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Oracle: Getting a Grip on Big Data You may have heard the term “Big Data” and wondered just what it means. Consider this: every day, the people and systems of the world generate 2.5 quintillion bytes of new data (that’s 2.5 billion gigabytes). Last year, that added up to about 1.8 zettabytes of information. A zettabyte is a trillion gigabytes. If you can’t wrap your head around these numbers, let’s just say that they are huge. If you were to put all that data on good old CD-ROMs, every person in the world would have 353 of them annually. If you stacked all 2.47 trillion CDs on top of one another, it would create a stack tall enough to go to the moon and back four times (and you thought you had storage problems). This is Big Data. The amount of data that we humans and our beloved machines generate has been growing exponentially. Consider that if every word uttered by every human being who ever lived were written down and digitized, it would only equal two days’ worth of the data that is being generated at today’s rate. Of all the information that is stored today, 90 percent of it was created in the last two years alone. And of course, the data explosion isn’t slowing down. By 2020, the amount of data generated every day will increase 20 times. Just where does all that data come from? Consider that every Google search, Facebook status update, YouTube video, text message, and purchase transaction generates data. There are now 9 billion devices connected to the Internet; by the end of the decade, there will be 50 billion. Beyond just mobile devices and laptops, the number of smart machines that are talking to other smart machines is rapidly adding to the mass of connected devices. Utility meters, vending machines, appliances, automobiles, surgical devices, heavy industrial equipment, and even pets and shoes are now stuffed with technology that allows them to automatically collect consumption data and relay that information to the manufacturers, companies that own the systems that connect the machines, or any company that is willing to pay for such data. Big Data: A Blessing and a Curse This tsunami of data surging over corporations of all shapes and sizes is widely considered to be the most important issue in corporate strategy today. Ginni Rometty, CEO of IBM, recently predicted that Big Data will be the primary basis of competitive advantage in the future, calling it “the next natural resource.” She thinks it will change how decisions are made, how value is created, and how value is delivered. Angela Ahrendts, CEO of Burberry, agrees. “Consumer data will be the biggest differentiator in the next two to three years. Whoever unlocks the reams of data and uses it strategically will win.” But harnessing and making sense of all this data is easier said than done. For decades, companies have made based on data they’ve gathered from their own transactions and stored in relational databases. When a company designs its own databases, the information is organized and structured. However, the flood of data from new sources, many of which are external, is much less structured and often incompatible with a given company’s own data systems. For example, how do you store a photo, a sound bite, a video clip, or a Facebook status update in a way that it can be combined with other data and mined for useful insights? Most companies are simply overwhelmed by Big Data. It’s challenging enough to get up to speed with data as it exists today, much less prepare for the increases in tomorrow’s data flows. Companies need guidance from experts who can do most of the heavy lifting in gathering and making sense of all that information. They desperately need help in gleaning Big Data insights that will put them ahead of the competition in making decisions that will win with consumers, vendors, and partners. Oracle to the Rescue That’s where Oracle comes in. Oracle has specialized in computer hardware and software products since 1977. Now the third-largest software maker (behind Microsoft and IBM), Oracle builds database management, resource planning, customer relationship management, and supply chain management systems. All this expertise, plus the visionary leadership of founder and CEO Larry Ellison, has moved Oracle to the forefront of gathering, organizing, and analyzing Big Data. Oracle claims that it “offers the broadest and most integrated portfolio of products to help you acquire and organize these diverse data sources and analyze them alongside your existing data to find new insights and capitalize on hidden relationships.” Oracle’s portfolio includes software, platform (the architecture that connects software to hardware), and hardware products. According to Bob Evans, Oracle’s chief communications officer, “Oracle is the only tech company on Earth that has a full line at [each of these] levels.” Oracle’s portfolio of products is immense and includes database products that allow databases to collect, connect, integrate, and analyze. Its hardware systems include server products as well as Big Data appliances that are engineered to optimize all of Oracle’s software products, as well as products from external sources. With its completely integrated systems, Oracle