Why It's Hot

In an increasingly digitized world, everything you do creates an electronic recordevery purchase, doctor's visit, or instance you "friend" someone on Facebook.

As organizations continue to amass hundreds of terabytes of that information, they are looking for more sophisticated software tools to mine and analyze it, to help businesses better understand their markets and customers, and even predict what's next.

Growth Potential

According to the market research firm IDC, "big data" companies that address these needs had sales of $3.2 billion in 2010. Total industry revenue is expected to reach nearly $17 billion by 2015, growing about seven times faster than the overall IT market.

And while the business analytics and enterprise software sector of IT (which includes "big data") has remained steady over the past few years, growing 1.8% from 2007 to 2012, according to IBISWorld, the firm says improvements in profit margin--now at 36%, on average--have been fueled by the acquisition of companies that offer data services.

Exit Strategy

Large vendors have targeted smaller companies as a means to expand their own customer bases and product offerings. IBM recently purchased several big data firms, including Netezza, which makes data warehouse appliances, for $1.7 billion. Other major acquisitions include Oracle's reported $1.1 billion purchase of enterprise search company Endeca, as well as Hewlett-Packard's $350 million purchase of data analytics platform Vertica, last year. 

Barriers to Entry

As consolidation continues, it might become more difficult to pry market share from these giant firms. But if a quick exit is top of mind, and you've got some pretty high-level degrees--in, say, computer science, software engineering, or market research--the burgeoning big data industry might be the place for you to start a business.

May 21, 2012