2015/6/8

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The Impact of Big Data and the Industry Transformation/Innovation

Presenter

Dr. Kuang-Yu Chow周光宇博士

Senior Advisor – ICT Consulting

Frost & Sullivan

Managing Director

KYC Global Pte. Ltd.

Introduction

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Dr. Kuang-Yu Chow

周光宇博士

International telecoms leader with 32 years of management, sales, technical, and operations experience in wholesale, network outsourcing and country management in AT&T..

Regional Managing Director-Asia Pacific, AT&T Wholesale

Operations Vice President, AT&T China.

Executive Director and General Manager- Asia Pacific,AT&T System Integration.

Operations Vice President – Carrier Services, Concert(AT&T/BT JV) Asia Pacific

Qualification Ph.D. and a Master of Operations Research from the

University of California, at Los Angeles, Bachelor of Science in Mathematics from the National

Tsing Hua University in Taiwan.

Current: Managing Director, KYC Global, Pte. Ltd.Senior Advisor – ICT Consulting, Frost & Sullivan

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Typical day in a not too distant future ….

• 6:30am– Smart phone wakes you up– Weather report follows– Toaster and coffee maker turned on via

smartphone– Smart toilet detects good news– Doctor’s appointment confirmed– Heathy Eating social network keeps you fit

• 7:30am– Home locked via smart phone– Optimal routing to office downloaded– Auto Driver turned on– Calendar Reporting– Online Shopping: Vitamins and pregnancy

care videos

Later in the day…..

• 9:30am: Package Delivered– Delivery Alert: Vitamins order from 7:30am

arrived– Home Security Camera Scan/Validation

• 10:00am: Message from Insurance Company– 10% discount in premium with Heathy

Eating for one year

• 12:00pm Lunch– Two friends in a restaurant. 10% discount if

join.– Lunch photo uploaded to Healthy Eating

and Facebook– Smartphone Pay– Another 10% discount for Facebook check-

in and sharing lunch photo

-20%

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Afternoon Events…..

• 2:00pm: Husband in the Airport– Check-in Alert: Husband checked In.

Last-minute shopping requests?– HD video call to husband– Auto immigration exit with implanted

chip (husband)– Self check-out at the airport duty-free

store (husband)

• 3:00pm: Husband’s Flight Departs– Message Alert: Husband’s flight

departed. Will arrive on time. 2 boxes of white chocolate purchased.

• 6:00pm: Grocery Shopping– Smart refrigerator recommend dinner

dishes– Smart refrigerator prepares the

shopping list– Order placed, extra items

recommended by the supermarket, and delivery scheduled

A Wonderful Evening…

• 7:00pm: Husband Returns Home– Husband returns from trip and you break the

good news. He is very excited and share the good news with family and friends on the Facebook right away.

– After your husband’s posting goes out, you receive a message from the city government if you would participate a pregnancy tracking program and a genome tracking program for your baby. You say “yes”.

• 8:30pm: Relaxing Time– After dinner, you turn on the TV to watch a

movie and you receive a message on the TV screen that the pregnancy care videos are downloaded into your home cloud and ready for your viewing. You and your husband decide to watch the pregnancy care videos instead…..

– You feel so blessed and start planning the months ahead…. Pregnancy care

videos ready for viewing

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Major Trends Impacting Our Life and the Industries

Online Entertainment: Audience interactivity is pushing online entertainment into main stream

Digital Commerce: Data-enabled shopping has completely changed our shopping experience

Big Data: The advance in parallel computing processing, increasing data speed, and decreasing storage costs are revolutionizing our way of life

Mobility: Your smartphone is becoming the agent for almost everything in your daily life.

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Social Networking: Social media has rapidly become the number one activity on the Internet.

Cloud Computing: Cloud computing dramatically improve the efficiency and flexibility in service delivery.

Convergence is driving the growth of connected devices

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Cheaper

Computing Power

FasterBandwidth

More

Connected

Devices

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A Smart Phone is also a …• Phone• Messengers• Notebook• Camera• Scanner• Voice or Video Recorder• Music Player• TV• Game Player• Credit Card• Car Key• Map• Navigation System• House Key• Touch Light• Remote Control• Book• Blood Pressure Monitor• Encyclopaedia• …..

Disappearing Occupations

• News Reporters/ Journalists

• Bank Tellers

• Drivers/Driving Instructors/Parking Staff

• Factory Workers

• Retail Store Sales Staff

• Supermarket Cashiers

• Gas Station Attendants

• Agents

• Carpark Attendants

• Family Doctors

But New Occupations Have Emerged…..