can provide unique benefits to companies that other Big Data companies simply can’t match. In the oil, gas, and mining industries, new machine-to-machine devices are being used to track exactly what’s going into and coming out of each mine, reducing losses and maximizing profits. In the transportation industry, devices in shipping containers can monitor a shipment throughout its journey, keeping track of things like temperature, humidity, and even whether or not the container has been opened. And in the mobile services industry, virtual wallet services that let people pay for transactions with their phones are expanding rapidly and putting the capability in smartphones as well as traditional-feature phones. Oracle is at work in each of these situations, with expertise that lets clients gather and transmit data from enabled devices to systems that analyze the data in ways that provide better customer outcomes and maximize profits. As an indication of Oracle’s Big Data leadership and innovation, many of the products the company is now introducing to handle Big Data were designed well before terms such as “cloud computing” or even “Big Data” were being used. For example, the design of Oracle’s Fusion applications—software suites designed to handle data management across corporate areas ranging from supply chain to human resources to customer relationship management—began in 2004. And Oracle began developing its most recent database product in 2007. Yet both of these products lines are optimized for the cloud, and both can be used on-site or over the Internet. As another example of visionary development, Oracle’s software-based enterprise applications have built-in social media capabilities. According to Abhay Parasnis, senior vice president of Oracle Public Cloud, “Oracle’s social relationship management capabilities bring social into everything and can light up our core large object applications with social capabilities.” No other company even attempted to do this, and it puts Oracle on the leading edge of pushing the industry to deliver the customer value benefits of social media. Fighting for a Piece of the Pie The recent developments in Big Data have sparked a frenzy of competitive activity. Massive competitors such as Microsoft, IBM, and Dell are all grabbing for a piece of the Big Data pie, and a deluge of start-ups such as Hadapt, Precog, and Platfora are joining the fray. Oracle threw fuel on the fire with the recent release of its Sparc T5 server series. Oracle CEO Larry Ellison framed the advantages of the Sparc line this way: “You can go faster, but only if you’re willing to pay 80 percent less than what IBM charges.” Facing Oracle’s new line of faster and cheaper products, Colin Parris, general manager for IBM’s Power systems, quickly downplayed the advantages of faster machines. He suggested that the race for faster processors is a thing of the past. Instead, today’s companies are much more concerned about reliability, security, and cost effectiveness. But considering how fast the Big Data world is moving, the speed advantage has real-world applications for executives who want to accelerate internal operations, make better decisions, and engage customers more intimately. When processes that formerly took weeks can be accomplished in just days, it provides competitive advantage in numerous ways. Despite Oracle’s apparent sizable lead in the race to dominate Big Data, the data giant faces challenges. For starters, many companies large and small are finding that they can fulfill their Big Data needs more efficiently by using cheap hardware and open-source software. For example, years ago when Google faced the problem of indexing the Internet for its search engine, it built a huge database system comprised of cheap hardware and internally developed software that got the job done. And Google isn’t alone. Additionally, in the past eight quarters, Oracle has missed its financial goals three times. That’s hard for Wall Street to swallow. Although Big Data represents only a portion of Oracle’s overall business, many analysts observe that many of the big innovations are happening at smaller, more nimble companies. Thus, many talented employees are jumping ship from the big developers, leaving the likes of Oracle with high turnover and less innovative minds. So although Oracle has the expertise and products to tackle today’s Big Data needs, it also has its work cut out for it. However, even as the young and nimble start-ups nip at Oracle’s heals and the other big dogs fight for positions on the Big Data porch, there is little question that no other single company is better poised to help companies use Big Data to optimize marketing opportunities. Questions for Discussion 1 Discuss ways that Oracle could provide clients with the ability to form better relationships with customers. 2 Discuss the similarities and differences between Big Data and the more traditional marketing research concepts found in Chapter 4 . 3 Does competition from small start-ups really pose a big competitive threat to Oracle? Explain why or why not. 4 From a consumer point of view, what are some of the downsides to the developments in Big Data? 5 In the future, will consumers be more concerned about these downsides or less?