Companies are Spending a Lot on Big Data

Big Data Study - Companies are Spending a Lot on Big DataThe investments these companies made in Big Data were sizable. We measure those investments in two ways: by the median and the average survey respondent:

  • Median spending on Big Data was $10 million, which was 0.14% of revenue (based on median revenue of survey respondents: $6.9 billion). We believe the median spending numbers provide a more accurate picture of spending on Big Data than the mean (or average) numbers here since the mean was skewed because of a number of respondents (7% of the ones we asked for spending data) who spent more than $500 million on Big Data in 2012.

  • The average survey respondent spending on Big Data was $88 million in 2012, which was 0.5% of average revenue (of $19 billion). Again, we believe this is a less reliable indicator of what companies are spending on Big Data.

The large spread between median and mean spending on Big Data shows a big polarity in investment. In 2012, 15% of the companies invested at least $100 million apiece on Big Data initiatives. About half of them (7%) invested at least $500 million each. However, on the other end of the spectrum were the 24% of companies that spent relatively little on Big Data – less than $2.5 million each. This demonstrates that a distinct minority of companies – less than one in seven – have initiatives around Big Data and are investing heavily in it.

Using the median numbers, Australian companies were far in the lead, at $50 million in spending per company while U.S. companies were close to the median ($9 million). (See Exhibit II-3.)

Exhibit II-3: Median Per-Company Big Data Spending in 2012 By Region
Q14: Median Spending Per Company on Big Data in 2012 – by Country

Exhibit II-3: Median Per-Company Big Data Spending in 2012 By Region

We frequently came across stories of outsized spending on Big Data in our interviews with leading companies. General Electric announced in 2012 that it would spend $1 billion over four years on a new San Ramon, California-based software and analytics center. One major telecommunications company is spending “tens of millions of dollars” on Big Data, especially in its mobile service unit. “Our customers get new phones every couple of years, and it’s a highly competitive business with [lots of churn],” one executive told us. “The transactional data for those customers is a massive amount of information.”

Another company spoke about its 200-person centralized group of Big Data analysts. Although the company did not reveal specific numbers, figuring an average annual salary of $90,000 (a number from a firm called SiSense), we believe the firm has at least an $18 million annual expense in wages alone.1

By the year 2015, companies across the surveyed regions expect to spend 75% more on Big Data, with Australia and U.K. companies projecting the highest spending per company. Median spending across all countries is projected to increase by 75% to $17.5 million. (Exhibit II-4)

 Exhibit II-4: 2015 Projected Per-Company Spending on Big Data
Q14-a: Median Spending Per Company on Big Data in 2015 – By Country

Exhibit II-4: 2015 Projected Per-Company Spending on Big Data

Big Data Study Findings: Regional
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  1. The $90,000 salary for the average data scientist in the U.S. comes from a study by SiSense, which can be read here in a TechCrunch article []

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