• BY GEORGE MATHEW, ALTERYX
• 12.23.13
• 3:02 PM

Old-school Big Data: A huge disk from the c1967 Atlas Disc file. Will analytics eat the world in 2014? Have your say below. Image: dullhunk/Flickr

 

As 2013 is quickly coming to a close, I return to Marc Andreessen’s seminal thesis that Software is Eating the World. It amazes me to see how much analytics is the metabolic agent driving this shift. Whether analytics is explicitly emphasized in your company’s DNA or it’s invisibly embedded into your business processes; it is the defining value driver of our generation. For industries and firms that embrace this reality, the rewards will be disproportional. To those who don’t make the shift to a data-driven culture: you will be left behind.

Recently, Bain & Co surveyed executives at more than 400 companies around the world (most with revenues of more than one billion dollars). It found that only four percent of companies are really good at analytics, an elite group that puts into play the right people, tools, data and willpower into their analytic initiatives. This elite group is already using insights to change the way they improve their products and services. And the difference is already quite stark:

• Twice as likely to be in the top quartile of financial performance within their industries
• Three times more likely to execute decisions as intended
• Five times more likely to make decisions faster

Industrial Reinvention

Cutting-edge analytics has been integral for the consumer Internet (e.g. mobile gaming). Going into 2014, the reinvention of mainstream industries is where the substantial breakthroughs are occurring:

• In automotive sector, we see both the emphasis on the culture of analytics at Ford (the only one of the big three that didn’t go through bankruptcy) and in the state-of-the-art in embedded analytics in the Tesla Model S.
• While Blockbuster shuts down their last retail location in 2013, Redbox is witnessing hyper-growth in their brick-and-mortar DVD rental model through predictive modeling of consumer behavior.
• As healthcare industry’s payer/provider model undergoes systemic reformatting, the smart players are already making game-changing moves. Kaiser Permanente is blending various data sources to improve enrollment and primary care. Colorado Hospital Association is modeling future impacts of Obamacare as it is (slowly) rolling out. Cardinal Health is optimizing the efficiency of their product distribution to hospital networks.

2014 Predictions

The industry examples mentioned above are just a thin sliver of this enormous watershed. My fundamental belief is that if you are not already ‘moneyballing’ your respective industry, someone is else is already doing it. Some of the drivers that will come to bear in 2014 include:

• Analysts will matter more than data scientists. There are more than 2.5 Million data analysts in line-of-business functions serving the analytic needs of firms. As much as we wish data science will solve all the world’s analytic problems; there simply aren’t enough data scientists to go around. At the same time, software providers need to answer the call for providing better tools to support the current generation of analytic minds that are destined to change the world.
• Hadoop moves from curiosity to critical. Hadoop is quickly becoming the general-purpose compute infrastructure for storing well … everything. You can already see this in all the new engines such (e.g. OLTP, real-time, graph, and search) that are already being supported by the Hadoop community.
• Big Data brings its A-game in marketing. Analytics will have another big year in the Marketing Department influencing advertising, promotions, and consumer behavior. Specifically, sports marketing will put enormous advertising budgets in play as the World Cup in Brazil and the Winter Olympics in Russia.

The New Guard in Analytics

As the 2014 predictions play out, the need for a purpose-built analytics experience is never more real. It is also clear that yesterday’s software was not built for today’s analytics needs:

• We should never have to worry about the source or shape of the data that is in the hands of data analysts. We should be able to easily blend data across structured, unstructured, and semi-structured sources seamlessly.
• We should not be dealing with clumsy, 40-year-old programming languages (you know who you are), instead using the sleek, modern algorithms represented in R and Julia.
• We should not have to deal with unwieldy reporting and dashboard platforms, but treat every data interaction with the ease and visual grace of Tableau.

This is now playing out the financial outcomes in the analytics software market. Yesterday’s mega-vendors are seeing their growth slow to three to eight percent annually. The new guard with Alteryx, Cloudera, Tableau, and others are growing 30-80 percent annually mainly by disrupting their comparable mega-vendors. Clearly, 2013 is ending with a groundswell of analytic users voting for change with their wallets. This will only continue to accelerate, as Marc’s perspective on software becomes prophecy. As we enter 2014, I’m just thrilled to be working on mainstreaming analytics (the main course) as it drives the generational shift of our times.

George Mathew is president and COO of Alteryx. He is on Twitter @gkm1.