What do credit card company Capital One, supermarket chain Tesco, and America’s United Airlines have in common? The answer: each has built up a commanding competitive position by developing a powerful analytics edge.
At Capital One, smart analytics helped the company to figure out which consumers it could profitably lend to—and which it should avoid. At Tesco, the analytics edge in question came through in-depth insights into customer behaviour, acquired through its Clubcard loyalty programme. Similarly, United Airlines was able to harness data gathered from its Mileage Plus frequent flyer programme in order to identify its most profitable customers.
And on any measure, this is analytics at scale. United’s Mileage Plus programme, for instance, had 52 million member immediately prior to the company’s 2010 acquisition of Continental Airlines—which then promptly took the total to 90 million. Tesco’s Clubcard programme, meanwhile, has around 38 million members.
Look at the results of such analytics programmes, and the value of investing in building an analytics edge at this scale is not in doubt. But historically, the cost has been considerable, requiring a significant level of investment.
And for businesses mulling the practicality of developing their own analytics edge, it’s a level of investment which can easily turn out to be a barrier.
Until now. Because with the Cloud, the rules have changed.
The Cloud is a gamechanger
At its simplest, Cloud analytics technology does three things to make analytics at scale a more practical proposition.
- First, it makes available powerful and scalable database technology.
- Second, it provides a powerful and scalable computing platform.
- And third, it makes both of those available on a ‘pay as you go’ basis, vastly reducing the required upfront capital expenditure.
The result is to transform the art of the possible. For any business with data of Big Data proportions, it’s no longer necessary to make significant capital investments in order to start crunching numbers.
Meaning that serious analytics can begin with almost no fanfare, and without the need for lengthy board presentations and approvals.
Assemble your analytics team, and start.
Enter Amazon Redshift
But not every Cloud database is up to the task of handling analytics at scale. At Matillion, we like Amazon Web Services’ Amazon Redshift, a massively parallel columnar data store that can deal with billions of rows of data, yet which can be up and running in a few minutes, and operated for a few cents an hour.
One reason is that in contrast to traditional row orientated databases, the data store is more compact, as there’s no index: in columnar data stores, the data acts as its own index.
Another reason is that columnar data stores such as Amazon Redshift are blindingly fast when compared to traditional row orientated databases. That’s because columnar-based indexing puts similar values next to each other, meaning that searches can automatically jump to the right place.
And a third reason is that Amazon Redshift then amplifies this in-built speed advantage with linearly-scalable massively parallel processing. So a 16-node Amazon Redshift cluster will process queries approximately twice as fast as an 8 node Amazon Redshift cluster, which in turn will be approximately twice as fast as a 4 node cluster.
Meaning that speed is simply a function of the number of nodes a business chooses to deploy—where that deployment, don’t forget, costs just a few cents an hour.
Almost nothing is a barrier
Roll it all together, in short, and the upshot is to make analytics at scale almost universally accessible.
You don’t need to own massive data centres housing mainframe computers. You don’t need vast expensive on-premise databases. And you don’t need the hefty capital expenditure budgets that make such things affordable.
What do you need? Well, talented analysts help.
But the real answer is simply this: you need management vision, and data to throw at that Cloud analytics technology and those talented analysts.
So if you’ve got those, what’s holding you back?
To find out more about Amazon Redshift, and how to get the best out of it, download our free guide below.