Interestingly, the same hot trend of looking for the next big startup continues to keep charging on, but without all the fanfare and definitely without all the after-hour parties. Look closely at any local markets in the hot areas of technology and startups are seeing anywhere from $4 million to as much as $25 million a shot in investor injections from real-time, recent venture capital. Clearly, the VC crowd are still very much active and continue to be so going forward for the conceivable future.
Two things appear to be driving VC activity, particularly in the realm of extremely new, unheard of startups: the rise of managing and harnessing value from big data, and the demand for new ideas on how to design data infrastructure. Both are technical enough to filter out the fly-by-night chatter; only startups who truly have the engineering or data management background are going to get out of the starting gate with a viable product in these two fields.
Big companies are looking inward at all their data resources and realizing there are treasure troves of trend information waiting to be unlocked. However, most people don’t want to go through the hassle of earning a masters in statistics or quant theory to figure how best to interpret gigabytes of data. This is where new tools are making significant inroads with brand new ideas on how to sort, gather, filter, screen, retrieve and manage lots and lots of data all at once, especially data created by different formats. How big is the interest? Considering the fact that $232 billion was spent in IT so far in 2016 particularly on Big Data, there’s a lot of attention on the matter.
Managing software files is only part of the picture, however. The infrastructure also needs to be redesigned to handle both storage and throughput of large data management so that networks are getting bogged down to the point of browning out because lots of users are simultaneously chewing through big files. A common example of this is where real time metrics data is married with geospatial tools and being transferred continuously over a network. The bandwidth alone can slow down other systems almost instantly on an enterprise system.
So startups are also coming up with new and previously unheard of ideas of how to move electronic data physically as well as digitally. Both scalability as well as speed matter tremendously and these new players are going places were tried and true systems can’t touch because they are locked into existing system protocols and paradigms. That makes for market disruption on a big scale.
The market’s need for new database architecture has also influenced what VC firms are looking at for their next investment opportunities. They are recognizing the need for solutions that meet scalability demands as wells as run more efficiently without bogging down a network. Operating cost is a big factor as well, so those with ideas on how to do more with less are also getting VC attention.
So whether someone comes up with the next best thing since a Hadoop cluster or they invent an entirely new ISO level of data transfer that no one thought of, VC firms are watching and listening intently, ready to get on board with a startup that shows serious promise as a disrupter and new, effective way of managing big data.