Big Data Next:
Capturing the
Promise of Big Data
The decade of big data is here. Ninety percent of all of the world’s data
has been created in the last two years, buoyed by the rapid growth of the
Internet of Things and mobile devices. Data collection, storage and analysis
costs have plummeted. Now, entire industries are turning to data-generated
insights to gain a competitive advantage.
The future of big data holds an even greater
promise to expand insights for the largest
industries and solve some of the world’s
most complex problems. SVB Analytics, in
conversations with big data developers and
users, including our clients, is identifying the
best opportunities for innovators, enterprises
and investors in the next phase, which we call
Big Data Next.
The value of data-driven insights grows as
infrastructure costs decline and analytics improve.
Global Internet traffic is exploding and the cost of big data infrastructure
is dropping.
The demand for data scientists tripled in three years.
The amount of data collected is growing exponentially, and the costs for processing and storing these huge quantities are dropping. These two trends are creating more powerful use cases for big data. At the same time, demand for skill sets to use big data in practical applications is growing, as enterprises seek to leverage data for competitive advantage. Venture investments in big data are quickly accelerating, and changing focus.
Increase in Internet traffic by
petabytes, 1995-2014.1 Decline in average storage costs per gigabyte, 1990-2014.2
Decline in computing costs per
1MM transistors, 1990-2013.3 Decline in Internet transit prices per Mbps, 1998-2013.4
30,000X
$11K to 3 cents
$527 to 5 cents
$1.2K to 63 cents
Postings that include terms data scientist, data architect, data engineer, big data
0 0.4 0.6 0.2 2009 2008 2007 2006 2005 2010 2011 2012 2013 2014 2015
3X
Overall data job growth, 2006-2015
5 Percentage of matching job postingsVenture investments in big data analytics companies, 2004-20146 # of Deals Invested Capital ($B) $ 0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 0 100 200 300 400 500 600
Venture investment growth:
big data analytics vs. B2B, 2009-20147
1800% 1500% 1200% 900% 600% 300% 0%
B2B IC Growth Big Data IC Growth 2009 2008 2007 2006 2005 2004 2010 2011 2012 2013 2014
Big data is driving big values, signaling expectations of large returns.
Invested capital multiples for big data companies exceed those for all technology
companies.
Invested capital multiples: big data analytics vs. all tech companies8
90th % (big data) 75th % (big data) 50th % (big data) 25th % (big data) 10th % (big data) 50th % median (all tech) 0x 20x 15x 10x 5x
Invested Capital (Pre-Financing)
Big data 2.0 is driving action and value across
many industries.
How the big data alchemy process works.
Think of the evolution of big data as a 21st century alchemy process, turning data from “digital exhaust” to “digital gold.” Big data 1.0 had limited inputs and analytical tools, held back by high costs. The end result was narrowly focused insights of limited value to specific industries. Big data 2.0 features sensors and connected devices that are vastly expanding the capture of data as infrastructure costs are dropping. These trends, combined with improved analytics, are producing powerful cost-effective use cases for big data across many industries.
INFRASTRUCTURE
ANALYTICS ANALYTICS
DATA MANAGEMENT
Storage is commoditized and costs drop. IoT bridges physical & digital worlds, creating data explosion.
Computing power and speed increase. New data-driven insights lead to broader adoption.
DATA MANAGEMENT INFRASTRUCTURE
Big Data 2.0
Big Data 1.0
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Big data 2.0 has applications for many industries, particularly as technology
enables more data capture and analysis.
Big data alchemy across industries
Financial Services
Energy
Healthcare
Travel & Hospitality Retail
Cybersecurity
Advertising
Agriculture
Turn targets ads to consumers through multichannels based on real-time data.
• Real-time audience data in a single dashboard (1st, 2nd, 3rd party)
• Segment and target prospects where and when it matters
• Deliver the right message on the best media channel at the right moment in time • Result: Increased ROI
Pindrop Security identifies potential fraudsters by analyzing caller attributes and linking to fraud databases.
