Smart Data Applications: The Future of Business Software?

It is my prediction that enterprises applications will become smarter in 2015 and that the future of business software is smart data applications. Over past decades, we’ve gone from mainframe computers to client/server applications to business and mobile applications delivered in the cloud. Now with the Big Data revolution, it’s possible to use data to do everything from predicting customer buying patterns to optimizing data center performance.

It’s no secret that data is at the heart of B2C businesses. P&G uses data to design new products like disposable diapers. Netflix uses data for movie recommendations. Amazon uses data to personalize your shopping experience. Google publishes and monetizes ads based on data. Uber has amassed massive amounts of data from its drivers’ and riders’ to know almost to a tee where and when to appear for pickups. And Fitbit is using data to supercharge a personal fitness revolution in a fun and interactive way through its devices.

Why is it so hard for enterprise applications to use data to become smarter, more predictive, and prescriptive?

First, enterprises applications weren’t designed to utilize data to drive actions. Instead, they were built to automate business processes like supply chain, ERP, or CRM. For example, Salesforce.com started as a workflow and reporting engine for sales reps and management. Workday automates complex human resources and financial management processes.

Secondly, easy-to-use, affordable and scalable technology didn’t exist with capabilities to ingest, manage, search and store massive amounts of data until recently. For example, if you started a company in the 1990’s or mid 2000’s, you likely built your application on top of Oracle or a SQL database as Hadoop, Cassandra, Lucene, and NoSQL frameworks didn't exist for distributed computing.

What do enterprise technology vendors need to do?

1. Make Data the Heart of the Product -- Embrace and use data to build smart applications. Use it as a core part of product strategy and product development. Use it to become smarter about customers and to deliver more value to them. Lumiata has built a predictive healthcare application based on tens of millions of data points, and growing.
2. Use Data Science to Operationalize Insights -- Embed data science into your application to operationalize the customer experience with predictive and prescriptive insights. Provide hard to get insights that make your product indispensable. Aviso, Infer, and Totango use data science to predict sales, leads and churn.
3. Instrument -> Optimize -> Iterate -- Use data to continuously instrument and optimize your product. Iterate like how Google or Amazon fine tunes its ads or recommendations in a way invisible to the end user. Use data to prioritize and deliver the right features and powerful insights for your customers.

As the new year kicks off, I’m optimistic that we’ll see more business applications take the form of smart data applications spawning yet another wave of innovation.

Happy 2015!

Tw: @jeffyoshi