This guest post is written by Dana Porter, Head of Global Marketing at Amdocs, a provider of customer experience systems and services.
Some industry terms strike such a chord – for reasons good or bad – that they become catchphrases used so broadly that it’s hard to remember what they originally stood for. "Convergence" is one of those terms, from a few decades back. I would submit that "big data" is another (like "cloud" before it).
But overuse shouldn’t obscure the fact that the intelligent use of big data is of vital importance to communications providers – be they mobile, cable, satellite or fixed-line – as they confront the challenges of meeting the demands of today’s "always-on" consumer.
According to the Cisco® Visual Networking Index (VNI) released last May, there will be 1.3 zettabytes of IP traffic by the end of 2016 (a zettabyte equals 1021 bytes – that’s 21 zeros!). And a recent TM Forum report, "Big Data: big volume, big payback and big challenge," notes that data is growing at a compound annual growth rate of 29 percent over the past five years – and "is likely to continue to grow at a double-digit rate in the future."
Storage costs rising
The first challenge resulting from this growth is the operational aspect: how can service providers manage all of this data? Where will they store it, how can they secure it and how will they back it up? The reality is that without a significant change in their approach to data and operations in general, service providers will realize that the economics of the business simply don’t add up.
Although the cost to store a gigabyte of data is declining, data usage is increasing to such a degree that the hardware spend required to keep up with that demand is actually continuing to rise. According to Barclay’s Capital, data stored by businesses is expected to increase by 42 percent in the five-year period finishing in 2014, which will cause storage spending by those organizations to increase by nine percent during that same period. So as service providers look at their operational environment, we can expect to see an increasing focus on architecture, and applications and systems that are Big Data-aware.
But we’re still in the early stages. After years of struggling to capture and manage growing data volumes, service providers across the globe are now starting to realize that although Big Data is an operational challenge, it is also potentially a great business opportunity.
We’ve already seen several examples in the service provider industry.
Telefónica UK recently launched Dynamic Insights, a global Big Data business unit. Smart Steps, Dynamic Insights’ new app, helps track crowd movements in specific areas, with the ability to query details such as gender, while blocking knowledge of specific users (to uphold privacy standards). This information has already been used to help determine optimal locations for retail stores.
Telenet in Belgium is using predictive analytics for a more targeted customer approach, by analyzing specific details about customers and providing the insight to sales personnel. Telenet used its large amount of historical customer data to turn its customer care call center into a key part of the company’s business. Sales following a customer call doubled within six months after applying these new methods.
Amazon is of course one of the pioneers in the broader business environment in terms of analyzing data and driving predictions, but Amazon CTO Werner Vogels notes that a holistic, total approach is necessary for success. "Big data is not only about analytics, it’s about the whole pipeline. So when you think about big data solutions, you have to think about all the different steps: collect, store, organize, analyze and share," said Vogels.
What it means for service providers
Big Data is a chance for service providers to regain the lead in customer experience by building operations that are ready to capture data and adding analytics to offer proactive and contextual experiences. (And as we saw from the Consumer Electronics Show in Las Vegas a few weeks ago, the advent of sensors and context-aware smart chipsets and devices is making the experience a much bigger part of the mix). As they learn more about users' behaviors and tendencies, service providers will be able to create new monetization opportunities while pleasing their end customers.
And that will truly be something big.
Dana Porter is head of global marketing at Amdocs (www.amdocs.com), a provider of customer experience systems and services. She is responsible for developing Amdocs’ vision, delivering strategic insight to customers and bringing Amdocs' products, services and solutions to market.