Building a Better Starbucks With Big Data

Jim Baum, IBM Netezza, at Structure Big Data 2011Data isn’t the solution to business problems. Pulling data into applications and using it to make decisions and improve the user experience is the way to solve business problems said Jim Baum, the CEO of Netezza, an IBM (s ibm) company. Speaking at the Structure Big Data event in New York today, Baum explained that the technology to deal with big data is the hard problem many big and small companies are trying to solve today, but once the infrastructure is in place the industry needs to turn to integrating that into products.

But in order to use data to help deliver an impact for consumers, such as regionally customized clothing stores or a Starbucks that keeps serving hot caramel apple ciders through the summer months during colder years, the physical distribution chain has to change. Baum pointed out that grocery stores do a masterful job crunching data from their customers and about what is selling to them in order to predict inventory, but that inventory is still delivered on pallets in trucks and then loaded and unloaded by people.

He doesn’t see a huge wave of change coming at translating the data gains made in the digital world to the physical world anytime soon because many of those businesses aren’t appealing to venture capitalists, who are looking for less capital-intensive deals.

Much of his talk was about data interacting with people and enabling people to make faster and better decisions, but he also looked ahead to how machines can use data to interact and react in real time without human intervention. He gave the example of smart grids, which would involve appliances talking to the electric grid and utilities to determine the optimal time to use energy. For example, your dishwasher may wait till power is cheaper or the load on the electric grid is lighter before running. His thesis was that data can make the world more efficient, help companies make more money and improve the user experience, but we’ve got to solve the technology issues first.

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