5 things executives are saying about big data

Everybody wants to become a high-performance organization. Why?  Because we’re all experiencing the same data pains. Regardless of industry or location, these are five things I’ve been hearing consistently from executives when they talk about their data:

  1. The way we use data is different than it was five years ago. Then, most of us were using data for business intelligence reporting on past activity. Now we’ve moved to a fact-based decision making culture, so people are relying on data more for making decisions, not just for evaluating past decisions.
  2. What we’re asking of data today is more complex than it was five years ago. Need a few examples? Now we ask data to support risk decisions in financial organizations, to support fraud for online retailers, and to deal with predictive modeling to better understand customers’ likelihood to buy products in the future or if they will continue to be your customers at all.
  3. More of our employees want access to data than ever before. That’s a good thing. It means we’re making decisions based on facts at all levels of the organization.
  4. They want answers faster than before too. If more user want data and we rely on data to make more decisions, we soon see that everyone wants it quicker too. The opportunities for pleasing customers, reducing risk and preventing fraud are all greater when you can make real-time decisions with data.
  5. They want the data in a format they can quickly understand and share with others. Data visualization has become hot. As we deal with large amounts of data, visualization can help us intuitively discern patterns we might not otherwise notice. Once discovered, visualization also makes it easy to explore further or dig into deeper.

These common experiences explain why high-performance servers, in-memory architectures and visual analytics are hot topics right now. The businesses that are serious about becoming high-performance organizations are not just talking about big data. They’re making plans to invest in these areas.

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Bringing the CIO and CMO together with big data

Who should take the lead on big data in your organization? If you read much on the topic, you know there’s some debate around this question lately. Some of the articles I’ve come across include:

As someone who has been a CIO and a CMO at different times in my career, I can see both sides of this issue. Honestly, though, if we’re going to make big data work, the CMO and CIO need to work closely together.

Every CEO is talking about the fact that the CMO will spend more on technology in the next five to ten years than the CIO. It makes sense because the analysis of customer data is an obvious starting point for big data in most organizations.

We are all focused on how to better serve customers, but who owns that relationship? Most often, the care and feeding of customers is the responsibility of marketing in partnership with sales. Any improvements in this area, however, will benefit the entire organization.  Because of this truth, customer intelligence initiatives should be seen as an opportunity to show how big data and analytics can help the company.

Working together, the CIO and CMO have an opportunity to be trendsetters for the organization. The CMO is getting the attention right now because marketing is an obvious starting point for big data, but it doesn’t stop there.

If we make progress with big data in the marketing organization, how can we move in another direction next, based on that success? Maybe other parts of organization will be inspired to think about how to use big data as well: supply chain, optimizing distribution, process control, and so on. These areas don’t appear to be as sexy but they can be just as important to the business.

So, let’s stop arguing about who owns big data and ask instead: How can the organization make big data work for customers first? And then what areas could be addressed using big data next? If the C-suite and everyone else gets focused on those questions, success will follow.

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Q3 2013 Intelligence Quarterly: Marketing in an always on world

Roadside billboards that advertise local restaurants. Incessant commercial breaks for new hybrid vehicles during your favorite primetime shows. The merry jingle of the ice cream truck approaching from down the block. What do these things have in common?

They are classic examples of intrusion-based marketing. They intrude on your daily commute, your nightly entertainment and your lazy summer days with the hopes of finding interested consumers.

Instead, what if:

  • Your car’s GPS used location-based data, your online restaurant reviews and your regular dining schedule to recommend a nearby restaurant that fits your tastes while you’re on the road and starting to feel hungry or tired.
  • Your phone recognizes that you’re near the local sweets shop. Noting your leisurely pace and the hot temperature, it plays the ice cream truck jingle to notify you that your favorite chocolate frozen yogurt is on sale today.
  • Combining location data, weather information and your personal medical history, the weather app on your phone recognizes when the pollen count is increasing in your area and notifies you to buy allergy medicine at your favorite drug store before your allergies kick in.

Are you ready for the real-time world?

