During the past decade, the cost of data analytics tools has declined, opening the door to affordable and effective data analytics solutions for small and mid-sized businesses
July 7, 2021
The Importance of Data Analytics
Over the past decade, data analytics have become increasingly important to companies as they look for an edge in a competitive business landscape. While most large institutions have started on their journey towards analytics proficiency, the majority of small to mid-sized businesses have yet to embark.
The owners of small to medium-sized businesses know that they should be using data analytics to harness the power of the data their firm has collected. They know their larger competitors are doing it, they know they have the data available to unlock key insights into their business and they often have use cases in mind where analytics could drive value. The two issues that small to mid-sized enterprises often cite as standing in their way are:
#1. A lack of technical knowledge within the company to kick start analytics
#2. The cost of purchasing the required tools to support data analytics will be prohibitive
While a lack of internal ‘know-how’ certainly presents a barrier to getting analytics initiatives off the ground, the owners and operators of these businesses are often surprised to learn how industry dynamics have driven the cost of utilizing cutting-edge analytics tools down to prices that any company can afford.
The Cost Decline
Over the past decade, intense competition between cloud leaders such as Google Cloud, Amazon Web Services, and Microsoft Azure, have continued to drive down the cost of both storing and processing data on their platforms.
The intense competition between these large cloud providers has also resulted in them releasing a stream of innovative solutions that extend new capabilities to their customers.
New startups such as Databricks, Data IKU, and Fivetran, have entered the market with innovative products that help companies become more effective at mining their data for insights. These new startups often offer their products via a pay for usage subscription model, which allows smaller companies to benefit from these tools while paying in proportion to their size.
Older incumbents like SAP and SAS have responded to these start-ups by embracing more flexible payment options than their traditional multi-year contracts, while emphasizing product innovation.
In recent years intense competition among data analytics application providers have driven the cost of analytics tools down while making them more user friendly
These industry dynamics have resulted in the cost of setting up and running a cutting-edge data analytics tech stack falling, while the accessibility and capabilities of these tools have risen. This has placed the same analytics tools that behemoths like Shell use, in the hands of small to mid-sized enterprises.
Over the last half-decade, Shell has transitioned from on-premise analytics tools to cloud-based tools. This transition has allowed them to create better analytics solutions that have delivered strong results
Data SEA Consulting Client Case Study
An example of how a small business can utilize these tools at a company-friendly price point comes from a Data SEA client who utilized many of the same analytics tools wielded by Fortune 500 companies. Due to the comparatively limited amount of data that the client’s system needed to process and store, the client paid less than $900 per month to gain access to the suite of analytics tools seen below. Since the subscription fees for these tools are paid on a monthly basis and do not require signing a long-term contract, the client had the added confidence that they were not taking on any long-term fixed cost while embarking on their analytics journey. For $900 the client could connect a wide variety of data sources into its AWS cloud storage, process the data at high speeds using Databricks, and push the data into a Power (BI) data visualization front end.
This process supported several analytics solutions such as:
– Real-time insights into its market penetration by geographic region
– Automatically generated warm sales leads from the geographic regions it operated in
– Fully automated reporting that provided cross-functional insights into the companies finances, marketing, operations and sales departments
While there are many steps small to mid-sized companies must take along the road to unlocking and harnessing the power of their data, creating the right analytics technology stack is a key first step that every company can now afford to take.