Though data analytics is not a new field, it has shot up in popularity in last decade or so. We can attribute this growth in 3 key factors that have led business to shift towards analytics and their reliance on data rather than intuition.
1. More Data is Being Produced: There has been a tremendous rise in data that is being generated. For example, in the Year 2010, 1.2 Trillion Bytes of data was produces in 2010 and this has increased 5 trillion bytes in the Year 2013 and is expected to double again in next 18 months and so on. A recent study by IBM suggested that 90%of the world’s data has been generated in last 2 Years. This just highlights the sudden wave of data generation we are witnessing. We know how businesses like Google, Yahoo! and Amazon have huge data warehouses that are in place to store this data.
2. More Data is being stored: The second reason why Data Analytics is becoming so popular is not only more data is being produced but a lot more data is being collected and stored now. The reason behind the large amount of data that is being stored now can be attributed to the reduction in the storage costs that have gone down at an astonishing rate in last 2 decades. In 1990, the cost of storing 1 GB of data was around $9000 and in 2010 this has come down to 8 cents. The costs have gone down by 100,000 times in the last 20 Years and this is what has led companies to store gigantic amount of data at a very reasonable costs.
3. Better Tools to Analyze Data: With the evolution of technology that attributed to faster processing power, we now have several sophisticated tools to help us analyze large data sets and apply complex statistical techniques to derive meaningful insights from the data.
Now, that we are able to derive meaningful results from the data in hand, companies are now generating and storing more data to help them make derive more insights from the data and hence we this virtuous circle in which more data is being analyzed to make better predictions that eventually leads to better results and hence we see the huge rise in popularity of analytics.
The following diagram succinctly explains this virtuous circle: