So it took that data and tweaked its approach. Now when it sees a slowdown it reaches out to the client to try a new plan or just make sure the clients don’t cancel. In the future it may offer new pricing plans to adjust for slack usage.

That’s just one way connected devices and the data they offer can be used for benefitting a business. But the value of constant connectivity to a firm goes far beyond that — and could change the way businesses operate. Even after a product goes out the door, the company responsible can still keep an eye on it. That has big repercussions for business and consumers — and not all of those repercussions may be welcome.

Always be talking … to your device.

For example, the constant contact can also help tweak a design or improve the function of a product — even out in the field. In a recent conversation, Splunk’s Tapan Bhatt walked me through a few examples such as the one above, where the company’s machine logging data helped businesses adjust. For example, the makers of the Nest thermostat use Splunk to analyze data uploaded from hundreds of thousands of homes, and tune their algorithms for energy performance.

Medical device manufacturer iRhythm uploads remote monitor data to Splunk to make sure devices run as expected, as well as help ensure that patients can use the devices intuitively. In many ways this isn’t new. Jeremy Conrad at Lemnos Labs pointed out to me in a conversation last month that many manufactured devices are tweaked again and again after the first manufacturing run to smooth out perceived and real flaws in the design.

The shift is that it can now happen constantly and that the changes might be implemented weeks or months after the product has been manufactured. Advertising firms and online publications have been using such data to refine their products for years. The Huffington Post’s love of A/B headline testing is well documented, while the use of eye tracking in web site design is a common practice. But more connectivity in devices means the fine-tuning and easy tracking that are common in digital products are now available in the real world.

Want to tweak a feature? Send out some software

Connected devices not only offer you the ability to get data from your goods (while software like Splunk’s helps you log and later analyse it), but it also allows you to change how they feel and function. For example, Orbotix, the company that makes the Sphero not only knows the moment someone activates one of the Bluetooth-controlled balls, but can give it new abilities with an over the air update.

This connectivity and resulting data can also help with business goals, like improving manufacturing, anticipating demand and even holding reviewers accountable for their articles as was the case when The New York Times and Elon Musk, the CEO of Tesla got in a public battle over a poor review of the electric car.

The board at the Orbotix HQ that tracks all the active Spheros in the wild.

At Orbotix a billboard in the office tracks how many Sphero’s were activated that day, that month and even over longer periods of time. If you stand in front of it for a few moments the numbers will change. Paul Berberian, the CEO of Orbotix told me that during the holiday season the numbers were changing so fast it was hard to keep up. During the rest of the year evenings and weekends were popular times for seeing the numbers flip more rapidly.

Just in time manufacturing gets a data infusion

As this data accumulates he’s finding that he can better anticipate demand and plan inventory to meet it. Perhaps if he wanted to, he could implement a similar program to that elevator company, watch the data from individual Sphero’s and when interest seems to wane perhaps the company sends a notification to the user about a new app available for the ball.

But it’s not always about the customer — this data can be used to monitor manufacturing partners or suppliers. For example, Electric Imp, which makes a tiny module that device makers can insert into their products to give it connectivity (it’s a radio with access to a cloud back end), connects its modules as they come off the line. One of the final steps in the packaging process is each module gets an ID laser-etched onto it.

This process requires the module to “wake up,” connect to its virtual machine in the cloud to get its ID number, and then tell the laser etching machine (which has its own Imp module) what number to print on it. As part of this process Electric Imp’s management can track all of its modules off the manufacturing line and get key information about yields and even product theft.

Of course the flip side of this constant connectivity is the disquieting sensation that even as you enjoy a product it’s not yours. It’s features might change at any point. Perhaps things you love about the product or even features you’ve purchased, might suddenly disappear. As a consumer, the idea of dynamic pricing can seem exciting if you don’t use something a lot, but it becomes a source of higher costs if you have a building with very active elevators, for example.

And perhaps most unsettling is the realization that these products can act as a doorway into your home, sharing information that perhaps you’d rather it didn’t. Your car tracking your trips. A toy that knows if you’ve skipped school to play video games. It’s unsettling enough that this happens on the web and with our phones. As this capability hits more devices, we may find ourselves taking the stairs instead of a connected elevator or playing with an old-fashioned doll instead of a Bluetooth enabled ball.

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Tuesday, Seattle-based Tableau filed for an IPO with an initial “placeholder” value of up to $150 million. Unlike many tech companies going this route, Tableau is profitable, with net income of $2.7 million in 2010, $3.4 million in 2011, and $1.6 million in 2012. Its revenue more than doubled last year to $127 million. It also boasts an impressive customer list including Bank of America, Barclays, Pfizer, Goldman Sachs and others.

Total venture funding for the company, which will trade on the NYSE under the ticker symbol “DATA,” stands at $15 million in two rounds, both from NEA.

Tableau is not the first new-look data visualization company to go public.  Competitor QlikView went public in July 2010 at $15 per share and is now trading at $24.70. Splunk, which analyzes and visualizes machine data, went public last August at $17 per share and is now trading at just over $39 per share.

The company’s challenge going forward will be to keep up the pace it has set thus far with its “80+ percent year-over-year growth,” said Ovum analyst Fredric Tunvall.  The company will clearly need to keep investing and it may be hard to manage shareholder expectations based on past performance, he said in a statement.

At the same time it must add more advanced and richer analytics to the mix and factor in back-end data management capabilities including data integration, data quality and master data management, Tunvall added in a research note.

QLIK data by YCharts

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The Bellevue, Wash.-based early-stage VC firm will also open an office in Palo Alto, Calif. to better attack these opportunities, said Frank Artale, general partner who will run this new fund, informally dubbed Ignition V. The company brought on Nick Sturiale, a new partner, to run that office.

“We think that businesses and people who work in businesses have been largely underserved for the past 15 years,”  Artale said in a recent interview.

The goal of the dual offices is to promote cross-pollination and collaboration. ”We want to do real social networking here — not just Facebook stuff,” Artale added. “Palo Alto and the Bay Area are super important as great entrepreneurial engines — Cisco, Oracle and other companies down there spit out great entrepreneurs.”

Goal: Apps that combine consumer ease of use with enterprise utility

Ignition has some credibility in the enterprise. Several team members – including Artale, John Connors, and Cameron Myhrvold — are former Microsoft executives. And previous investments include Cloudera, Splunk, Zenprise, DocuSign, Opscode, Parse and Bromium.

New enterprise applications have to work well and look good on laptops and PCs, but also on tablets and phones as the consumerization of IT trend continues, he said.

Artale which described the new fund as “slightly oversubscribed”  took three months to fund. Investors include new and existing university endowments, pension funds and investment companies. Ignition V is smaller than the previous fund, which weighed in at $400 million but will also focus more — eschewing investments in telecom and consumer internet companies, Artale said.

The notion that enterprise IT is back as a hot category is cropping up all over. New vendors — large and small — are building consumer-grade products but for business use. Pivotal Initiative chief Paul Maritz spoke in depth about this at the recent Structure: Data conference in New York and the topic will doubtless crop up again at Structure in San Francisco in June.

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Like a Tivo or other digital video recorder, Chronon records live data on the use of Java programs and lets developers and business people check out the resulting databases and performance charts later.

Companies can use Chronon on top of log-monitoring software such as Splunk, Sumo Logic and Loggly, but founder and CEO Prashant Deva expects customers of both products to look at logs less and less. Gradually, Deva believes his sort of push-to-use code for recording and replaying will replace logging altogether.

Chronon, based in San Mateo, Calif., has already signed up Disney, HSBC, Nokia, Sony, Pearson and other companies as customers. It wants to take on more funding and further build out its product. But Splunk has gone public and gotten lots of attention. Persuading many enterprises to try another, different model won’t be easy.

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Sumo Logic is one of many systems management and analysis startups looking to disrupt their established fields by introducing a software-as-a-service approach to markets traditionally served by software software vendors. Sumo Logic’s core technology is a process, which it calls LogReduce, for detecting patterns among log files so systems administrators have a better idea where to start looking for problems when application begin behaving funkily. In early November, the company released a dashboard feature so users can track certain aspects in real time.

According to Chief Marketing Officer Sanjay Sarathy, one of Sumo Logic’s real values is in how easy it is to get started. Because it’s hosted in the Amazon Web Services cloud, users don’t have to worry about managing any servers or scaling physical infrastructure when traffic — and, therefore, data generation — spikes.  ”We don’t have any professional services people on staff,” Sarathy said. “We don’t need to.”

Although he said Sumo Logic competes mostly with Splunk and companies’ homegrown log-management tools, they’re not the only two companies around. Other cloud-based startups include Loggly (see disclosure) and LogLogic.

Sarathy said Sumo Logic has about 1,000 users of its free version, and another 40 paying customers, including Netflix. That’s a far cry from Splunk, which boasts thousands of users and has established itself as a player in the burgeoning big data space. But the market for products centered on deep analysis of log data is still young and companies of all sizes are getting comfortable with SaaS offerings for certain non-critical workloads.

Disclosure: Loggly is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, the founder of Giga Omni Media, is also a venture partner at True.

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Splunk, of course, has made a name for itself over the past few years as a very useful tool for helping IT administrators search server logs to detect the causes of performance problems. More recently, the company has turned its attention to analytics, claiming its software is the best bet for helping companies analyze their machine data in real time and generate insights that might even affect business decisions. Riding the hype around big data and its considerable traction within IT departments, Splunk had a very successful initial public offering in March.

With Storm, Splunk is targeting users who both prefer a cloud-based delivery model (no software, no hardware and utility billing) and who generate lots of machine data from using cloud services such as Amazon Web Services, Heroku and Google App Engine. Despite its name recognition and on-premise track record, though, Splunk comes into SaaS world facing a fair amount of competition from companies born and bred in the cloud. These include Loggly (see disclosure), Sumo Logic and Papertrail.

What everyone playing in this space realizes is that the intersection of cloud computing and big data is going to be huge. Many people love using cloud services and also love the idea of capturing and analyzing all the data they’re generating while using those services. Combine the two, and you have something special. It remains to be seen who’ll flourish in the long run — there are numerous startups, including New Relic and ScaleXtreme, already bringing analytics into their cloud services — but there’s definitely money to be made.

Disclosure: Loggly is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, the founder of Giga Omni Media, is also a venture partner at True.

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The computer worm, called Shamoon or Disttrack by different security firms, is being compared to a series of malware that targeted Iran’s nuclear program (and reportedly could have been created by a U.S.-Israeli team). But the new malware also stands out because it attempts to make the wiped data entirely uncoverable by overwriting disks with bits of data taken from the web, and also alerts the attacker to how many files were destroyed.

The energy industry and the power grid are particularly susceptible to this kind of attack. Utilities are slow moving entities and are only just starting to add in wireless networks, software and big data storage systems. Some, like former CIA director, James Woolsey, think the smart grid needs to wake up to these security concerns. Security execs have also shown how easy it is to hack a smart meter.

Networks that control things like oil systems, nuclear plants, or water facilities could also do a decent amount of damage if they are successfully attacked and controlled. Electrical fires and shutting off power and water access could be real concerns.

Some big data focused companies are starting to create tools for the energy industry. For example, a startup called Splunk has a tool for oil and natural gas pipeline networks that lets the pipeline owner detect changes in sensor data in real time, enabling the owner to detect if areas have stopped reporting or have under gone changes in pressure. A big data startup called Sqrrl just raised $2 million to build out technology to make big data applications more secure.

I think one of the issues is that all of that innovation and money being invested into “big data” these days needs to trickle down to applications and tools for the energy sector. If utilities and power companies are going to ultimately be IT firms, they should start benefiting from that ecosystem and innovation.

Image courtesy of Greyweed.

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New principal Jake Flomenberg comes from Splunk, where he was director of product management, and was previously at Hadoop pioneer Cloudera. New EIR Nick Mehta was most recently CEO at LiveOffice and has also been a VP at storage provider Veritas (Symantec acquired both companies). Flomenberg will work primarily on Accel’s $100 million Big Data Fund, which it launched last November, while Mehta will likely focus a lot of attention on the intersection of SaaS applications and big data.

The firm’s Big Data Fund targets big data applications and higher-level analytics software rather Hadoop distributions, databases and other infrastructure-level technologies. According to Accel Partner Ping Li, the firm has several companies as part of that portfolio, including Code 42, RelateIQ and Vigilent. A few others are set to come out of stealth mode in the fall. Accel’s previous data-focused investments include Cloudera, Couchbase and Nimble Storage.

Although it’s far from the only area in which Accel is interested right now (mobile, software-defined networks and what Li calls the “Apple-ization” of enterprise IT are all hot), Li did note that data permeates almost all discussions these days. Startups that understand how to use the data they’re getting from customers to build better products are in a really good position.

“You’re getting data whether you like it or not,” Li said, “so figure out how to use it.”

Image courtesy of Shutterstock user Bruce Rolff.

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