Why only one of the 5 Vs of big data really matters
The term “big data” remains difficult to understand because it can mean so many different things to different people. Your understanding will be different if you look at big data through a technology lens, versus a business lens or industry lens.
Essentially, big data (though not a great descriptor) refers to two major phenomena:
- The breathtaking speed at which we are now generating new data
- Our improving ability to store, process and analyze that data
To describe the phenomenon that is big data, people have been using the four Vs: Volume, Velocity, Variety and Veracity. Before I do that, I want to make the important point that all this data and our ability to use it is no good unless we can turn it into Value, which is my fifth V of big data.
Here are the 5 Vs of big data:
- Volume refers to the vast amount of data generated every second. Just think of all the emails, Twitter messages, photos, video clips and sensor data that we produce and share every second. We are not talking terabytes, but zettabytes or brontobytes of data. On Facebook alone we send 10 billion messages per day, click the like button 4.5 billion times and upload 350 million new pictures each and every day. If we take all the data generated in the world between the beginning of time and the year 2000, it is the same amount we now generate every minute! This increasingly makes data sets too large to store and analyze using traditional database technology. With big data technology we can now store and use these data sets with the help of distributed systems, where parts of the data is stored in different locations, connected by networks and brought together by software.
- Velocity refers to the speed at which new data is generated and the speed at which data moves around. Just think of social media messages going viral in minutes, the speed at which credit card transactions are checked for fraudulent activities or the milliseconds it takes trading systems to analyze social media networks to pick up signals that trigger decisions to buy or sell shares. Big data technology now allows us to analyze the data while it is being generated without ever putting it into databases.
- Variety refers to the different types of data we can now use. In the past we focused on structured data that neatly fits into tables or relational databases such as financial data (for example, sales by product or region). In fact, 80 percent of the world’s data is now unstructured and therefore can’t easily be put into tables or relational databases—think of photos, video sequences or social media updates. With big data technology we can now harness differed types of data including messages, social media conversations, photos, sensor data, video or voice recordings and bring them together with more traditional, structured data.
- Veracity refers to the messiness or trustworthiness of the data. With many forms of big data, quality and accuracy are less controllable, for example Twitter posts with hashtags, abbreviations, typos and colloquial speech. Big data and analytics technology now allows us to work with these types of data. The volumes often make up for the lack of quality or accuracy.
But all the volumes of fast-moving data of different variety and veracity have to be turned into value! This is why value is the one V of big data that matters the most.
Value refers to our ability turn our data into value. It is important that businesses make a case for any attempt to collect and leverage big data. It is easy to fall into the buzz trap and embark on big data initiatives without a clear understanding of the business value it will bring.
Big data can deliver value in almost any area of business or society:
- It helps companies to better understand and serve customers: Examples include the recommendations made by Amazon or Netflix.
- It allows companies to optimize their processes: Uber is able to predict demand, dynamically price journeys and send the closest driver to the customers.
- It improves our health care: Government agencies can now predict flu outbreaks and track them in real time and pharmaceutical companies are able to use big data analytics to fast-track drug development.
- It helps us to improve security: Government and law enforcement agencies use big data to foil terrorist attacks and detect cyber crime.
- It allows sport stars to boost their performance: Sensors in balls, cameras on the pitch and GPS trackers on their clothes allow athletes to analyze and improve upon what they do.
The applications of big data are endless. Every part of business and society will soon change due to the fact we now have so much more data and the ability to analyze it.
We must be sure to never forget the fifth V: Value. How will big data benefit you and your organization? Without that starting point organizations will drown in their data while thirsting for the benefits.
For more information, check out my latest book: Big Data - Using Smart Big Data, Analytics and Metrics To Make Better Decisions and Improve Performance. Read a free sample chapter today.