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Digital Commerce

• Digital commerce provides better and better shopping experience and is growing rapidly

• By 2013, Digital commerce had become mainstream, with $1.3 trillion transacted online.

• Alibaba 2014 Singles’ Day sales reached US$9.3bn in one day

• Amazon stock price went up by 14% on April 25, 2015

• With all the data digital commerce collects, the shopping experience will continue to differentiate itself from the traditional retail shopping

Online Entertainment

• Online entertainment channels and online gaming sites are capturing an ever-growing proportion of consumers’ free time while traditional media channels are in steep decline

• Online channels allow the audience to participate in the media experience which is not the case from the traditional media channels.

• Online channels have changed the way of information consumption and creation. It has also drive explosive growth of data.

• By capturing viewing and gaming data from the users, certain online channels (e.g. Netflix, Zynga) effectively use these data to tailor the contents to further attract the users

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Social Networking

• Social media has rapidly become the number one activity on the Internet, consuming over 4 trillion minutes of the population’s time in 2014. The traffic will continue to grow.

• Line has 17M users in Taiwan – 70% of the population!

• With the data it collects, it is possible to model people’s behaviours, beliefs, preferences, and opinions with a level of accuracy and relevancy that was previously impossible.

• More and more companies are using it to achieve customer intimacy with excellent results.

Social Media: Unstructured Data

More than 80% of companies used social media for recruitment

More than 100 hours of video is transferred to YouTube every 60 seconds

Only 25% of world population used a social media site – strong growth potential!

More than 400 million active users every day

More than 200 million tweets a day

17 million registered users in Taiwan

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Cloud Computing

• Cloud computing is expected to be a trillion dollar business in 2015.

• Many companies achieved significant improvements in efficiency and flexibility in service delivery as well as in the IT costs.

• It has been extensively used by the mobile apps as it dramatically lower the entry-barriers for many industries. It is also one of the major drivers of big data.

• The scope of cloud computing will continue to expand – from infrastructure-related to almost everything as a service.

Big Data – Driver for Personalization and Convenience

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Source: Frost & Sullivan.

2010 2011 20122009 2013 2014 2015 2016 2017 2018 2019

Source: Frost & Sullivan.

P2P

Social Networking

MobileApps

NFC

M2M

ConnectedSociety & IOT

Video & Unstructured

Data

Evolution of Data Growth

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The Power of Contextual Data: It can be used to determine ….

• Where you live• Where you work• Where you shop• Means of transportation• The type of work you do• The restaurants/food you like• Sports and entertainments you

like• Friends, colleagues, and family

members you social with and activities you do together

• Your doctors, dentist, barber, beautician, …..

A Simple Innovative Application to Find Your Android Phones

If you register Android phone with Google, you can type “find my phone”.

Google can find your phone, show you where it is on a Google Map on my PC screen and gives you three options: (1) Ring the smartphone for 5 minutes so that I can find it, or (2) Lock it (if it is lost or stolen), or (3) Erase everything in the phone (If it is lost or stolen).

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Social network data with GPSis useful but it contains many noisy

data, ie chatter, emoticons, etc45%

Sensorized SNS Data

Text Analysis, Meta Data Analysis

Tweets, status updates, news feed, pictures, video, etc

Social Network Data Noise Reduction

• Sunny, 34C• Uncrowded• Strong waves

Concha Beach

Data Mining Becomes a Major Business Differentiator

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Big Data ApplicationsAutomobileAuto Sensors,Report Locations, Problems

CommunicationsLocation-based Advertising

UtilitiesSmart Meter Analysis

Education & ResearchExperiments, Sensor Analysis

Online Services/ Social MediaPeople & Career Matching Health Care

Remote MonitoringLaw Enforcement

& DefenceThreat Analysis, Social Media Monitoring, Photo Analysis

Travel & TransportationOptimal Traffic Flow Financial

ServicesRisk & Fraud Analysis

RetailMarketing Optimization

Media & EntertainmentViewers Advertising Effectiveness

Life ScienceClinical Trials, Genomics

Consumer Packaged GoodsShipment Analysis & Optimization

High Technology Mfg.Mfg. QualityWarranty Analysis

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“Our genes harbour many secrets to a long and healthy life.And now scientists are beginning to uncover them.”

It Also Leads to New Approaches of Doing Business: Traditional Business Under Attack

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2014 Market Caps (Revenue) of Selective Top Companies

Big Data Companies

• Apple: $743B ($183B)

• Google: $368B ($66B)

• Facebook: $233B ($12B)

• Amazon: $189B ($89B)

Traditional Companies

• Exxon: $391B ($394B)

• Walmart: $252B ($485B)

• AT&T: $170B ($132B)

• IBM: $164B ($93B)

Remember these companies?Motorola, Blockbuster, Blackberry, Nokia, …..

