Big-data is creating opportunities for investors as well as the business community. As a recent report from Turner Investments explained, companies that can best process the growing variety, volume, and velocity of data could profit handsomely in the next few years. Turner notes that these include EMC (NYSE: EMC), Fusion-io (NYSE: FIO), Splunk (Nasdaq: SPLK), Tibco Software Inc. (Nasdaq: TIBX), and F5 Networks Inc. (Nasdaq: FFIV).
Robert DeFrancesco, the founder and managing editor of Tech-Stock Prospector, an investment research and advisory service covering various segments of the technology sector, agrees -- and he will be joining us today at 2:00 p.m. ET for an interactive e-chat on big-data investments. DeFrancesco is a veteran tech analyst who has covered the tech sector for more than 20 years, a former senior writer with Louis Rukeyser's Wall Street newsletter, and the latest professional to join our team of talented bloggers here at AllAnalytics.com.
DeFrancesco tracks the latest developments in the tech world and uncovers the most-promising investment opportunities. He conducts deep fundamental research to identify and capitalize on inefficiencies within the technology-stock sector, and, in addition to company-specific research, covers key themes, including cloud computing, mobile broadband, collaboration, social media, networking security, datacenter consolidation, and virtualization.
In short, he can wade through the trends and opportunities to suggest ways investors can get in on the action created by the flood of big-data. Venture capitalists understand the potential and are already benefiting from the trend, data shows.
According to numbers compiled by private-equity research firm CB Insights, venture capitalists poured $1.15 billion into big-data firms between the second quarter of 2011 and mid 2012. (See: VCs Pour Money Into Big-Data.)
Just recently, EMC's security division, RSA, acquired Silver Tail Systems, which analyzes large amounts of Web traffic data in real-time to assess possible security threats, for a reported price of between $300 million and $400 million. Investors included Citi Ventures, Andreessen Horowitz, Leapfrog Ventures, Seraph Group, and Startup Capital Ventures.
DeFrancesco has already shared some of his insight on All Anaytics. Last week, right before the share price fell 14 percent, he shared his insight about MicroStrategy (Nasdaq: MSTR). The company reorganized its senior management team, with founder Michael Saylor giving up the role of president, and COO Sanju Bansal stepping down after 19 years. One All Analytics reader noted that a maturing industry means lower prices, and characterized that as a good thing. But it's a matter of perspective, isn't it? It's not good for the companies selling the stuff, nor for the people investing in those companies.
In September, DeFrancesco told us about three big-data companies to watch -- Splunk, EMC, and Teradata Corp. (NYSE: TDC).
"Just about every day I read an article about big-data," he told me. "The truth is, big-data has been around for a while, but without the catchy name. There is just a lot more of it these days, thanks to social networking. Databases have always been loaded up with transactional data (from accounting systems, order-entry systems, and ledgers) stored in structured columns and rows."
The rise of Facebook (Nasdaq: FB), Twitter Inc., and LinkedIn Corp. unleashed an explosion in so-called unstructured data, including blocks of text, photos, and videos. Business intelligence involves analyzing massive amounts of data (structured and unstructured) from various sources to discern important trends, he noted.
Earlier this year, IDC released its first big-data forecast. The firm expects a compound annual growth rate (CAGR) of 40 percent through 2015. IDC sees the worldwide big-data market (including servers, software, storage, and services) reaching $16.9 billion in 2015, up from $3.2 billion in 2010. IDC expects the software segment to have a CAGR of 34.2 percent.
The question isn't "Should you invest?" but "What should you invest in?" Join us today at 2:00 p.m. ET for the interactive e-chat and get some ideas.