analytics acquisitions: algorithms count in large amounts

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How important will analytics become in a world of big data? If recent acquisitions by IBM and HP are anything to go by, analytics is the next big thing. Both vendors, who have been gradually building end-to-end computing portfolios over the years, have both recently purchased companies with extensive analytics capabilities.

HP aquired Autonomy, a UK-based firm with extensive natural language processing capabilities and analytics technology designed to mine everything from images to text. The $10 billion purchase will significantly flesh out HP's software portfolio, which currently contributes less than 3% of its revenue.
 
IBM has spent more than $14 billion over the past five years on acquisitions in the analytics industry. Most recently, IBM purchased security analytics software firm I2 for an undisclosed sum, before snapping up Algorithmics, a privately-held provider of financial risk management software. Algorithmics' software takes risk data from various sources, and identifies risk using automated assessment processes.

as volume of data increases, analysis tools are vital

Analytics is becoming the next big thing because the volume of available data is increasing dramatically. IDC's recent 2011 Digital Universe study, ‘Extracting Value from Chaos’  found that the volume of data in the world is doubling every two years, and predicted that 1.8 ZB (1.8 trillion gigabytes) will be created and replicated in 2011.

One revelation from this study was particularly interesting: The amount of information that individuals create themselves, such as writing documents, taking pictures, and downloading music, is far less than the amount of information being created about them in the digital universe.
 
Understanding how to mine this data for new insights will be a defining skill for tomorrow's successful companies. And yet, we have only just begun to understand what is possible. Much of the value in this data is latent, because we are still understanding how to process it.
 
Take social media, for example, one of the fastest-growing ‘big data’ sets available.
 
The language used in status updates is very telling, when taken in context. In their book, ‘Tribal Leadership: Leveraging Natural Groups to Build a Thriving Organisation’, Dave Logan and John King described the results of a 10-year, 24,000 person research study. These companies are defined by how the ‘tribes’ within organisations communicate. The book describes five levels of language, from the least mature, in which individuals complain incessantly about what the world has done to them, to the most mature, in which they talk about changing the world and continually discuss possibilities. In the middle, various levels of maturity, as illustrated by the language they use, define an individual's potential for leadership. The more that people begin talking about collaboration, leadership, and working together, the more capable they show themselves to be.
 
Mining the latent value in data such as this could help managers and recruiters to identify potential leadership material, either within an organisation, or outside. But are we doing it yet? No. Analytics is, indeed, an important part of the corporate landscape. But we are only just beginning to explore its true possibilities.
 
Do you think we understand the potential for analytics yet?
Stewart Baines

I've been writing about technology for nearly 20 years, including editing industry magazines Connect and Communications International. In 2002 I co-founded Futurity Media with Anthony Plewes. My focus in Futurity Media is in emerging technologies, social media and future gazing. As a graduate of philosophy & science, I have studied futurology & foresight to the post-grad level.