white paper Big Data for Small Business Why small to medium enterprises need to know about Big Data and how to manage it Sponsored by:

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1 white paper Big Data for Small Business Why small to medium enterprises need to know about Big Data and how to manage it Sponsored by:

2 Big Data is the ability to collect information from diverse sources through an infrastructure that can scale up to deliver analytics in a cost-effective and timely manner. What is Big Data? Companies of all sizes are dealing with electronic data at greater volumes than ever before. It s hard enough just keeping pace with today s data growth, let alone managing it, keeping it secure and trying to analyze it. Big Data is about transforming raw data into knowledge, so you can make smarter technology and business decisions. Big Data allows you to take data from different sources, such as customers and partners, and combine that information with internally-generated data to make quality and timely decisions. Enterprises have traditionally used relational databases to power business applications. This has been good for structured data and has some capabilities that are required for business applications, such as transactional integrity and security. However, getting actionable intelligence from these sources using this technology requires a large amount of investment into computing capacity and storage. Using traditional approaches, the investment required is justifiable only when the results can provide a large enough ROI. This has resulted in it being used only by a few large companies. New technologies are now available to address these data deluge problems and make Big Data accessible to companies of all sizes. Why Big Data is relevant to small business? Typically, small businesses view IT as a cost center. In fact, the expensive traditional computing tools have historically posed a very high barrier to entry for small businesses. The same can be said for data management, where the high costs of storage, analytics and other relevant solutions made data backup, disaster recovery and business intelligence challenging at best and non-existent at worst. For these reasons, Big Data has also traditionally been discussed in the realm of large enterprises. That s not because smaller companies don t have the pain around data growth and business intelligence. As discussed above, companies of all sizes need to do more to not only manage but understand their data. Today, smaller businesses make decisions based on data that does not show the complete picture of the business or the situation. This is partly due to the lack of access to the right set of tools to analyze their data and, predominantly, due to the cost of storing all the digital data being generated. However, with the evolution of cloud computing, small businesses can increasingly afford IT solutions traditionally only enjoyed by large organizations. This is particularly true as the cost of local storage continues to decline and cloud storage is finally becoming more cost-effective, providing small businesses a great opportunity to better manage these large volumes of data. Analyst White Paper: Big Data for Small Business. 2012, Robust Cloud 2

3 With tools capturing real-time sources of information, including mobile and social, IT and business leaders can play in the Big Data realm and make better decisions based on real-time data rather than stale static data. In addition to cloud-based solutions, the easy availability of sensors and other data collection tools enable small businesses to collect and analyze large volumes of data that can help them compete in today s data-driven world. With the availability of these approaches, new solutions are emerging that take advantage of the ability to capture and analyze massive amounts of data. As a result, business models are able to be rapidly changed. Experimentation allows targeted efforts through rapid customization that is extremely important in the new business environment. How does Cloud make managing Big Data possible for Small Business? Cloud Computing is changing the Big Data landscape in many ways. 1. Cloud makes it easy to collect, store, cleanse and analyze data in a more cost-effective manner than traditional infrastructure because of its elastic nature and easy scalability. 2. As social and mobile technologies enter the small business landscape, it is easy for companies to not only collect the data in the cloud, but also easily deliver data and insights to various devices used by their employees, partners and customers. 3. The elastic nature of the cloud makes it seamless for small businesses to take advantage of Big Data as the barriers are lowered. 4. Even though data silos are not eliminated automatically in the cloud, it makes it much easier for organizations to avoid creating data silos. Presence of cloud-based analytics tools helps organizations take advantage of their data in a much more efficient manner than anytime in the past. Big Data applies a set of new technologies to allow extraction of value from information in a cost effective manner that was previously possible only by very large enterprises. Opportunities can be uncovered by co-relating the new and varied sources of information with the existing data. By marrying Big Data and Cloud Computing, small businesses can: Lower TCO and increase ROI Make better business decisions by leveraging real-time data, thereby, achieving increased business agility Reduce friction with partners and customers and vastly improve the engagement with them Offer better customer support Analyst White Paper: Big Data for Small Business. 2012, Robust Cloud 3

