How fast is the Big Data technology and services market growing? According to IDC, the market will grow at a 31.7 percent compound annual rate, with revenues reaching $23.8 billion by 2016. For some context, that’s seven times the rate of the overall information and technology market. For those involved on either the supply or demand side of IT staffing, the growth is big news. Big Data is a functional area primed for an IT staffing skills shortage.
A 2011 report by the McKinsey Global Institute bears this out. It projects that U.S. companies will need between 440,000 to 490,000 data scientists and 1.5 million data-literate managers by 2018 — 140,000 to 190,000 more people than will be available. Analytics services, in short, is an area for which companies will likely have to turn to IT outsourcing services or managed IT providers – especially considering the PhD-level expertise that analytics and Big Data computing requires.
Outsourcing Big Data Similar to Other Knowledge-based Outsourcing
In many ways, companies are already well versed with this trend’s earlier iteration – knowledge-based outsourcing. Companies have been handing over such tasks as legal work to outside providers for years, just for example. Best practices around knowledge-based outsourcing have sprung up alongside this growth — best practices that can be adapted for Big Data analysis outsourcing.
Some, though, are more relevant than others —such as an emphasis on trust and security. More so than with other knowledge-based activities, Big Data touches on client and company info that is highly-sensitive and likely core to the business.
Tips to Find Your Way
That said, here are some tips to keep in mind:
- Look for certifications and standards, such as COPC, ITIL and Lean Six Sigma.
- Have a strong Service Level Agreement in place. Ditto the confidentiality agreement.
- Pay close attention to the business value arguments that the prospective vendor offers, IDC advises. Why? Simply put, system performance, availability, security, and manageability all matter greatly, but how they are achieved is becoming less of a point for differentiation amongst vendors.
- Look for an outsourcer with whom you could form a long-term relationship. This is a good advice in general, as outsourcing relationships shift from the vendor-customer model to a partnership. For Big Data, an area that is just emerging, a long-term collaborative relationship could reap strong rewards for both vendor and client. Conversely, explore the varying price models – namely based around revenue sharing – in this space.
This last point will require a great deal of research, as Big Data is, as already stated, growing at a huge pace and rapidly spawning any number of use cases. For instance, last year Ford Motor Company launched an initiative to begin processing data being emitted from more than 4 million cars. Twitter has inked agreements with 12 companies to tap its 340 million tweets per day in order to make global event predictions. Big Data, in short, is not only emerging as a high-growth area, but also a high-investment one as well. Reuters reports that venture capital firms invested $2.47 billion in Big Data in 2011, up from $1.53 billion in 2010. Indeed another reason companies might want to consider a Big Data partner is to help bear some of its high computing costs.