You’ll find timely stories in the latest issue of Intelligence Quarterly that show how businesses are evolving their marketing practices to meet consumer needs. They’re using big data and advanced analytics to know what the customer wants, when they want it and how to provide it. After all, it’s not just about making the right offer at the right time. Businesses also have to anticipate demand and make sure their products and services are available when consumers want them.

With user-friendly data visualizations and cloud-based analytics platforms now available to assist them, businesses of all sizes and types are jumping into the real-time marketing game. Read this issue of Intelligence Quarterly to learn how you can too.

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Where’s the value in the cloud?

The public cloud services market is forecast to grow 18.5 percent in 2013 to total $131 billion worldwide, according to Gartner. Likewise, IDC research suggests public IT cloud services will enjoy a compound annual growth rate of 26.4 percent from 2012 to 2016, five times that of the IT industry overall.

We’re seeing that – and then some – at SAS. In fact, we expect to see close to 100 percent growth in hosted software deployments this year and double or triple growth over the next two to three years.

Why is this market growing? It's not just for cost-savings and infrastructure savings. In many cases, hosted software deployments in the cloud are a way for organizations to deal with the lack of analytic talent in the marketplace.

When organizations look at decision making not as an application or solution but as a process, they can ask, At what point in the process can analytics add value in the decision-making process?  Then they ask, Do we have that expertise in house? Can we acquire it?  Or should we move that part of the decision-making process out into the cloud and have somebody who has the capacity do the analytics for us?

When approached from that angle, vendors can help address the shortage not only with software but also with a team of analytics experts. Then, the hosted application becomes more than just ping and pipe data movement inside a black box. It can also include value-added services, customized applications and specialized analytics built uniquely for the business. And it addresses another major business pain: the lack of analytic talent in the marketplace.

Here at SAS, for example, we have an analytics lab of about 300 people, and probably 80 percent of them have advanced degrees. This team of analysts are able to provide that value-add for SAS OnDemand customers and push the answers back out of the cloud.

So, we see cloud growing quite a bit, not just because the analytic technologies are available, but also because the expertise in the marketplace is in short supply.

Let’s look at a few industry examples. We’re hosting markdown optimization and price optimization applications for retailers in the cloud. In financial services, we do a lot of fraud detection applications.  And pharmaceutical companies are analyzing drug development data through cloud-based applications.

Retail is definitely a leader in adopting these new deployment models. It makes sense for retail organizations to send purchasing and pricing data out to the cloud and to rely on a team of off-site analysts who can apply expert algorithms to the data.

When we talk about financial data in the cloud, however, a lot of people start asking about security. So this is also where we need to draw a line between cloud computing and hosted applications.  We host the analysis of clinical trials data for life sciences, or we host anti-money laundering or fraud detection applications for lenders, but the applications are in a very secure environment. It's something that is dedicated for that particular client.

These types of value-added, hosted software deployments are not unique to SAS. This is where the industry as a whole is headed. More and more businesses are expecting secure, off-site environments for analytics that also include services from analytics experts. As a result, we should all expect to see more specialized deployments in the cloud, and we should be prepared to staff the cloud with smart analysts, not just with big data centers and canned software applications.

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Three pillars of inclusive growth in Europe

What Europe needs to jump start its economy is inclusive growth, and that starts with the transatlantic trade and investment partnership (TTIP), which is a hot topic now between the US and European Union. Its broader impact on jobs and welfare, however, relies on the following three pillars.

1.       Increase employment through the digital economy

Inclusive growth is economic growth through maximizing employment. Youth unemployment in Europe is a staggering 50 percent. Only one out of every two students gets a job out of college. Inclusive growth requires getting those skills into the workforce, and that in turn depends on modern day labor reform.  One way to address youth unemployment is through the open data directive, now being considered by the European Commission.  A study conducted last year by the Centre for Economics and Business Research found that the open data directive generated 58,000 jobs and £216 billion in five years for Britain’s economy. Similar results are achievable in Europe as opening the digital economy would allow the next generation of skills to enter the workforce.

2.       Unleash the service economy

Once Europe liberates its digital economy, it can then unleash its sleeping giant, the service economy. Services account for 70 percent of Europe’s GDP but only 23 percent of its global exports. Given that half of these exports of are enabled by ICT, the digital economy is a direct link to services trade. A strong digital economy will drive the service economy and produce the next generation of jobs as companies ramp up their service exports.

