Unlocking New Value from Data Deluge
Sanjay Rohatgi, Managing Director, Service Provider, Cisco India & SAARC
By connecting to the internet through the smartphone to update online status on Facebook and twitter besides viewing and uploading photos on YouTube, people today access data and generate it online multiple times in a day. According to the 2012 Cisco Connected World Technology Report (CCWTR), there is an upcoming data deluge because 94% of GenY likes to upload photos online, 73% upload videos to share or store in internet sites and 75% have twitter accounts. Undoubtedly, tremendous amount of data is being generated by the escalating consumer demand for connectivity and real time access to content through smartphones and other personal devices which aid connectivity.
Benefit and opportunity
All of the data generated percolates through the Service Providers (SPs), who play a crucial role in studying, analyzing and sieving this seemingly arbitrary data to make sense of it and benefit from the business opportunity thereof. To cite an example, consider Facebook which reports that its users register 2.7 billion likes and comments per day. This magnitude of data can be intimidating to keep up with, much less sort, analyze, and extract value from. Service providers who can view far and wide across the network can collect this data, analyze it and convert it to meaningful useful information. When such "crude" data is extracted, refined, and piped to where it can impact decisions in real time, its value will soar. Called Big Data Analytics, this is a new monetization opportunity that SPs can bank on.
Like analytics, service providers benefit from Wi-Fi solutions, which help reduce the pressure of data load on the network. Growth in mobile network traffic is staggering; Driven by the onslaught of devices that are now connected to the Internet, mobile data traffic is expected to grow three times faster than fixed IP traffic, exceeding six exabytes per month by 2015, according to the Cisco Visual Networking Index. As the use of Wi-Fi for Internet access explodes, more mobile devices become Wi-Fi-enabled, number of public hotspots expands, and user acceptance grows, SPs are presented with a tremendous opportunity to invest in Wi-Fi services to create carrier-class Wi-Fi experience and increase revenues.
As an example, consider the case of a multinational grocery and general merchandise retailer which was able to successfully penetrate and compete in a dominant market using an innovative Wi-Fi strategy. The retailer installed a whole digital shopping market within a subway system where pictures of the products were placed systematically on the walls of the station just like a grocery store. Consumers could point their camera smartphone to order consumer durables via Wi-Fi and receive the delivery by the time they got home!
Clearly the scope of data analytics will continue to grow in terms of the variety, velocity, or volume of data involved. Today, most SPs find themselves in the first evolutionary wave, where data and analytics are siloed within specific business processes and cannot establish a consistent view of the customer and to coordinate Big Data activities across the company. Therefore some SPs have begun to explore creating data analytics offers that could be sold externally to create new sources of revenue. As broader sets of information are collected and analyzed, they can result in better decision making and action. But the greatest value comes when data is collected, shared, and processed across an entire ecosystem. Enterprises can enrich their own data with a myriad of third-party data to create new value for themselves and their customers.
As they consider their value proposition externally, SPs' networks provide a critical asset. While they already have access to volumes of data, with their view of the network, SPs can provide context to customer behavior and assist businesses in taking network-impacting action based on that data. By adapting their corporate culture, building a coherent Big Data governance structure, embracing experimentation, SPs can build trust as a "data keeper" (or data manager) with their customers.
In last few years there has been proliferation of hotspots across café outlets, airports, shopping malls and they continue to grow, Wi-Fi will become a major "hotspot" that will help SPs grow their business. Of course operators are likely to face challenges of site acquisitions, backhaul and higher Opex till the model becomes optimized. Therefore understanding operational implications, developing a comprehensive, Wi-Fi strategy that can evolve with changing market conditions and identifying the true benefits through pilot programs SPs are critical to gain success.
As the growth in data increases, service providers will need to offer personalized, differentiated services in order to attract customers, build loyalty, and increase revenue from existing customers. With the traditional sources of revenue generation changing SPs need to make the most of Wi-Fi and Big Data analytics which offer new monetization opportunities.
By taking advantage of the intelligence inherent in the network, including policy, hyper-location, context, application, and device information for extracting logical meaning, it is possible to increase SPs' revenue and market share through subscriber retention. A leading hotel chain for example was able to enhance revenues by 8 to 10 percent by analyzing customer segmentation data, while a courier company achieved real-time visibility into shipping and consumer data across more than 46,000 distribution and supply chain locations.
Similarly a leading retail brand's inventory management implemented radio frequency identification (RFID) technology to connect real-time information between suppliers and its data warehouse. In the process, it reduced out-of-stocks by an estimated 16 percent.
Clearly, data is today driving a vision of economic and technical innovation. Termed the new 'oil', it has the power to make businesses more efficient, and improve our daily interactions as consumers when refined, analyzed and some valuable action extracted from it.