4 Big Data and Cloud completely democratize the marketplace, offering small businesses an opportunity to compete with larger organizations on an equal footing. Potential Big Data Uses in Small Business Big Data and Cloud are completely reshaping the small business landscape, opening up vistas that were previously not available to them. Big Data and Cloud completely democratize the marketplace, offering small businesses an opportunity to compete with larger organizations on an equal footing. These technologies open up some interesting use cases for small businesses which were not available in the traditional era. a) Insights from real-time social data Social technologies like Facebook, Twitter, etc. have completely rewritten the old rules of business, providing customers a stage where they discuss their experience with business vendors. These tools provide real-time insights into what your customers are talking about in terms of their interests, about their own business or competitors, trends, etc. But to effectively track and learn from social interactions, this real-time social data has to be collected and mined for useful business intelligence, which, in some cases, may turn out to be a competitive advantage for small businesses. b) Supply Chain Optimization Recent trends like increased transportation costs are causing major changes in manufacturing, for example, re-shoring of production operations. Gaining insights by integrating data from shop floor and supply chain operations go a long way in reducing these costs. Managing operations with information from this granular data that did not exist previously can pay big dividends. Leveraging information from real-time sources like weather and traffic can reduce fuel costs by optimizing logistics. c) Sales Insight for better Decision making Big Data and cloud-based sales applications offer just-in-time insights to sales people, helping them make better decisions in the field. With nearly ubiquitous mobile and internet access, Big Data offers the necessary information readily available through various devices, which helps sales teams close deals much faster than in the past. Being able to rapidly analyze data coming from every sales unit, while connecting that information with inventory and supplier information, can allow you to modify pricing and react to market demands in real time. d) Improving customer experience Big Data and the better insight it provides business owners easily translates into a superior overall customer experience. As mentioned above, Big Data and real-time information not only offers a better sales experience, it also helps businesses discover how their customers feel, even before the customer Analyst White Paper: Big Data for Small Business. 2012, Robust Cloud 4

5 takes the issue to the vendor. Social tools, and their integration with other areas of the business, help organizations offer pro-active support, positively impacting the customer experience. Big Data and cloud-based analytics tools also offer business owners a holistic view on their business, which often helps in improving the overall experience of their customers. These are some of the potential use cases for Big Data for small businesses. In today s hyper competitive globalized economy, small businesses need to be smarter than ever before, and Big Data is an important part of their toolkit. Modern businesses leverage Big Data and cloud to gain competitive advantage, which was not even possible in previous decades. Storage and Backup Challenges brought upon by Big Data Even though Big Data offers competitive advantages for small businesses, it is not a magic pill. Small businesses face various challenges as they accumulate vast amounts of data about various facets of their business. Cloud-based applications, social tools and mobile devices make it easy for small businesses to collect large volumes of data. However, they face great challenges in terms of storage and backup. In this section, we will take a look at how cloud can help solve the storage and backup problems for SMBs, and also, look at some of the challenges associated with storing Big Data in the cloud. a) The role of Cloud in data storage and backup Unlike large enterprises, small businesses cannot afford IT teams to manage their storage and backup. Usually, SMBs do little due diligence on their storage and backup strategy. Cloud can help SMBs both in terms of their storage needs and also as a backup strategy. Even though Big Data offers competitive advantages for small businesses, it is not a magic pill. Small businesses face various challenges as they accumulate vast amounts of data about various facets of their business. For many smaller enterprises, data is stored either in user personal computers or internal servers with minimum or no backup plan. The data stored internally are fragmented on many different systems, contributing to data silos and lost opportunities. By using cloud for their storage needs, SMBs can store all their files in a centralized location with easy access from any device, anywhere, anytime. The rapid elasticity offered by the cloud allows them to scale up or down based on their needs without spending huge capital expenses and without any delay. The use of cloud for storing data also decouples users from their machines, opening up newer opportunities for SMBs like faster time to market, ability to have a more mobile workforce, real time access to data without expensive hardware and software, etc. More importantly, cloud offers SMBs better security against viruses and intrusions, because most cloud storage providers employ security best practices across the stack. Analyst White Paper: Big Data for Small Business. 2012, Robust Cloud 5

6 Big Data is the ability to collect information from diverse sources through an infrastructure that can scale up to deliver analytics in a cost-effective and timely manner. The cloud also serves as a good backup solution, making disaster recovery easy and seamless. At present, most of the SMBs have no data management policies or safeguards to protect their data. Even though some SMBs do local backups, it doesn t protect their data from fire or other natural disasters. Cloud offers them a solid disaster recovery option, thereby, protecting the businesses from any potential disasters beyond their control. With the right provider, both the backup of data and recovery in the case of disaster is fairly seamless and hassle free. b) How to ensure Big Data doesn t equal big costs in the Cloud Even though cloud based storage and backup is a no brainer for SMBs, they have to be extremely careful when it comes to Big Data and cloud. Without careful planning and due diligence, Big Data and cloud could end up being a big cost for the business. Even though cloud storage is commoditized, the typical per gigabyte storage fees can add up, and often cloud storage is considerably more expensive than using local storage devices. Also, some providers have hidden costs in their storage plans, such as pricing tiers, additional fees for data restore or support, or high fees for premium features. With data volumes now running in the terabytes, these costs can quickly add up. There are two major types of hidden costs SMBs should be aware of. First is the free storage offer, where a provider offers a few gigabytes of storage for free but charge a hefty fee when it comes to storage at scale. As businesses accumulate large volumes of data, these costs can easily shoot up beyond control. Second is bandwidth costs, as some cloud storage providers charge high fees for network bandwidth, even though their per GB storage cost is very cheap. When large volumes of data are transferred from business locations and user locations, these costs can easily add up, making cloud storage cost prohibitive. Any SMB wanting to take advantage of cloud for their Big Data needs should conduct proper due diligence on these hidden costs, and select a provider who can truly offer a low-cost solution for Big Data needs. Even though cloud storage and backup may appear like the quick fix SMBs need, the hidden costs and effects of network latency can inhibit adoption. This makes it mandatory for SMBs to have an appropriate cloud storage and backup strategy before they push their (big) data on to the cloud. (if you can t do this yourself, find a good IT service/solution provider to work with.) Analyst White Paper: Big Data for Small Business. 2012, Robust Cloud 6

