Advanced analytics continues to be the fastest-growing segment in the business intelligence (BI) and analytics market, forecast to grow almost 14 per cent to reach US$1.5 billion in 2016, reports Gartner.
The analyst firm predicts by 2018, more than half of large organisations globally will compete using advanced analytics and proprietary algorithms, causing the disruption of entire industries.
"Advanced analytics has already been changing entire industries for over a decade and is a key factor for how most new entrants disrupt established markets and beat their incumbents — whether selling books, renting movies, borrowing money or even building a professional sports team," says Jim Hare, research director at Gartner.
End-user organisations and vendors will need to accelerate the shift in focus of their investments from measurement to advanced analysis or risk being left behind.
"Today, with fewer regulated monopolies and the Internet eliminating geographical boundaries, more companies are starting to use statistical analysis, predictive modelling and decision optimisation to compete, instead of using traditional approaches."
Hare says that to survive in the new digital economy, end-user organisations and vendors will both need to accelerate the shift in focus of their investments from measurement to advanced analysis or risk being left behind.
Leading organisations are developing proprietary algorithms that can lead to faster, more insightful analysis and are moving away from "gut feel" decision making.
Gartner also predicts by 2018, algorithm marketplaces will be combined with Platform as a Service to boost advanced analytics and enable secure sharing and monetisation of raw data.
Read more: The six steps to become a successful CDO
Gartner believes that advanced analytics could provide significantly more benefits if there was more sharing of detailed, event-level data.
However, this is being hindered by significant licensing, trust and data integration issues, says Gartner. The solution will be the combination of algorithm marketplaces and PaaS-runtime environments, where only specifically certified functions are allowed to process the secured data.
"Today's situation of sharing data is problematic," says Alexander Linden, research director at Gartner. "Data providers don't typically trust end users with detailed, event-level data.
“On the other hand, data consumers do not like the involved complexities of data licensing and data integration. As a result, there is a significant impediment to sharing and monetising data."
In three years, Gartner expects technology to be available that can radically simplify the trust, licensing and data integration challenges, by placing controls on the algorithmic data processing.
Only certified components will be able to run sensitive data and transform it into scoring and optimisation models, it states.
“In essence, the data processing will be constrained to ensure that the underlying detailed data cannot be copied, saved or reverse-engineered,” concludes Gartner.
Send news tips and comments to email@example.com
Follow Divina Paredes on Twitter: @divinap
Click here to read digital editions of CIO New Zealand
Join the CIO New Zealand group on LinkedIn. The group is open to CIOs, IT Directors, CDOs, COOs, CTOs and senior IT managers.
Join the CIO New Zealand group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.