"Big data" might not be in the same league as "selfie" as far as buzzwords of the year are concerned, but if you follow the technology sector at all, you've certainly heard of it. With the proliferation of data today available from so many sources, companies would be remiss to not try and utilize all that information.
According to recent research from Gartner, chief information officers will have big data and business intelligence solutions at the top of their wish list for the next several years. As an investor, it would seem logical then to explore opportunities to profit from the increasing interest in big data and BI, and there a few in particular that are well positioned for just that.
The data surrounding big data
Just as Gartner predicted in June of this year, and reiterated a few days ago, BI will remain in the forefront of tech folks' minds until at least 2017. Data discovery, and the ability to push analysis out to all areas of a business, is the wave of the future. As it stands now, most big data and BI analysis results have been report-driven, and only 30% of a company's personnel have access to the analytics.
But the business information silo will change, according to Gartner, as BI and big data become the basis for making business decisions in all departments, including sales, marketing, and finance, to name just a few. That sounds good, but there's a catch.
Though CIOs will continue to dream about the wonders of information, confusion surrounding what big data is, and how best to utilize it, will hamper its growth until at least 2016. And therein lies the problem for BI leaders SAP (NYSE:SAP), Oracle (NYSE:ORCL), and IBM (NYSE:IBM): Everyone's talking about it, but few are actually investing in big data, and fewer still are implementing big-data solutions using BI analytics.
First, the bad news
As of now, a mere 30% of companies surveyed have invested in big data. SAP's multiple BI solutions built around its Business Objects suite, Oracle's enterprise-wide BI Foundation solutions, and IBM's Cognos family of BI-related tools are three of the most popular in the industry. Combined with all the big-data talk, you'd think these tools would be prominently mentioned in each earnings report.
While SAP's cloud revenues are exploding and are consistently mentioned in its earnings recap, software was one of its few unimpressive units last quarter, dropping 5% compared to last year's Q3. Oracle released earnings today that beat expectations and were well-received by investors, but like SAP, its software results were less than exciting, ending the quarter virtually flat compared to last year's fiscal Q2 1013. As for IBM, today's acquisition of Aspera, a provider of tools to move big files lightning fast, was in direct response to its desire to beef up its suite of big-data solutions.
Now for the good news
Despite all the buzz, the BI and big-data markets haven't gone mainstream -- and that means there's a world of opportunity in the coming years. It's difficult not to imagine that at some point -- around 2016, according to Gartner -- the results for leading big data and BI players will catch up to the hype. When it does, SAP, Oracle, and IBM are already well-positioned to take full advantage.
Final Foolish thoughts
None of these three companies are reliant on big data and BI growth to make them sound investments today -- SAP and IBM's stellar cloud-related results, along with Oracle's solid earnings announcement, are testaments to that. And for buy-and-hold investors, which include many a Fool, it's easy to make an argument for any of these IT providers. But if you're counting on big data and associated BI solutions to drive growth, you'll need to wait a while.
Fool contributor Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Gartner. The Motley Fool owns shares of International Business Machines and Oracle. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.