7 Best practice suggestions Cloud storage and backup are the right solutions for SMBs in this Big Data world. However, SMBs are responsible for selecting the right cloud storage provider if they want to avoid any of the pitfalls associated with cloud computing. In this section, we will offer some brief suggestions that might help SMBs take full advantage of cloud based storage and backup solutions. This becomes all the more important as SMBs move to cloud for their big data needs. 1. Due diligence on the provider: One of the first things SMBs need to do when selecting a cloud storage provider is do due diligence around the provider s financial stability and business trustworthiness. Check the background of the company, its founders, its funding situation, revenues, other customers, etc. It is important to ask for and get customer references and talk to them directly to make sure they are happy with the provider. SMBs should do due diligence before selecting a Cloud storage service. 2. Technical due diligence: Before trusting data with a provider, it is important to make sure that the cloud storage vendor offers a service that is reliable, scalable to meet the Big Data needs, and secure. Make sure the data is encrypted both in motion and at rest and meets any of your security and compliance needs. 3. Data ownership and privacy: This is as important as the security of the data. Read the terms, including any fine print, to make sure that the data ownership rests with the end user, and the provider can t take it away or delete it for any reason. It is also important to make sure that the vendor s privacy policy meets your needs. While large public cloud providers may offer storage for the lowest price, many of them also use customer information to drive increased revenue through ads. For this reason, smaller vendors focused on data protection or backup may be a better fit. 4. Data retention policies: It is important to understand how the service provider backs up user data, including geographical redundancy. It is equally important to understand what the data retention policies are and that they meet your compliance requirements. 5. Incremental backups: If the cloud storage provider charges network bandwidth fees, it is imperative that your backup plan is incremental rather than backing up everything everyday. Otherwise, the cost will add up making a huge financial dent in the return on investment gained. Beyond cost, incremental backup can have a great performance benefit. Even though the above best practices suggestions are not exhaustive, these are critical first steps needed for SMBs to consider before they move data to cloud. These suggestions should not deter SMBs from taking advantage of the cloud to gain competitive advantage. Cloud is especially a right fit for the Big Data era. Instead, SMB s should complete reasonable checks before selecting a cloud storage service. Analyst White Paper: Big Data for Small Business. 2012, Robust Cloud 7

8 Conclusion A deluge of digital data is being experienced by companies of all sizes. Increasingly, businesses need to not only manage and secure this data but gain intelligence from it in order to make smart business decisions and adapt to changing market requirements. Big Data applies a set of new technologies to collect data from multiple sources and extract value from the information, uncovering opportunities by co-relating new and varied sources of information with the existing data. Traditionally, only the largest enterprises were able to incorporate data analytics of this nature and leverage what we today call Big Data. However, with new cloud technologies delivered as a service, Big Data has become accessible and a critical focus for small to medium enterprises. This combined with more affordable cloud storage and backup solutions enables all companies to gain significant value and competitive advantage with their data. While businesses are gaining great value from Big Data, such as responding to real-time social data, optimizing supply chain processes, and improving sales and customer experience, it is also posing some challenge. By following best practices and combining Big Data with other business processes and cloud solutions, SMBs can compete with larger players on equal footing. The importance of Big Data is going to increase drastically in the next three to five years, and SMBs should take advantage of this technological evolution to compete effectively in the globalized marketplace. About RobustCloud Robust Cloud LLC provides strategy and insight into the adaption of Cloud Computing technologies. The company provides advisory services and works closely with end user companies, ISVs and SI s, and vendors to help all parts of the ecosystem understand cloud computing, map business goals and objectives, review and fine tune strategies, identify benefits and return on investment, and more. Robust Cloud s consultants bring extensive experience in crafting and delivering innovative solutions to the enterprise market. Principal Consultant, Larry Carvalho, also frequently presents at cloud-related conferences as well as facilitates workshops and comprehensive group workshops aimed at clarifying cloud adoption roadmaps. Analyst White Paper: Big Data for Small Business. 2012, Robust Cloud 8 All rights reserved. WP-RC