3.       Enable innovation in the traditional economy

Once the service economy gains traction with help of the digital economy, it will then fuel innovation in Europe’s traditional economy. Brick and mortar businesses are the lifeblood of Europe’s economy, but to regain competitiveness they must improve the customer experience through the convergence of products and services. Without innovation, these companies are left to wither on the vine. In addition, releasing the service economy will provide the funds needed for the European Council to reach its goal of investing 3% of GDP in R&D, a strategy expected to create 3.25 million new jobs in Europe.

TTIP on its own is promising, but gains can be multiplied if inclusive growth is enabled by these pillars. For Europe to compete in tomorrow’s global economy, it must view TTIP not as the fix but the foundation for trade. Once that foundation is set, these pillars can rise to exponential heights and add 4 million new jobs to the region while bringing growth and competitiveness back to Europe.

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In pursuit of excellence ... with SAS centers of excellence

One of the many things we do at SAS is help our customers create a culture of analytics, often by establishing centers of excellence. In the simplest terms, centers of excellence enable organizations to better exploit analytics – or other forms of technology – to their competitive advantage.

At SAS, we’ve practiced what we preached by forming our own centers of excellence spanning Europe, Middle East, Africa and Asia Pacific. Over the years our SAS COEs have evolved with shifts in the market and changes in our customers’ needs.

As you may expect, our COEs are made up of centralized, highly specialized teams with clear focus on specific domains. For us, these domains include integrated marketing management, risk management and analytical platforms – areas where SAS excels and where we’ve seen ever-increasing demand from customers and the market.

The teams that comprise our COEs are skilled domain experts that provide a great depth of knowledge and thought leadership in their respective domain. This adds a great deal of value, not only to our customers, but also to the way we operate as a company. This is one aspect of our COEs that can’t be over-emphasized: They make sure the customer voice is complete throughout our organization.

Case in point: Our COE experts work hand in hand with customers to formulate a vision of what their organization could look like powered by analytics. They paint a picture of what is possible when the company harnesses its big data asset using analytics. And in turn, the COEs ensure feedback from the field reaches our product management division so that we can continuously improve our software and internal processes based on customer experience.

It’s a continuous loop, and one that has proven to work very well. The COEs at SAS benefit customers by providing them with essential expertise and, at the same time, enable us as a company to operate more efficiently to meet our customers’ needs.

This is just another great example of our company’s customer-centric focus, which we foster through all aspects of our business, from our innovative technology to our brilliant workforce to our strong customer relationships. We don’t sell to our customers, we partner with them and help them achieve a new level of excellence.

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White House and Congress can add fairness to patent litigation, address $500 billion problem

According to an oft cited 2012 Boston University study, lawsuits filed by patent trolls cost innovators $500 billion in lost wealth from 1990 to 2010. Far too often, the goal of a lawsuit brought by a patent troll is not to defend a patent – or even to practice the invention – but to force a settlement.

In none of the cases where SAS has been sued for patent infringement is the plaintiff an operating company. Those suits are only brought by Patent Assertion Entities, commonly referred to as “patent trolls”. These are shell companies that make nothing, sell nothing, produce nothing (other than litigation) and employ no one (other than lawyers). Conversely, trolls target the companies that are actually innovating, employing Americans, building our economy and providing opportunity in this country.  Their actions have far reaching effects on innovation, job losses and employee pay and benefits.

US government leaders have turned their attention to this issue. The White House released a report last month on the effects of patent trolls on US innovation. From the report:

Suits brought by [patent trolls] have tripled in just the last two years, rising from 29 percent of all infringement suits to 62 percent of all infringement suits. Estimates suggest that [patent trolls] may have threatened over 100,000 companies with patent infringement last year alone.

When SAS is sued by a patent troll, we have already lost.  We can either fight the troll and spend millions of dollars to do so or pay them to go away.  If we fight, we spend money on lawyers and court costs and cost to respond to discovery.  We divert the attention of our executives away from running our business and divert our software engineers from developing products. If we settle, we effectively become an ATM machine for this troll and for the hundreds of other trolls out there looking to make money by threatening litigation.  It is truly a no win situation.

