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Companies Doing Poor Job Turning Big Data Into Profits

July 19, 2012

Big data promises to boost profits and solve problems, but for many companies trying to put it to work, it also has become a big challenge to manage, a new survey shows.

Published July 17, 2012, Dow Jones Newswires

Vast amounts of information accumulated from the click stream of Web shoppers and sources such as social media and Twitter make up “big data.” But getting the knowledge out is problematic, according to research that Oracle Corp. (ORCL) released Tuesday.

More than 300 executives surveyed reported that their companies are gathering more data than they were two years ago, but nearly one-third gave their organizations failing grades for making good use of the facts, and nearly all of the executives said they weren’t capturing the full benefit of the data. Customer data make up nearly half of the new information flowing into businesses, they said.

Oracle’s research underscores the growing emphasis technology giants are placing on what is said and shared on the Internet. Companies including data center giants EMC Corp. (EMC) and International Business Machines Corp. (IBM), as well as start-ups like Cloudera Inc. and Hortonworks Inc., have launched a series of tools to process and analyze big data.

About one-third of those surveyed said business managers don’t have timely access to the information gleaned from big data. They have to rely on IT managers to compile it, which delays response time and leads to missed opportunities. Inability to understand and act quickly on the data was leading to a lost revenue opportunity equal to about 14% of sales, said survey participants.

Helping clients capitalize on big data “is among the top three business opportunities for Oracle,” along with cloud computing and customer experience management tools, said Rod Johnson, Oracle’s vice president of industries strategy.

Oracle built its software business selling relational database software for tasks such as transaction processing, banking and accounting. Last fall, the company introduced a product using Hadoop, open-source software that is considered a leading tool to process and sort vast quantities of information.

Since then, clients have embraced the value big data can provide, “but the real challenge is around real-time processing,” said Mr. Johnson.

Oracle, with its Exadata database machines and a selection of software for vertical markets such as health care and retail, is poised “to push aggressively into the market from both an industry perspective and a technology and systems perspective,” he said.

Oracle isn’t alone. EMC, a maker of computer storage systems, is trying to simplify analysis of big data, said David Menninger, vice president of strategy at EMC’s Greenplum division. In March, the company launched Chorus, which presents a Facebook-like interface to Hadoop results. It allows managers to follow and modify a line of analysis as fast as the data flow into the system.

Recently, VMware Inc. (VMW) introduced tools for owners of its vSphere virtualization software to build virtual Hadoop computing clusters in the cloud. The VMware product, known as Project Serengeti, is capable of running multiple Hadoop clusters, and even clusters from competitors such as Cloudera and Hortonworks.

Web giants Google Inc. (GOOG) and Inc. (AMZN) offer big data processing utilities, and one of the best illustrations of the promise around big data is the recent public offering of Splunk Inc. (SPLK), which soared 109% on its first day in April.

Many stand to get a piece of the big data pie, including makers of data storage systems, software, computing systems, cloud services and software start-ups, said Merv Adrian, a vice president at industry research firm Gartner Inc.

Enterprise software makers such as Oracle “have an inside track” thanks to their ability to offer clients integrated solutions, but it is too early to pick winners or even know how large the market might become in three years.

“There are billions of dollars in play here in new revenue because people are going to keep and use more data, and they need to find ways to understand it,” he said.

Write to Steven D. Jones at

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