Big data analytics, along with cloud services, social media and mobile computing, are transforming IT and the way companies do business. As a result, they are also impacting the products and services IT channel companies offer their customers.
IDC forecasts that the big data technology and services market will grow at a 27% compound annual growth rate to $32.4 billion through 2017. That's six times the growth rate of the overall information and communication technology market. Systems integrators, value-added resellers, or VARs, and service providers are in a good position to take advantage of this market with big data consulting services and hardware resale.
The No. 1 question we get from clients regarding big data in general is, "What are other people in my industry doing?
Experts agreed that the more significant big data-related business opportunities reside in strategic consulting. "The people who are buying 100 [terabytes] [of storage capacity] yesterday will buy 1,000 [TB] tomorrow, and that's exciting in and of itself, but the really exciting opportunity is on the services side, where IT channel companies are approaching big data as solution providers. That's where the business value is," said John Miri, CEO of Bluewater Technology Services, an Austin, Texas-based technology consulting firm.
Big data consulting: Finding the solution to a problem
Solution providers who approach big data projects as a solution to a specific business problem help ensure the project's success. According to Nick Heudecker, a Gartner analyst based in San Jose, Calif., this isn't the way businesses usually come at big data projects. "They say, 'Let's pick a technology and see what we can do with it.' But it should be the opposite. They should be picking a business problem and then picking the technology that can help address it."
Miri agreed: "If people want it to work, they have to think about it from the business problem on down, not from the infrastructure up."
William McKnight, president of Plano, Texas-based McKnight Consulting Group, advises IT channel companies to "start with [the] business value prop" -- something a lot of businesses struggle with. "[Big data] projects have popped up because it's neat and interesting and new, but it sits in a business department where no one knows what to do with the data," he explained.
IT channel companies that specialize in vertical industries can bring a lot of value to these engagements. "The No. 1 question we get from clients regarding big data in general is, 'What are other people in my industry doing?' So, they need some assistance uncovering what opportunities exist depending on their industry and what data is available to them," Heudecker said.
These insights can be eye-opening for clients. "To me, the reason why the services and the value-added is exciting is I don't think the customers know the exciting possibilities of what they're doing," Bluewater Technology's Miri said. IT channel companies can approach their clients and suggest ways in which big data analytics can help them solve legitimate business problems. For example, big data may be used to help a manufacturing firm determine which parts of the supply chain is systematically causing defects or a utility provider determine what percentage of power generated is stolen. ("The possibility for finding fraud abuse in any program is fantastic," he said.)
Heudecker said that Gartner also advises clients to look outside their industry for inspiration. "Being able to apply expertise from multiple verticals should be appealing as companies look at engaging consulting firms and service providers," he said.
Big data technology opportunities
Once the business problem is identified, IT channel companies can help their customers select and deploy the proper technologies. "Big data is like any other data in many respects; however, it tends to get put into different platforms than what companies may be used to," explained consultant McKnight. "This includes Hadoop and SQL databases, which are scaled-out architectures with nodes. They are more geared toward the needs of data that will accumulate rapidly and have less value per capita." As these new structures enter the IT environment, they bring with them a learning curve.
One of the challenges is what Gartner's Heudecker calls a "shifting hardware investment." He said, "Traditionally, the investment cycle has been for massive servers and storage area networks [SANs]. Hadoop shifts that to small, commodity clusters. You can grow clusters very organically rather than investing in a massive appliance that has a much higher price tag."
Krish Krishnan, founder and CEO of Chicago-based Sixth Sense Advisors, an independent analyst firm, agreed. "It's no longer about how much SAN do you want; it's how much are you buying for Hadoop in terms of your clusters," he said. And that is a challenge because there are no standards or "blueprint" for deployment.
"If [channel] companies, being the providers of infrastructure and technology, can come up with a blueprint to say you will need x amount of clusters and this many nodes in each cluster for this type of data, and how to do that from a technology perspective, that will give clients a lot more confidence to move forward," Krishnan said.
Once organizations move beyond deployment, they face a new challenge associated with systems administration and operations. "When you have the systems up and running, who keeps them up and running? How do you maintain or grow those clusters? The question is increasingly around 'How does this integrate with what I have today?' It's all encompassing with IT," Gartner's Heudecker said.
Consultant McKnight agreed that managing the big data ecosystem and integrating it is both a challenge for businesses and an opportunity for channel companies. "A lot of companies get into big data projects thinking they can sit in isolation and won't need relational data, but sooner or later they do, because that's where the majority of data exists, and there needs to be integration. Then we find out that the big data architecture was not built to enterprise standards and can't integrate," he said.
Furthermore, the technologies themselves require programming expertise that many businesses lack today. "These newer technologies to deal with big data are very programmer-centric as opposed to plug-and-play like we've [gotten] used to with tools in our legacy environments, so they require a lot of Java. A lot of companies have pushed that skill set off because they didn't need it, and now they do," McKnight said.
An opportunity largely untapped
The business opportunities afforded by big data analytics are further underscored by the lack of channel companies seizing them. "A lot of companies are looking to conduct big data projects and some of them are looking for help, but it is taking a while for the companies conducting the consulting to develop and mature, and it's taking a while for the service providers to develop as well," Gartner's Heudecker said.
For many IT channel companies, this means moving beyond the product sale and taking advantage of the service and consulting opportunities -- something they may be unaccustomed to. "There is demand, but the channel providers are not looking beyond the sale," Heudeker said. "Channel providers must push to the next realm, which is to say, provoke thinking and make sure customers understand they can do this work. Until the channel providers make this behavioral change, they cannot satisfy the demand. But the demand is there, absolutely."
This was first published in December 2013