A Moment of Clarity in the Big Data Hype Noise
May 30, 2012
Which is a more beneficial tool to utilize in business, algorithms or big data? Both are useful, but when put to a test there was a clear winner. You might be surprised by the answers in the article Data Is More Important Than Algorithms.
Netflix offered to pay a million dollars in 2006 to whoever could improve their recommendation system by at least 10%. A year passed and a team improved their system by 8.43%. The company also provided the source code of algorithms utilized. After further evaluation, Netflix decided not to use the codes based on the effort necessary to evolve the code into their production environment.
Their reasoning was simple;
“Algorithms are certainly important but they only provide incremental value on your existing business model. They are very difficult to innovate and way more expensive to implement.”
“Most importantly, you should focus on your changing business — disruption and rapidly changing customer behavior — and data and not on algorithms. One of the promises of Big Data is to leave no data source behind. Your data is your business and your business is your data. Don’t lose sight of it.”
It is ironic that Netflix basically paid a high price for nothing in the end. However they did a service by proving big data to be the most beneficial tool. Netflix paid a million to allow a moment of clarity in the big data hype noise.
Jennifer Shockley, May 30, 2012
Sponsored by PolySpot
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