Big Data Hot Spots: Vertical Market Opportunities

I went to a conference provided by one of the Big Data platform leaders last week, and I was struck by the lack of persuasive reasons presented for aggressively moving forward with broad scale Big Data projects. There were a couple of customers discussing their experiences but their focus was architectural and operational rather than business minded. Instead of tangible use case, vertical application, and ROI successes and proof points, there was an implicit assumption that skyrocketing growth in data volumes meant that Big Data deployments would soon take over the IT world, and that by inference, this early-to-market vendor would necessarily be a market leader. 

I call this rationale the "Chicken Little approach" because we can't validate a technology movement just because an industry or a vendor makes a lot of noise. (In this case, the Big Data technology boom is implicitly assumed to be valid because start-ups and chunks of data are falling from the sky!) And as far as the vendor is concerned, we can't ordain it a long-term industry leader just because it is early to market with a Big Data platform.

Customers will not bet their jobs on unproven business assumptions and the promise of higher performing computing. At the very least, Big Data vendors must demonstrate better business results for their customers, offer value or cost benefits that far outshine current alternatives, and provide some hard assurances that any departure from a customer's existing infrastructure would be in sync with the industry and would be fully supported for the foreseeable future. 

As a Marketing guy, there are several directions I’d take to prove the advantages of Big Data solutions to the business community including characterizing the opportunity by industry vertical, identifying key use cases that resonate with the market, and providing vendor specific unique proof points and value propositions. I'd first identify the key verticals to approach because use cases and value propositions become more tangible and persuasive when they are validated by vertical. The rest of this blog focuses on one of several approaches that could be used to identify the most likely vertical targets for Big Data vendor offers. 

The chart below is from the October 2011 McKinsey Quarterly. It's two years old but still relevant. I like the McKinsey analysis because it suggests near-term opportunities, e.g., finance and insurance, and promising verticals in the mid to long-term, e.g., the real estate market. This chart also forecasts the economic impact (GDP) that should occur as these industries take advantage of Big Data technologies. For instance, Big Data is predicted to provide an enormous lift for the Real Estate business.

This McKinsey analysis provides a comparative view of the many potential verticals that could be considered. The vendor who takes the more targeted vertical approach to market is far more likely to persuade business decision makers to get serious about Big Data and to include that vendor in their Big Data IT deployment plans. 

Look for my next blog which will explore the key use cases driving Big Data today.

Assessing a Business...Simply

Silicon Valley is largely made of two types of people. The first type tends to roil in complexity and detail and, left to their own devices, would develop products and services that may work well but may never solve a meaningful customer problem. And the second type tends to work at the aspirational and visionary level but often does not have the operational "chops" to bring their vision to market.

Technology leaders and individual contributors alike need to figure out ways to bridge this gap. That's why I appreciate simple and direct frameworks for evaluating business and project opportunities--so that we can cut through the noise and describe an opportunity in simple terms for all technology audiences. Here's a framework that I think is simple, direct, and powerful.

This framework was invented by Alexander Osterwalder and is included in a book named, Business Model Generation.  I was introduced to this through a blog from a Redpoint VC.  I like this model because it provides a "back of the envelope" way of capturing what a business offers, how it reaches customers, and its likelihood of profitability and success.  And we all can understand it.