Data Productivity Model

• Level 0: No Data

• Level 1: Unintelligent Data

• Level 2: Reactive Unintelligent Data

• Level 3: Proactive Intelligent Data

• Level 4: Predictive Intelligent

• Level 5: Productive Intelligent

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Smart Restaurant Data Productivity

• Level 0: No individual customer data

• Level 1: Start collecting individual customer data

• Level 2: Give each individual customer a deal based on their previous consumptions when they visit

• Level 3: Detect customers nearby and offer them deals to stop by

• Level 4: Send customers and their friends offers for a potential gathering

• Level 5: Invite customers to a recipe competition and include the winning dish in the menu

Major Impact of Big Data to Industry Transformation and Innovation

• From Segmented Market to Markets of One

• From Customer/Supplier to Fans/Stars• From Simple Cost+ Business Model to

Complex Innovative Business Models• From Customer-Initiated Actions to

Enterprise Predictive Analytics• From Everything-In-House to Cloud

Services• From One-Industry Business to Cross-

Industry Business• From People-Centric Data to People and

Machine-Centric Data

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Markets of One

• With Big Data, the customer-centric approach is leading to a new market paradigm: The Market of the Individual Consumer.

• With contextual data, targeted marketing will be vastly more effective than mass marketing and create much more commercial opportunities.

• High data productivity level enables enterprise to gain competitive advantages and increase the probability of making sales

Google might know about you more than your wife (husband)!!!

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One-To-One Marketing

• Google Search

• Amazon Recommendations

• Japan McDonald

• Catalina Marketing

The Era of Social, Mobile, Personalized, Local (SMPL) consumers

The Long Tail

Big Data and 3D Printing will further revolutionize the new market place!

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Fans/Stars

• Fans/stars relationship is a much more effective approach in retaining customers than the traditional customer /supplier relationship

• Have you seen advertisements of Google and Facebook?• Customer experience is the most important factor in building fans/friends• Beside having a good product/service, social media and big data are good

tools for building good customer experience.• Developing a sense of achievement for your fans is a very effective way of

building fans. Crowd Sourcing is an approach often used.• High data productivity help generate "better-than-expected" customer

experience

Building Fans via Social Media and Big Data

• Home Depot

• Minted

• Xiaomi

• Haier

Get 9 useful tips and tricks for a bathroom remodel from blogger Jaime Dorobek of C.R.A.F.T. http://thd.co/1P5lhBY

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Device Manufacturer (Stars & Fans)

• Level 0: Customer/Supplier Relationship• Level 1: Collect Customer Data via Warranty Registration• Level 2: Check customer warranty period when customer sends in

faulty devices and send information and discount coupons of new models when they are launched.

• Level 3: Launch online user group to share product information, respond to users’ comments and inquiries in real-time.

• Level 4: Track user feedback and comments from online discussions to profile customers and invite selected users to preview new models and provide feedback for improvements.

• Level 5: Invite “fans” to provide user “requirements” for the engineers to design new models or products.

Innovative Business Models

• Is “free” service really free?

• Competition in the future is not only between enterprises. It is between platforms and ecosystems.

• Business model based on platforms and ecosystem is the driver of many innovations and a major source of big data

• “Productivity” ecosystem, “Social Network” ecosystem, and “e-Commerce” ecosystem

Ecosystems

Productivity

E-CommerceSocial

24 hours

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OTT services will continue to displace traditional services …

Consumer needs Services Platform/ Enabler

Multimedia & Entertainment

Information

Commerce

Social Network

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Communication

Facebook

• One of the top companies that achieve great success leveraging big data

• 1Q2015 Revenue: $3.54B (+42%)• 1Q2015 Net Income: $509M (-20%)• 1Q Revenue from Advertising: $3.32B (+46%)• Users watching 4B videos a day compared to

Youtube’s 7B videos• Owns Instagram, WhatsApp, Pryte, LiveRail, and

many other OTTs.• Conduct user influence experiments

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Sichuan Airlines: The Art of Free Service

• End-to-end value chain• Free taxi service from airport to city (normal rate:

$150 per trip)• Bulk order of 150 passenger vans at $90K each.

The drivers will explain the features of the van during the ride

• Recruit drivers to buy the vans at $178K each. The drivers are paid $25 for each passenger

• Win(Sichuan Airlines)/Win(Van Provider)/Win(Drivers)/win(Passengers)

Predictive Analytics

• In the era of data-driven, data-dominated business, more and more companies learn how to act before their customers need them.

