Firms betting on big data business

January 3, 2014

Samsung, SK to challenge LG in new market

Officials at LG CNS’s data control center in Sangam-dong, northern Seoul, check the process of data filing by its clients in this file photo.  (Courtesy of LG CNS)

Officials at LG CNS’s data control center in Sangam-dong, northern Seoul, check the process of data filing by its clients in this file photo.
(Courtesy of LG CNS)

By Kim Yoo-chul

“Big data” is no longer a strange phrase as it’s been sweeping the technology world, inspired by the constant need among companies to upgrade their business processes, enhance performance and efficiency.

One of the major forces driving the big data market is the continuous rise of the so-called “unstructured data” and the demand to provide advanced and predictable analytics, experts and officials said.

Against this backdrop, the nation’s top-tier conglomerates are expanding investment in the promising market to win more orders from private firms and government-organized business projects focusing on big data.

Officials at Samsung SDS, LG CNS and SK C&C, affiliates of Samsung, LG and SK Groups, respectively, said they are seeking to improve their competitive edge in the highly promising market, creating sophisticated analytical solutions and data management platforms.

LG CNS is considered a bit ahead of Samsung SDS and SK C&C.

LG CNS first established an independent analytics division in July.

“Since then, the LG affiliate has been putting in more resources with an aim of becoming one of the nation’s most-trusted business-solution providers,” said Shin Eun-ji, a spokeswoman at LG CNS.

Currently, it has some 200 consultants for big data, including experienced Hadoop engineers and analysts.

“We have begun yielding some visible results. We are now in the stage of acquiring and learning business know-how by providing related services to LG Group affiliates,” said the spokeswoman, adding LG CNS will expand business territories and coverage.

LG CNS is also making efforts to boost the marketability of its big data-related solutions outside the Korean peninsula.

It has already presented its own big data platform and analytic tools at international exhibitions. LG CNS formed an alliance with MapR Technology to grow the business.

SDS is fast catching up with LG CNS.

The Samsung affiliate is gaining ground in this market because it has a track record of managing various pilot projects by Samsung’s technology affiliates such as Samsung Electronics and Samsung Life Insurance, said SDS officials.

“SDS has been active in winning projects for building big data and providing consulting to state-run firms, financial institutions and even manufacturing companies, other than Samsung units. It’s too early to talk about overseas business expansion. Our top priority is to gain leverage in the local market first,” said an official at SDS.

“For example, forecasting demand for Samsung’s new devices with very minor errors is really critical to cutting inventories, saving costs and boosting management efficiency. SDS’s role inside Samsung is crucial. I can say the future of Samsung’s supply chain management (SCM) structures will be dependent upon the capability of our big data management.”

The services segment continues to be the largest segment in terms of consulting and integration and deployment services, according to MarketsandMarkets, a research firm.

The software segment is growing at a healthy clip and the researcher forecasts that it will show a compound annual growth rate (CAGR) of 28.7 percent through 2018.

The SDS official said the Samsung affiliate, led by new CEO Jun Dong-soo who will replace outgoing Korean-American CEO Alfred S. Koh, is seeing fiercer competition here as the market is expected to be driven by the emergence of the massive amount of data being generated and innovative technology implementation.

SK C&C, the system integration (SI) affiliate of the SK Group, recently launched a so-called “big data business task force.”

A C&C spokesman said it will increase the number of experts working on the specially organized team to 100 from 50.

“It’s true big data is the latest trend in the global information and technology (IT) industry in creating new business opportunities. Korea is little bit late in big data. But next year will totally be different. We can’t afford to lose such new business potentials,” said the C&C spokesman, adding it has interests in finding new businesses in each major industry, like telecommunications, semiconductor, finance, security, service and manufacturing.

Other than the big three local SI providers, Asiana IDT, a second-tier SI company, is offering educational programs to train analysts in big data by teaming up with top U.S. colleges which have highly advanced and proven big data courses.

MarketsandMarkets said that 100% North America is expected to be the biggest market in terms of revenue contribution, while emerging economies such as the Asia-Pacific, the Middle East, Africa and Latin America are expected to experience increased market traction with high CAGRs.

The research firm expects that the increasing of the big data market in developing economies will further enhance overall market growth.

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