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The Three Types Of Big Data Companies You Need To Invest In

What three types of company make the best investments?

12Oct

Big Data is one of the most exciting business processes in the world at the moment and companies are clamouring to get onboard to make sure they aren’t missing the boat.

From changing internal strategies, personalizing marketing or simply identifying opportunities in the company, it is having a transformative effect not only only the ways that companies are working, but their overall value.

This means that Big Data is also a big growth area for finance companies and investors.

The question that everybody wants answered is which companies to invest in and why, so we have outlined the three types of company that you should be looking at in terms of making money through investments.

Platform Provider

This seems fairly obvious, especially when you consider that the Forbes Insight survey of 316 high level executives shows that 90% of organizations report medium or high levels of Big Data investment, the amount of potential growth here is huge.

In fact IBM’s strategic imperatives (Cloud, Mobile, Social, Analytics, Security) revenue grew 30% in 2014 despite the well documented struggles it has faced in other areas of the company.

Big Blue aren’t the only company that people are turning to either, with companies like SAP, SAS and Teradata showing strong growth in their data platforms.

Component Maker

Data analysis is only capable when companies have the correct hardware to do it. With the increasing popularity of data in terms of both warehousing and analysis, companies who build the components to allow this to happen are also making considerable profits.

IBM is once again in the mix with this alongside Oracle and HP, to name just a few. However looking at the companies who produce the finished product is short sighted and misses some important growth companies further down the supply chain, such as ARM, who have seen their share price increase by almost 300% in the last 5 years. ARM produce computer chips for processors for everything from mobile devices to supercomputers, making them vital in complex data management systems.

Industry Adopters

The providers of Big Data technologies are an obvious place to start in terms of investment, but when you look at the use of these technologies, companies who have used them properly have some of the best earning potential.

Take Amazon as a prime example, who have placed the use of data at the centre of everything they do. Their shares have increased by close to 400% in five years due to this strategy and Facebook’s has increased by close to 300% in a similar timeframe due to their data driven strategies.

It is not only going to be companies who are obviously data driven that are going to see considerable increases in their share prices either, but often the improvement in performances thanks to data can see them rise naturally. For instance, an airline who uses data to minimize delays will see their performance improve and this increases the likelihood of increased profits. Similarly if data can help to sell more goods or services in any company, profits increase and share prices increase as a result.

So what would be the best advice for this? Look at the companies who are using data effectively, they are the ones who are likely to offer the best returns in the next few years.

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