It is time to inject fairness and balance back into the patent litigation process.  There is one change that will go a long way towards limiting abusive behavior by patent trolls.  Typically, a patent troll will demand that the defendant produce any and every electronic document that might touch upon the alleged claims, by any person inside the defendant’s operations.  This discovery process can involve millions of documents and cost millions of dollars to produce.  Under current rules that cost is borne by the defendant.

Patent trolls often bring these cases in jurisdictions that allow this type of expensive discovery. In patent cases with trolls, the discovery burden is solely on the defendant. Patent trolls have no employees or products so they have virtually no documents or witnesses.  Their burden of discovery in litigation is minimal.  Thus, these trolls can wage a high cost discovery war with impunity. This cost to defend the litigation is one large hammer that drives companies to pay to settle.

It does not have to be this way.  In a patent case discovery should be relatively straightforward. The only things at issue in a patent case are what does the patent say, and what does the infringing product do?  Discovery should focus on that.  All that is really needed are core documents, which include the patent at issue, the technical specifications of the allegedly infringing product or feature, and the prior art. Normal rules of discovery should apply to the disclosure of these core documents, with the person or company producing the core documents paying the cost of production.

Additional discovery should be permissible; however, the party requesting it should pay the cost of that discovery. This approach allows patent cases to proceed efficiently yet it removes the ability to use discovery as an abusive weapon.  Parties can still get the evidence they need to prove their case.

I’m encouraged by developments in Washington, though more needs to be done. For instance, Senator Cornyn recently introduced legislation that would, among other things,  mandate changes to the discovery rules in a manner consistent with the philosophy described above.  Similarly, the House circulated recently a “discussion draft” that also addresses the discovery burdens.  But, instead of mandating statutory changes, the discussion draft would instruct the Judicial Conference to make recommendations to change discovery rules within six months. It does not, however, require any court to adopt these recommendations.  While there is a role for the Judicial Conference to play, a stronger statutory requirement that changes the rules in all courts is really the better solution in this instance because the problem has arisen from judicial discretion.  Judges do not have to allow expansive, expensive and abusive discovery, yet they do.

Besides releasing a report on the problem, the President also announced a number of legislative suggestions  and executive actions for the Administration to pursue.  All of these are important steps, and I applaud the President for his leadership on this issue.  As the President’s report notes, changes in policies that will have the effect of “reducing the disparity in the costs of litigation for patent owners and technology users” is a critical part of the solution.  Given that the discovery reform described above is intended specifically to reduce the disparity, it will have that impact before litigants ever reach the courthouse doors.

The steps proposed in the Senate, the House and by the President are steps in the right direction and we look forward to working with government and industry to enact fair, sensible discovery patent litigation reform. Otherwise, American growth and innovation will continue to be threatened by an unbalanced process that is too easily abused for the benefit of very few.

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Europe cannot afford another Doha Round

As the European depression deepens and unemployment soars, policymakers are desperate to restore growth in a region crippled by debt. Opportunity knocks, but the question is: will Europe learn from its mistakes?

To help address this issue, I’m in Brussels speaking at the European Business Summit, where the hot topic is the Transatlantic Trade and Investment Partnership (TTIP). In short, TTIP is a trade agreement between the EU and US that seeks to bring convergence on key standards and regulations for the benefit of both economies. If successfully negotiated, TTIP would be historic in scale, supercharging trade in a transatlantic economy that already swaps nearly $1 trillion in goods and services each year.

In his recent State of the Union address, President Barack Obama put his stamp of approval on TTIP, announcing his intent to initiate an agreement with the EU. According to his executive office, “a successfully negotiated TTIP would aim to boost economic growth in the United States and Europe and add to the over 13 million American and European jobs already supported by transatlantic trade and investment.”

More jobs, more investment, more growth … this all sounds good, but will it happen? The Economist thinks TTIP has a good chance of surviving. While I commend the EU and US for its vision, I can’t help but remember the failed Doha Round launched in 2001, where similar trade negotiations between the EU and US stalled over emotions.

