Big firms can negotiate better pricing, better terms and other arrangements that smaller companies cannot match. However, lower costs of entry for many types of technology effectively remove the benefits of scale and provide opportunities for small companies. An area of technology that’s now in reach of smaller companies is big data, specifically analytics platforms that churn through large data sets to uncover insights.
Smaller organizations are embracing big data analytics because they need to stay competitive. They need additional context to make business and marketing data-based decisions. The owners and managers of small businesses can still trust their gut instincts and make bold moves, but they should do this with an understanding of the underlying data and trends. Bigger companies naturally produce more data. Amazon, for example, possesses massive amounts of site, transactional, partner and other types of data. They use powerful analytics tools to examine all this data to find unexpected correlations and new opportunities. Smaller companies can (and should) realize similar gains from their data.
Affordable and User-Friendly
The falling costs of powerful analytics tools are helping to close the economies of scale gap between large and small companies. The design of the tools themselves has also markedly improved. They feature simpler user interfaces that allow people with only basic technical knowledge to create insightful analytics reports. Small businesses are hard pressed to pay an in-demand data scientist $200,000 a year, so they need tools that are accessible to staff that don’t possess specific data training.
Google Analytics is frequently the first data analytics solution for a small business. The service is free for any firm with under five million impressions a month, and otherwise the “360” version costs $150,000 a year. The free version is sufficient for the majority of small and medium-sized businesses and provides valuable insights on all facets of the company. For example, website traffic data helps small business owners to better understand their customer demographics and segments. They can use these metrics to determine year-over-year growth rates and make better and more informed decisions because they understand their customers on a deeper level.
There are many other analytics platforms that are available to users, with some offering “freemium” models and others providing companies with powerful analytics at very reasonable costs. Some of these are open source-based tools, using platforms such as Apache Spark. Other freemium model analytics platforms include MixPanel, which offers more complex online behavioral metrics, and Flurry, a tool for looking at app-based data. Even if a small business needs to pay for a tool, the costs are typically low, especially when compared to the benefits the company can reap from using the data.
Protecting the Investment – Backing up Big Data
A persistent challenge for small businesses that are using big data is figuring out where to store all of the information. As the volume of analyzed data grows, so does its importance to the organization, as well as the downside risk if that data disappears. Managers at small businesses starting out with big data will quickly find they’re dependent on the resulting insights, and must protect the information if they want business growth to continue.
Despite its impressive storage capabilities and new improvements made to the technology, tape is still limited in usefulness. It requires manual functions to back-up to the tape, as well as physical transport and storage by an outsourced firm. Linear tape holds data differently than external hard drives. It’s prone to deterioration and affected by environmental conditions and fluctuations.
Even the smallest business is likely generating multiple streams of information that need organization and safeguarding. The best solution for protecting big data is to back it up to the cloud. The cost of cloud storage has fallen recently in a similar fashion to analytics platforms and is now accessible for companies of any size. With cloud storage, you remove the risks of physical tape-based methods.
For extra protection, firms should use a trusted cloud provider in addition to performing their own manual backups to external hard drives. These should be stored offsite and away from the office – meant to provide the company with a “just in case” backup in the incredibly unlikely event the cloud provider experiences a failure and loses your company’s data.
Small businesses that aren’t using big data risk falling behind other growing organizations and could lose current customers modernizing alongside the technology. Free data analytics tools could be finding interesting trends in customer behaviors, providing insight into a hot-selling product, or highlighting a demographic characteristic they can further explore. Thankfully, the costs of big data analytics platforms have fallen along with a corresponding rise in their usability and accessibility. These factors combine to effectively level the playing field, so the small players can leverage technology in the same ways as the big players.
About the author: David Zimmerman, CEO of LC Technology International, Inc., has been in the hardware/software industry for over 30 years, specifically in the data recovery software market for 18 years.
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