• Combines authentication and anti-fraud detection technology to verify legitimate callers while detecting malicious callers • Ability to determine a caller’s true location
and calling device and match them to Pindrop fraud database
Sight Machine uses sensors to collect data to maximize operations in real time.
• Big data solution for manufacturers • Platform collects data from sensors,
automation systems and other factory systems, analyzes it and delivers insights in real time
• Structured and unstructured data transformed into actionable reports
Key use cases driving big data adoption across industries
SVB Big Data Maturity Index: Finding opportunities
for growth
SVB Analytics created the SVB Big Data Maturity Index to analyze the pace of development of big data adoption across industries. We looked at three attributes that impact adoption: regulations on data collection, ease of data capture and level of technology integration and ranked whether these attributes enhanced or impeded adoption for each major industry.
The higher the overall score indicates more developed adoption but that leaves a smaller opportunity for growth. The lower the score indicates underdeveloped data adoption but that leaves a
bigger opportunity for growth, especially if it is a large industry.9
Developed
Big Data Adoption Attributes
Enhances Neutral Impedes
Underdeveloped
Industry Level of Regulatory Oversight
Ease of Data Capture
Level of Technology
Integration Maturity Index
Advertising 3 3 3 3.0
Travel & Hospitality 3 2 3 2.7
Cybersecurity 2 2 3 2.3 Retail 3 2 2 2.3 Energy 2 2 1 1.7 Healthcare 1 1 2 1.3 Financial Services 1 2 1 1.3 Agriculture 2 1 1 1.3
U.S. market size vs. SVB Big Data Maturity Index
10 Industry value ($B)Big Data
underdeveloped developedBig Data
$1400 $1200 $1000 $800 $600 $400 $200 $-Maturity Index
Large market size/
Underdeveloped Large market size/Developed
1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0
Financial Services Healthcare
Small market size/
Underdeveloped Small market size/Developed
Retail Energy
Agriculture Cybersecurity HospitalityTravel & Advertising
Large industries have significant untapped value in big data adoption.
How big data adoption impacts VC investment.
Venture investments are flowing from smaller market, more developed users of big data (advertising) to larger market industries (healthcare) that are only beginning to leverage big data infrastructure development of the last decade.
Complex large-market
industries, including financial services and healthcare, are underdeveloped when considering the potential big data adoption has for significant disruption and value creation. Big data strategies in these sectors have been slowed by difficulty of data capture and level of regulation.
Distribution of venture capital deals by stage, 2008-201511
Advertising Big Data: Developed
100% 80% 60% 40% 20% 0% 100% 80% 60% 40% 20% 0%
Healthcare Big Data: Underdeveloped
Early Mid Late Early Mid Late
Big Data Next: The alchemy process reimagined
As data infrastructure, management and analytical tools become commoditized and more commonly
adopted, the value will shift back to the data. Owning or gaining access through partners to proprietary data, which is protectable and non-replicable, will be vital to maintain a competitive advantage.
With the advance of machine learning, we are poised to see increasingly valuable insights derived from data and applied with profound results. The innovations of Big Data Next will enable game-changing advancements that are difficult for us to imagine right now.
Public or shared
private data Proprietarydata
ANALYTICS DATA MANAGEMENT INFRASTRUCTURE
Big Data Next Big Data 2.0
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The highest value will belong to proprietary data that can generate real-world solutions.
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About Silicon Valley Bank
For more than 30 years, Silicon Valley Bank (SVB) has helped innovative companies and their investors move bold ideas forward, fast. SVB provides targeted financial services and expertise through its offices in innovation centers around the world. With commercial, international and private banking services, SVB helps address the unique needs of innovators. Forbes named SVB one of America’s best banks (2015) and one of America’s best-managed companies (2014).
SVB Analytics provides strategic advisory, research and valuation services.
Learn more at svb.com/svbanalytics.
1 Dr. William P. Norton 2 The Wayback Machine 3 The Wayback Machine 4 DrPeering.net 5 Indeed.com 6 Pitchbook 7 Pitchbook
8 SVB Analytics proprietary data 9 SVB Analytics proprietary data
10U.S. Department of Commerce, Gartner, eMarketer 11Pitchbook
