Owing to the gradual rise in global Internet penetration, and the shift to higher-resolution media content, the big data and analytics industry has been on a tear lately. IDC estimates that the industry -- worth about $14.26 billion in 2014 -- will expand approximately 66% over the next two years. Intel (INTC +1.71%), IBM (IBM +1.88%), and SanDisk (NASDAQ: SNDK) stand to benefit the most from this expected growth.
Processing machines
Procuring high-performance computing processors is the first step in setting up the required infrastructure for big data analysis. For this reason, enterprise clients tend to pick Intel's Xeon offerings, and the company enjoys over 90% market share in the server chip segment.
Big data analysis is, generally, more about speed and less about power efficiency. 64-bit ARM chips may be entering the server space, but ARM-based offerings generally lag Intel in terms of single-threaded raw computing performance. It is, therefore, highly unlikely that ARM-based chips will snatch a meaningful share from Intel in the high-performance server chip segment.
In a recently issued research report, Wikibon noted that Intel's revenue from big data-related sales grew from $76 million in 2012 to $165 million in 2013, a sharp 117% year-over-year growth. It is also the only chip manufacturer featured in Wikibon's list of top-60 big data vendors by revenue.
Intel's rapid growth in the segment, however, will most likely continue. The chipmaker recently acquired an 18% stake in big data analytics software provider Cloudera for $740 million. This will not only diversify Intel's operations and expand its product portfolio, but also allow it to fully reap the rewards of the booming big data and analytics industry over the coming years.
Data storage
Storing and accessing gigantic chunks of raw data in a digital format, with minimal delay, is another challenge for big data and analytics firms. With the rapidly increasing impetus on high-speed big data analysis -- like high-frequency trading or online transaction processing -- enterprise clients must increasingly switch to solid-state drives, or SSDs.
SanDisk manufactures retail and enterprise-scale SSDs, something that several flash memory makers are already doing. SanDisk, however, also offers ULLtraDIMM drives, which are SSD drives connected to DRAM-dedicated DIMM slots. Consequently, ULLtraDIMM SSDs deliver a write latency of 5µs (the lowest in the enterprise segment) and about 800-times faster than conventional hard drives.
SanDisk also recently announced plans to acquire PCIe SSD specialist Fusion-io for $1.1 billion. SanDisk's product portfolio has lacked PCIe-based offerings, and Fusion-io's extensive offerings should complement the former's product line. This, in turn, should increase SanDisk's exposure to the rapidly growing big data and analytics segment.
Data analysis
Once an organized cluster of high-performance machines is set up, the challenging task of big data analysis must be executed using capable and resource-efficient software. Intel may have entered the world of big data-related software development, but it has yet to fiercely compete with IBM, the long-standing leader in the analytics industry.
|
IBM: Fiscal Year 2013 | |
|---|---|
|
Segment |
Revenue Share |
|
Big data hardware revenue |
31% |
|
Big data software revenue |
27% |
|
Big data service revenue |
42% |
Source: Wikibon 2013
IBM is the world's largest big data vendor by revenue, aggregating to approximately $1.36 billion in fiscal year 2013. The tech giant provides hardware, software, and service support for big data-related enterprise clients. Its diversified product portfolio, in turn, increases its exposure to the booming big data and analytics industry.
Over the last nine years, IBM has invested over $24 billion to perfect its big data and analytics offerings, which has allowed the software giant to solve complex real-world problems like fixing Beijing's pollution crisis.
Such ambitious and innovative projects not only rake in revenue, but also bolster the company's reputation, something IBM will use to capture the immense growth potential in the big data and analytics industry.
Wrap up
The big data and analytics industry is huge, yet it is still expected to grow at a rapid rate for the next few years. Plus, since the aforementioned companies are closely associated with the establishment and operation of the industry, they seem well-positioned to reap the rewards of this explosive growth.
