We shop online, we send emails, we subscribe to newsletters, we stream television shows, we listen to podcasts, we Instagram, we tweet, we share on Facebook, we Google, and in doing so, we create data.  We create tons of data. 

In fact, 1.7MB of data is created by every person on earth every second of the day. In the last two years alone, 90% of the world’s data has been created according to the Information Overload Research Group (IORG).

Where is all of this data coming from?

Every day, 306.4 billion emails are sent, and 5 million thoughts are Tweeted. One scroll through our inbox might make us feel like the extent of data overload isn’t that unbelievable, after all. 

The fact is that we do a lot of online sharing. Companies that want consumer dollars know this, and they aren’t standing idly by. Beyond the giants of the tech industry like Google and Amazon, small- and medium-sized enterprises increasingly want effective data analytics tools to maximize revenue, according to Advance Market Analytics. 

Interestingly, according to Forbes, jobs including Data Scientists and Big Data Engineers are in demand now more than ever before. These companies are investing in better data infrastructure to get better data. 

All of that data, and all of those needs, make the data infrastructure ecosystem increasingly complex. Here’s what investors should know about this growing industry that’s not expected to slow down anytime soon.

What is data infrastructure?

Before diving into data infrastructure, let’s discuss big data—or, the information that companies everywhere are trying to generate insights from. Big data has four “Vs” or measures of value: volume-based, velocity-based, variety-based, and veracity-based. 

Volume-based value means that “the more comprehensive your integrated view of the customer and the more historical data you have on them, the more insight you can extract.”

Velocity-based value means that the faster that “you can process information into your data and analytics platform, the more flexibility you get to find answers to your questions via queries, reports, dashboards, etc.” 

Variety-based value means that “the more varied customer data you have – from the CRM system, social media, call-center logs, etc. – the more multifaceted view you develop about your customers.”

Veracity-based value refers to the accuracy and cleanliness of customer data. 

Why do these Vs matter, again? They are the end goal of good data infrastructure, which is the way that data is used to provide useful insights. It means having the “right tools for storing, processing and analyzing data.

Let’s start with storage. It seems like almost everything is stored on the cloud these days, but where exactly is that?

The cloud is typically an off-premises data center that is accessed remotely through the internet. Cloud data centers allow clients to manage their data through third-party managed services, using hardware that’s run and serviced offsite by cloud companies in physical locations around the world. In essence, these companies are creating a virtual infrastructure for the systems that used to be housed on-site in every corporation.

With the overwhelming growth in data creation, physical data centers that service these cloud companies are multiplying, and so is investment in them. 

Storage, of course, is only one component of data infrastructure. Beyond storage, data infrastructure includes the network that transfers the data, the applications that host the analytics tools and “the backup or archive infrastructure that backs it up after analysis is complete.”

Why invest in data infrastructure? 

According to a report by the Motley Fool, “data is the oil of the digital economy.” 

Effective data infrastructure means more money and more efficiency, and not just for retailers figuring out how to get an online shopper back to their site to add something to a shopping cart. 

Bankers, for example, can use big data to help minimize risk and fraud. Moreover, manufacturers can use it to quickly troubleshoot problems, making better business decisions. 

For all sorts of businesses, benefits of using data strategically or prioritizing good data infrastructure include reduced costs, reduced time spent, optimization of product development and allocation, and more informed decision making.

According to an Advance Market Analytics report, the demand for big data as a service is driven by (1) an increasing demand for real time data analytics solutions, (2) the growing use of big data to identify fraud, and (3) a significant data influx for small and medium sized enterprises that want effective data analytics tools to maximize revenue. These are aided by market trends including the (1) the rise of cloud computing and the integration of big data with cloud-based services, (2) a huge influx of data, and (3) more modern business models. 

The power of big data is a frontier of sorts. And, beyond the companies looking to improve their own businesses by employing data services, there are a multitude of innovative companies streamlining huge amounts of data into useful information. 

For investors, this means that there is more than one way to invest in this growing industry. Fortunately, there are a number of ETFs and mutual funds available for investors interested in supporting big data and the growth of data infrastructure. For instance, a search on Magnifi suggests a number of different options.

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