• According to a survey done by Accenture, forward-looking data analysis has more than tripled since 2009.

• "Method and system for anticipatory package shipping" patent filed by Amazon and awarded in December 2013.

• A Transparency Market Research report anticipated the market for predictive analytics software reaches $6.5B in 2019.

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Leverage Cloud Services for Non-Core Operations

• Most companies have either jumped into the cloud for their IT infrastructure or planning on doing so in the near future to increase efficiency/flexibility and cut costs.

• Many start-ups are also leveraging cloud services to significantly reduce the capital expenses required. (e.g. Dropbox and Amazon EC2)

• As the scope of cloud services continue to expand, more and more companies will outsource non-core and non-differentiable operations to cloud to maintain competitive advantages and the speed to the market.

Cross-Industry Business Expansion

• With cloud services, platform business model, customers that are fans, it has become much easier to cross industry.

• What are companies such as Amazon, Google, and Facebook?

• How Line, WhatsApp, WeChat, etc. are impacting the traditional telephone companies?

• You can still be shot even if you have dodged. Continued transformation and innovation are the way to success in the future.

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Google to Sell Wireless Service in Deals With Sprint, T-Mobile

Move Likely to Push AT&T and Verizon to Cut Prices, Improve Speeds

WSJ – January 21, 2015

People & Device Centric Data• More and more devices we are

interacting today are becoming “smart” and significantly change our lives and various industries.

• Examples are enormous: cars, appliances, homes, power meters, medical devices, vending machines, etc.

• The data collected from smart devices will be even bigger than the data from social media

• The combination of people and device centric data will offer many exciting business opportunities in the years ahead.

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Smart Refrigerator Data Productivity

• Level 0: Keep things cold or freeze; no data

• Level 1: I have an inventory list

• Level 2: I am out of eggs

• Level 3: I am almost out of eggs

• Level 4: I will be out of eggs tomorrow

• Level 5: I will be out of eggs tomorrow and ABC market has the lowest price for eggs

Types of (Over-The-Top) OTT Players

• Information and Productivity-Enhancement Players: Baidu, Google, Yahoo, Microsoft, Apple, …

• Telecom Service Players: Skype, Line, WhatsApp, Viber, WeChat, Kakao Talk, …

• Entertainment Players: Netflix, Youtube, Dailymotion, Youku, Spotify, …

• Social Networking Players: Facebook, Renren, Weibo, Foursquare, Twitter, …

• E-Commerce Players: Amazon, Alibaba, …

• …

M&A will continue. Players that can integrate services and applications to transform people’s daily live will make a lot of traditional companies irrelevant from customers’ point of view.

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Mergers & Acquisitions of Big “Big Data” Companies

Companies Google Bought

• 180 companies bought

• Motorola

• YouTube

• Nest Labs

• AdMob

Companies Facebook Bought

• Instagram

• WhatsApp

Privacy and security are becoming major issues…..

• Google Now Alerts

• Google Location History

• Big Data Target Marketing

• Facebook Posting

• Google Searches

• Amazon Silk Brower

1. All data collected by the application service providers are not owned by you!

2. Google, Facebook, Amazon, etc. use your on-line activities to profile you and it is not transparent to you!

3. Your personal data and information is scattered in different databases and it out of your control.

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The Balancing Act of Data Privacy

Freedom of Information

• Foster innovation as a culture

• Benefit businesses in an ever increasingly competitive market

• Benefit individual wellbeing in health care, safety, convenience, productivity, etc.

Data Privacy

• Individual Level: Everyone has a different comfort level for privacy

• Organizational Level: Protect insights and proprietary information to keep competitive advantages

• National Level: Protect national security

Development of Privacy Regulations

• US – “DO NOT TRACK” was promoted by Center for Democracy

and Technology in 2007 and suggested by FTC. Firefox was the first to implement in 2012 followed by IE and Safari

– Consumer Privacy Protection Act was implemented in 2012

• Europe– E-Privacy Directive was implemented in 2002 and updated

in 2012, it includes the following main points:• Right to be forgotten

• Consent required for personal information

• Data portability

• Responsibilities of personal data users

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Summary

• Mobility, Social Media, e-Commerce, e-entertainment, Cloud Computing, and Big Data are revolutionizing our daily life, business, and industries.

• Data and Data Productivity will be one of the key differentiators and competitive advantages for many businesses and industries.

• Traditional business needs to innovate and transform to compete in the future

Thank You!

Dr. Kuang Yu Chow

Kuang.chow@frost.commd@kycglobal.asia

+65 9758 8852