Like TTIP, the Doha Round aimed to lower trade barriers for global economic gain. Yet, 11 years later, no agreement has been made as the EU and US remain deadlocked over, in essence, the particulars of trading beans and rice. Despite the fact that agricultural trade accounts for only 8 percent of world merchandise trade, this issue became the linchpin in the Doha fallout, a missed opportunity said to be worth hundreds of billions in lost trade.

Facing economic crisis, Europe cannot afford another Doha Round. Europe needs an alternative to austerity and that starts with a transatlantic partnership that enables the private sector to fuel inclusive growth through more public-private partnerships. Holding on to protectionism policies of the past will only lead to further austerity and social unrest, which threatens the very foundation Europe is built on. Options are narrowing quickly, and approaching current negotiations in the same way as the Doha Round will prove fatal unless balanced with policies that promote free trade, especially in huge growth areas like the digital economy, which is estimated to reach $20 trillion in value this year.

EU and US relations are at a turning point, and the benefits of TTIP could be tremendous for the transatlantic economy. I encourage policymakers to heed the lessons of the past and bring these negotiations to a successful close. After all, TTIP is not a zero-sum game, but rather a joint effort to put our transatlantic economy in a stronger position to meet the competitive challenges of tomorrow. Let’s rise to the occasion.

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Q2 2013 Intelligence Quarterly: Bring big data to life with visual analytics

We are shifting from a world in which we think we know into a world in which we know and we can prove it. This paradigm shift was made possible by our newest and most important asset class – data. Consider that 90 percent of the world’s data has been created in the past two years, with that number expected to double in the next 18 months. Now that is big data. But the value really starts when you liquidize the data asset using visual analytics.

Just as the steam engine was central to the industrial revolution by providing a convenient source of power, being able to harness the power of big data is central to the digital revolution. With analytics, the data asset allows us to benefit from our collective knowledge and outperform previous generations in efficiency and innovation. That’s good news, as the potential economic and social benefits are endless.

In the digital economy, the new asset class can positively affect a broad range of issues, including improving health care, eradicating unemployment and fueling economic growth – all while fostering inclusive growth. In this issue of Intelligence Quarterly, you will find stories of many organizations that are transforming the data asset into a driver for greater public good as well as a competitive advantage. Will you be the next to unlock the power of big data?

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The little engine that could

“I think I can, I think I can ...”

Chances are, you’ve heard this phrase before. Popularized in the children’s book, “The Little Engine That Could,” the iconic phrase is repeated throughout the story by the small engine as it struggles to tow a heavy train over a mountain.

In the end, you guessed it – through the power of optimism and hard work, the tiny steam engine was able to overcome the challenge and save the day.

While in Mumbai last week for SAS Forum India, I compared the technological promise of big data to the steam engine during an interview with Business Standard. Just as the steam engine was central to the industrial revolution by providing a convenient source of energy for transportation, big data is central to the digital revolution by enabling us to benefit from our collective knowledge and outperform generations past in efficiency and innovation.

In other words, cresting that mountain now would be a cinch.

In my opening keynote at SAS Forum India, I elaborated on the power of big data before an audience of SAS customers, data experts and industry leaders. My theme was “big analytics + big data = big opportunities,” and I didn’t miss the chance to point out India’s unique big data opportunity, noting the country is projected to add more Internet users than any other country in the world over the next three years.

This digitization could add as much as $100 billion to India’s GDP by 2015, according to a study by McKinsey & Company. While other developing nations focus on things like automation, India has moved beyond this point and can now focus on using data and technology to improve work processes in its skyrocketing manufacturing and IT sectors, for example.

As I noted on stage, big data is also useful beyond business. When leveraged with analytics, it can enable governments and regulators to avoid financial meltdowns, and underpin advancements affecting a host of public issues, including health care, unemployment, education and economic growth.

Knowing that data is emerging as a new asset class, it’s clear the economic and social benefits are infinite, especially in India, where the rising economy is fertile ground for those willing to leverage this asset.

In the digital era, hard work and optimism will only get you so far. To capitalize on the opportunities of today, the right analytical tools are needed. Those who invest in the tools can move from “I think I can” to “I know I can.”

Hop on board.

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