rating storage kingpin EMC a strong buy, and noting that it's one of the few large-cap tech companies that will see double-digit growth for the next three to five years. Currently, 60 percent of EMC's revenues come from big data, Marshall said, adding, "And the company keeps getting better and better."