A Look at the History and Future of Predictive Analytics and Big Data

The Analytics Big Bang

Predictive analytics reaches critical mass as

Big Data and new technologies collide



Key Innovations

+ Monte Carlo simulations

+ Computational models for neural networks

+ Linear Programming



+ Non-linear programming

+ Computer-based heuristic problem solving



+ Real-time analytics

+ Prescriptive analytics





+Rversion 1.0

+Standardization of natural language processing

+Apache Hadoop





+Analytic exchanges that enable global collaboration

+Anticipatory analytics



New Users



+Government Agencies



+Corporations & Research Institutions



+Mid-size Businesses & Tech Startups



+Small Businesses & Analytic Experts



Analytic Innovation Accelerates 2

000���2009: Production version of R language for analytic software grows from 0 to 1,000,000 users�۪



Buy! Buy! Buy!

2000-2012: Analytic software market grows from $1 1 billion to $35 billion



Hyper-connectivity

2012: 1.7 billion mobile devices sold and

2+ billion people on social networks add to

data explosion





+Anyone



Collaboration leads to massive innovation

Personalization of every event, experience, offer

Solving the Unsolvable in medicine, energy, agriculture and more Analytic Talent Gap grows as demand skyrockets

Affordable and Accessiblle analytics as tool become broadly adopted





Milestones



1930a-40's



Dawn of

Computer Age



1940s:

Turing and

Good conduct groundbreaking work with ���weights of evidence�۝ to decode German messages in WWII



1940:

Kerrison Predictor automates targeting of anti-aircraft weapons against enemy planes



1944:

Manhattan Project team runs computer simulations to predict behavior of nuclear chain reactions



1950s-1960s



Commercialization

of Analytics



1950:



1950:

ENIAC computer generates first models to forecast weather



1951:

First university degree program in Operations Research (Case Institute of Technology)



1956:

Analytics solves ���shortest path problem,�۝ improving air travel and logistics



1958:

FICO applies predictive modeling to credit risk decisions



1966:

Future SAS Institute starts as

research project funded by US

Department of Agriculture



1970s-1990s



Analytics Goes Mainstream



1973:

Black-Scholes model created to predict optimal price for stock options over time



1980:

First commercial tool for building model-driven Decision Support Systems is marketed



1992:

FICO deploys real-time analytics

to fight credit card fraud





1995:

Amazon and eBay go live; race to personalize online experience is on



1998:

Google applies algorithms to web searches to maximize results relevance



1998:

Moneyball changes pro sports as Oakland A�۪s use analytics for a competitive edge





2000-Present



Analytics�۪ Deep Impact



Widespread analytics use:

dynamic ticket pricing, shopping and movie recommendations, traffic management and much more



Natural language processing:

unlocks analytic value of unstructured data

(e.g., Facebook posts, web pages, PDFs, email, Word docs)



Big Data arrives:

2.5 quintillion bytes of data created each day



Server farms and low-cost, high-speed processing:

make distributed computing and Big Data analytics viable for most organizations



Growing demand for talent:

190,000 more analytics experts and 1.5

million more data-literate managers needed

in US alone by 2018





Next



Ubiquitous Analytics



Cloud-based analytic exchanges:

lead to Collaboration Economy between

developers, businesses, researchers, scientists and entrepreneurs



Individuals use analytics in everyday decisions:

about education, careers, finances,

healthcare, peer-to-peer renting and lending

(���share economy�۝)





Curing rare diseases:

becomes a financial winner



Predictive policing.

preempts many crimes



Anticipatory analytics:

makes it nearly impossible to crash a car or

burn dinner





Mass marketing campaigns are dead:

all customer interaction is personal



Data licensing trumps data purchasing:

in a world where data gets stale in minutes



www.fico.corn/analytics

.

