CTO shows how big data is more than just a numbers game
Even Barack Obama goes to this supremely qualified big data expert for advice
Stephen Brobst: “I want to know every click and every search that led up to that purchase. . . interactions are orders of magnitude larger than the transactions. . . the interactions give you the behaviour.” Photograph: Cyril Byrne
Brobst was born in Stanford to academic parents and initially followed an academic route. With engineering and computing degrees from University of California Berkeley, a joint MBA from Harvard and Massachusetts Institute of Technology Sloan School of Management, and a master’s and PhD from MIT, he lectured and has written textbooks on data warehousing. He was ranked 14th among top US chief technical officers in 2012 by ExecRank.
Brobst spent time in Poland at the end of the Cold War era. Back in the US, he was involved in co-founding several tech start-ups before, through acquisition, joining data warehousing firm Teradata when it was part of NCR Corporation in 1999.
With expertise in big data and healthcare, Brobst was called to sit on president Barack Obama’s Innovation and Technology Advisory Committee working group for the President’s Council of Advisors on Science and Technology.
In Dublin on a flying visit to see Irish customers, Brobst says a presidential summons is a bit of mysterious process. He received a letter asking him to be part of the 12-person, mostly academic committee.
What was the brief? “The president defined different areas where he wanted to improve the quality of life for US citizens. Healthcare was one, education, energy, security, etc. Our role was to look at opportunities in advanced research and technologies, so it wasn’t something you were going to do in the next year. This was influencing investments the National Science Foundation would make, for example.
“There were a lot of smart people and it was very collaborative, good ideas and no politics because we were all there temporarily. It was great.”
They published a public report in which the headline was: Every Federal Agency needs to have a Big Data Strategy. Was he happy with the impact of the report within the White House? “Certainly! I’ve already seen some results.”
Big data seems a subject of endless personal enthusiasm for Brobst. Asked to give a snapshot of where it is now, he grows animated. It has already moved along, beyond the first wave of online transaction data, which was mainly about weblog data and people’s interactions on websites, aimed to improve ad placement, he says.
“The second wave, which is where we are now, is social media analytics. What are people tweeting and putting on Facebook and writing on their blogs? But the next generation is what I’m really excited about, and that’s sensor data. It’s an area that has huge potential.”
Big data “is no longer the lowest level of transactions, it’s the interactions. So I want to know every click and every search that led up to that purchase. And the interactions are orders of magnitude larger than the transactions. The transactions give the value of the customer, and the interactions give you the behaviour. And understanding the behaviour is very important for understanding how to improve the experience for that person. The volume of data creates more insight.”
He gives the example of healthcare. “Currently, you probably get 15 minutes of healthcare data collection a year. You go in for your annual physical and they bop your knee and make you cough. It’s pitiful. The average automobile is instrumented far better than the human body.”
Imagine collecting health data on a day to day basis, he says, which some apps and devices already do with sleep and exercise information. But take it further – he cites a research collaboration between Google and Novartis to use contact lenses to measure blood sugar levels.
“Imagine these kinds of possibilities and all that data we can bring together to provide a far more proactive healthcare programme for the patient.” Healthcare is under cost pressures internationally, he says. “But healthcare is one of these things where you are not allowed to lower quality; you have to increase quality while lowering cost.” He argues that the only way to do this is through better data.
He agrees a larger public discussion on privacy and data issues needs to be had. “I think the average consumer underestimates the risk but the extreme privacy advocates overstate it so it’s something in the middle.”
But Europeans have this right under existing data protection laws, he’s told, to some surprise. “An individual consumer can do that to any company?” Yes, if the company is based in the EU and holds data on an individual.
Still, he maintains a traditional US corporate view on data protection. “There’s a big cultural difference between the Europe and the US. “What I observe in Europe is there’s much more reliance on government to take a role. [Consumers] expect governments to protect [them] and very often the government is imposing rules without a full understanding of what the implications are, in terms of reducing the value proposition for the consumer.
“For example, Germany is clearly one of the most strict in this area and there are laws around the retention of certain things like call data records. And even if, as a consumer, I give permission to the telecommunications company to keep a history of my calling so they can offer me a better price plan package and so on, that’s not allowed by law to happen.
“And this to me doesn’t make sense. It’s overstepping the government’s role to impose things that prevent consumers from getting value from their data, through commercial organisations.”
He agrees that revelations about data surveillance by the US National Security Agency have raised many issues, but adds, “It’s not like the NSA hacked all the data. The NSA got a government subpoena, if you want to call it that, to get access to the data and companies complied with the requests. That’s a little bit different from someone hacking in and stealing the data.”
He adds: “So really what the whole Snowden thing demonstrated is that if that company’s database is in the jurisdiction of a government, and that government can under some law, ask for that data to be provided, then there’s exposure there that the citizens of some other country might not be comfortable with.”
Part of the fall-out has been countries or regions wanting to keep data within their own boundaries.
Is a European-based cloud a concern for Teradata? “Yes and no. A lot of Teradata deployments are deployed by companies who put it in whatever data centre they want to use. If they want to use a US data centre, if they want to put it in an Irish data centre, we don’t care. From that point of view, we’re neutral.”
However, SMEs want to access Teradata services in a cloud infrastructure. “So we have a cloud offering. That’s been deployed in North America. And in theory, we could sell those cloud services to a company in Ireland. But given this whole NSA thing, would an Irish company be comfortable telling their customers their data is being analysed in a database sitting in a US cloud infrastructure where it could be subpoenaed?”
Teradata could have a cloud in the EU. “The EU is a big market for us and we have enough scale in this marketplace that we could deploy an EU cloud infrastructure. But it doesn’t make sense from a scalability point of view for us to deploy a cloud by country.”
He says Teradata supports the EU move to a proposed data protection regulation over the next year, because it will give a consistent legal framework across the EU. “We want an EU-level set of rules that we can adhere to and, if we can deploy a Teradata cloud infrastructure at EU level, that would be just fine.”
Is he saying the company intends to do so once the new regulation is in place? “I would not be surprised.” He laughs. “I would be surprised if it wasn’t true.”
The company’s broader business picture has been volatile recently. Shares dropped in past months, when it reported at the bottom end of expectations.
“The market is not always rational in the long term and a good investor is a long-term investor not a short-term investor,” Brobst says. “There’s a lot of disruption in the market right now. . . When they don’t understand something, some people get cold feet and they pull out. Where others see it as an opportunity and they invest more, right?” One of those is Warren Buffet who picked up nine million Teradata shares in May.