’Big data’ lead to business paradigm shift

By Yoon Ja-young

Information is power. Businesses have always actively collected information on customers and their behavior, both online and offline, and they are continually interpreting a flood of information.

Multimedia content is constantly increasing. High-definition video, for instance, accounts for over 50 percent of the traffic on the Internet. Personal digital media facilitate and accelerate the production of information by individuals, leading to an explosive and unstoppable growth of data. All these phenomena lead to an era of “big data,” which is providing businesses with new opportunities.

Ryu Sung-il, a researcher at KT Economic & Business Institute, points out that big data is different from the information overload of the 1990s, a concept suggested by futurist Alvin Toffler. “Most particular is the diversification of data. In the past, information was objectified or was created by a small number of producers, but the increase of personalized information is notable in the current data explosion. It includes wide-ranging details such as the location, condition and emotion of individuals,” Ryu noted in a report.

The advancement and accessibility of personal devices, equipped with diverse smart sensors such as the global positioning system (GPS), generates information, such as the location of the individual on a real-time basis. Social networking services also make it easy for individuals to produce information. According to a report by McKinsey, 30 billion pieces of content are shared on Facebook each month.

Ryu points out that technological progress enables an analysis of massive data. “Previously, on top of the technological limitations in computing, there were limitations on the storage of data… Now, it costs only $600 to buy a hard drive to store all sorts of music from around the world.”

Cloud technology has also contributed to the analysis and storage of massive data. Much of the data would have been made useless without proper storage. Solving this, cloud computing and cloud technology also made information processing possible. Now that the data has reached a peak high enough to derive value from the mountain, Ryu said, corporate success will be determined by those who scale the summit first.

Business paradigm shift

The researcher says that in the era of big data, one can seek new business opportunities by analyzing data from social media, which is full of personalized information. For example, one could surmise a negative outlook on the fisheries industry from the negative comments on fisheries on social networking services the day after the radioactive leak at nuclear power plants in Fukushima, Japan. Google provides information on influenza epidemics by time and region, based on the keyword search statistics, and the analysis comes much faster than official announcements from the U.S. health authorities.

In terms of sales, Sean Chae, a researcher at Samsung Economic Research Institute, says social networking services also enable businesses to set up an effective marketing tool.

“Consumers trust information provided by professional consumers or their colleagues in the community more than those offered by businesses. By analyzing the information flow in social media, they can reach their potential customers and the community they belong to more directly,” Chae said in a report.

According to Ryu, the life log based on an individual’s postings on blogs, social networking services as well as sensors like GPS on smartphones, which tells where one has visited and shopped, works like a spotlight as they enable businesses to offer tailored services for individuals.

The analyses of big data make new services and products possible. For example, there are some applications that can match the title and information of the song when one hums a few notes on the microphone. Such services have become a reality because it has become possible to record and analyze the sound data of virtually every song ever sung.

The analysis of big data is opening up business opportunities for non-IT sectors as well. Aviva, a U.K. insurer, for instance, launched its “Pay-as-you-drive” insurance product, offering insurance premium discounts for motorists who don’t drive much in traffic jams or accident-prone locations. The insurer was able to offer the product as it could analyze the motoring data of individuals.