The Innovation Index analyses the market attractiveness, business model maturity and infrastructure and support impact of a given sector or technology. This is the second part of the new Innovation Index for Hadoop. It aims at analyzing Hadoop business model maturity. The first part of the analysis, covering market attractiveness, is available here. A last article will weigh the impact of infrastructure and support impact on Hadoop.
End-to-end model Analysis: off the ground.
Off The Ground
1. “Tech-savvy individuals with bad intentions can manipulate people through big data, and foreign governments — including Russia, China, and North Korea — have notoriously used it to control their populations”. – Daniel Riedel, Wired
2. “While 34% of the respondents agree that analyzing data from diverse sources is the key issue driving them to consider Big Data, a mere 3% rate the analytical capabilities in their organization as world-class”. Shilpa Phnadis, Times of India
3. “Whilst I’m sure many will create efficiencies and perhaps build out some new services to stay ahead, history tells us, and my instinct says, that many are going to be knocked by new innovative business models that spring up around them.” – Derek du Preez, Diginomica
4. “while more than half of HR practitioners feel confident about using data and metrics to improve their department’s effectiveness, fewer than half said that they were able to draw insights from this data and communicate this to other people in the business.” Cath Everett, Personnel Today
5. “Amazon got there first with a commercial offering of MapReduce, and it has hosted millions of clusters since then, and is likely to expand its partnerships with distribution vendors beyond the already promising one with MapR”. – Merv Adrian, Gartner
6. “Generating immediate revenue from Big Data is a universal goal for most marketers – and DaaS makes this possible for businesses across any type of industry.” Larissa Bedgood, Smart Data Collective
7. “Opening up the API for Watson allows developers and IBM to work together to create a Watson ecosystem. This will give developers and clients access to build any app they want.” Chris Ciaccia, The Street
8. “Formulating a viable strategy and developing IoT solutions can be highly complex.” Justin Browne, GovTech
9. “Offering an interface which allows users to obtain and configure capacity, this allows for complete control over computing resources. The user can scroll capacity up and down as their computing requirements change and Amazon EC2 is offered on a pay as you use basis, only charging the user for the capacity that is used.” James Nunns, CBR Online
10. “70% of large organizations already purchase external data and 100% will do so by 2019 (…) Companies will double their investment in generating new and unique data.” Gil Press, Forbes
The problem of Hadoop supporting big data turns out to be its own solution. This universe of unknowns long to be analyzed and synchronized in business analytics strategies that disrupt beyond the vertical and horizontal models established so far. As a consequence, most actors currently positioned in selling and/or developing Hadoop based services have opted for an open and flexible strategy to market and supporting business models (open innovation and partnerships). Although at early stage, this tends to consolidate and normalise disruption as a way forward, which leaves a great part of uncertainty but shows players are addressing it positively. A shift in mindset ? That may well be. But that’s only a start. The current maturity of end-to-end business models for Hadoop is estimated at 2 out of 5.
Strategic initiatives impact : data on the table.
Strategic Initiatives Impact
1. “A team of researchers from Stanford University and Google have released a paper highlighting a deep learning approach they say shows promise in the field of drug discovery.” GigaOm
2. “The Palo Alto-based company says the new certifications are aimed at accelerating Hadoop adoption in the enterprise – which is obviously where Hortonworks is focused in terms of future growth – by supporting key capabilities required of an enterprise data platform.” Natalie Gagliordi, ZDNet
3. “We can target more effective interventions in areas that historically relied on gut and intuition. At the same time, they present an enormous challenge on how to exploit those to improve a company’s performance.” Manu Panga, Innovation Enterprise
4. ” Data Science is used to leverage eBay’s powerful infrastructure, services and massive amounts of commerce data, while protecting the privacy of eBay’s customers.” Vadim Kutsyy, Innovation Enterprise
5.”Much like its Hadoop counterparts, namely Hortonworks and Cloudera, MapR’s portfolio focuses on the enterprise. What sets MapR apart, however, is its range of proprietary features tailored to specific industries such as financial services, healthcare and telecommunications.” Natalie Gagliordi, ZDNet
6. “Surrounding their de facto Big Data leader — both metaphorically and otherwise — the forces of Hortonworks, Teradata, SAS, and IBM announced the Open Data Platform, a consortium of sponsors (gold and platinum) who will rally around a “core” offering of Hadoop.” Eric Kavanagh, LinkedIn