2013 Fair Isaac Corpoatlon. All rights reserved. The Analytics Big Bang + Analytic exchanges that enable global collaboration + Anticipatory analytics Predictive analytics reaches critical mass as Big.Data and new technologie's collide . + R version 1.0 + Standardization of natural language processing + Apache Hadoop Anyone + Real-time analytics + Prescriptive analytics Personalization of every event, experience, offer + Non-linear programming + Computer-based heuristic problem solving + Monte Carlo simulations Collaboration Solving the Unsolvable in medicine, energy, agriculture and more + Computational models for neural networks Small Businesses & Analytic Experts + Linear programming Analytic Innovation Accelerates 2000-2009: Production version of R language for analytic software grows from 0 to 1,000,000 users' Buy! Buy! Buy! 2000-2012: Analytic software market grows from $11 billion to $35 billion? Analytic Talent Gap grows as demand skyrockets Mid-size Businesses & Tech Startups 21st Century's Sexiest Job 2011-2012: Data scientist job posts jump 15,000%* Corporations & Research Institutions Affordable and Accessible analytics as tools become broadly adopted Government Hyper-connectivity 2012: 1.7 billion mobile devices sold and 2+ billion people on social networks add to data explosion Agencięs 1930s-40s 1950s-1960s 1970s-1990s 2000-Present Next Dawn of Commercialization Computer Age of Analytics Analytics Goes Mainstream Analytics' Deep Impact Ubiquitous Analytics 1940s: 1950: 1973: • Widespread analytics use: dynamic ticket pricing, shopping and movie recommendations, traffic management and much more Turing and Good conduct ENIAC computer generates first models to forecast weather groundbreaking work with "weights of evidence" to Black-Scholes model created to predict optimal price for stock options over time • Cloud-based analytic exchanges: lead to Collaboration Economy between developers, businesses, researchers, scientists and entrepreneurs 1951: 1980: First university degree program in Operations Research (Case Institute of Technology) First commercial tool for building model-driven Decision Support Systems is marketed • Natural language processing: unlocks analytic value of unstructured data (e.g., Facebook posts, web pages, PDFS, email, Word docs) • Individuals use analytics in everyday decisions: about education, careers, finances, healthcare, peer-to-peer renting and lending ("share economy") decode German messages in WWII 1940: 1956: 1992: Analytics solves "shortest path problem, improving air travel and logistics Kerrison Predictor automates targeting of anti-aircraft FICO deploys real-time analytics to fight credit card fraud • Big Data arrives: 2.5 quintillion bytes of data created each days Curing rare diseases: becomes a financial winner 1995: • Server farms and low-cost, high-speed processing: make distributed computing and Big Data analytics viable for most organizations weapons against enemy planes 1958: FICO applies predictive modeling to credit risk decisions Amazon and eBay go live; race to personalize online experience is on • Predictive policing: 1944: preempts many crimes 1998: Manhattan Project team runs computer 1966: Google applies algorithms to web searches to maximize results relevance • Growing demand for talent: 190,000 more analytics experts and 1.5 million more data-literate managers needed in US alone by 20186 Anticipatory analytics: makes it nearly impossible to crash a car or burn dinner Future SAS Institute starts as simulations to predict behavior of nuclear chain research project funded by US Department of Agriculture 1998: Moneyball changes pro sports as Oakland A's use analytics for a competitive edge Mass marketing campaigns are dead: all customer interaction is personal reactions • Data licensing trumps data purchasing: in a world where data gets stale in minutes FICO 1 http://bits.blogs.nytimes.com/2009/01/08/r-you-ready-for-r/ 2 IDC Market Analysis: Worldwide Business Analytics Software 3 http://hbr.org/2012/10/data-scientist-the-sexiest-job-of-the-21st-century/ 4 http://www.indeed.com/jobtrends?q=%22Data+Scientist%22&l-1&relative-1 5 http://marciaconner.com/blog/data-on-big-data/ 6 http://spotfire.tibco.com/blog/?p=6886 www.fico.com/analytics © 2013 Fair Isaac Corporation. All rights reserved. Key In inovations New l Users Milest ones leads to massive innovation