7. “Looking forward, IBM plans to spend $4 billion to invest in the new areas of focus like data analytics and cloud computing, excluding acquisitions.” Syndication, CIO today
8. “Data is a strategy – and we need to start thinking about it as one. It should adhere to the same competitive standards as other business strategies. Data monopolists’ ability to block competitors from entering the market is not markedly different from that of the oil monopolist Standard Oil or the railroad monopolist Northern Securities Company.” Kira Radinsky, HBR Blog
9. “The Apache HBase community has released Apache HBase 1.0.0. Seven years in the making, it marks a major milestone in the Apache HBase project’s development, offers some exciting features and new API’s without sacrificing stability, and is both on-wire and on-disk compatible with HBase 0.98.x.” Eniz Soztutar, HortonWorks
10. “SAP Predictive Analytics is designed to help bridge the skills gap by placing complex predictive capabilities in the hands of many more users.” Katherine Noize, Computer World
The intensity of Hadoop related articles is representative of the numerous initiatives and different approaches for players to position themselves on the Big Data chess board. As mentioned above, the key point to bear in mind is the disruptive impact of Hadoop related activities, breaking up the value chains and putting usage, therefore humans, at the center of it. The scale of the opportunity is also reflected in the depth of the analysis brought up by specialists. They talk about saving the world, they talk about ending it. Economists foresee drastic changes, businesses dream about unlimited opportunities. This dynamic brings the intermediate Business Model Maturity rate to 3.5 out of 5.
The Business Case : all in ?
1. “Big data is fast becoming the hottest commodity in a contemporary gold rush, with anticipated global growth at a rate of 40% per year and businesses seeking new and innovative ways to commercialise it in their quest for competitive advantage.” Richard Blatchly, Shoosmiths
2. “It is estimated that 2.2 million terabytes of new data is created every day. To put this into perspective, that is roughly 128 million times more than the capacity of the average smart phone in your pocket!” Richard Blatchly, Shoosmiths
3. “the global hadoop market is expected to grow at a CAGR of 58.2% between 2013 and 2020. The market revenue was estimated to be $2.0 billion in 2013 and is expected to grow to $50.2 billion by 2020. Increase in demand for big data analytics is the major driver for this market.” Allied Market Research
4. ” Currently, services market is dominating with a market share of about 50% of the global Hadoop market due to growing necessity of data analysis in various organizations.” Allied Market Research
5. “In 2013, application software had generated the highest revenue of the overall global Hadoop software market. The main reason for this is the use of application software by developers to build applications for data analysis. Hadoop packaged software market is expect to grow at a CAGR of 62.9% during the forecast period.” Allied Market Research
6. “Looking at Oracle’s new license revenue makes this clear. For years the company’s new license revenue has hovered around 37% of total revenue.” Matt Asay, Tech Republic
7. “Analysts forecast the Global Hadoop-as-a-Service (HDaaS) market to grow at a CAGR of 84.81% over the period 2014-2019.” ReportsnReports, PRNewswire
8. “Over one third (37.8 percent) of US businesses have already invested in big data, ahead of Europe, the Middle East and Africa (EMEA), which is at 26.8 percent; APAC, which is on 25.6 percent; and Latin America, which is at a distant fourth, with 17.8 percent.” Angus Mcaskill, ZDNet
9. “Industries furthest down the investment path are media and communications (35 percent have invested), banking (34 percent), and services (32 percent), while government (16 percent) and utilities (17 percent) are laggards.” Angus Mcaskill, ZDNet
10. “Expedia did not say how much its clusters would cost, however in 2013 the company told ComputerworldUK that the business spent over $500 million (£309 million) a year on its in-house technology.” Margi Murphy, Computer World UK
The business case for Hadoop is supporting the generally enthusiastic dynamics generated by the technology while reflecting some uncertainties surrounding business models. With massive yet segmented investments, businesses and investors are showing a candid interest in developing further Hadoop based services. With the rising opportunity of creating self-developed applications and services, to be used either or both internally and externally, a few question marks remain on the actual opportunity that could be shared on the value chain. The potential to market is so far too uncertain to bring further interest, therefore investments, into the play. The Business Case Impact for Hadoop brings the final Business Model Maturity rate to 3.3 out of 5.