Top 3 Big-Data Stocks for 2012
NEW YORK ( TheStreet) -- We all know that Silicon Valley loves buzzwords, but investors should pay close attention to the "big data" market, which could spell big money for companies such as IBM(IBM) , EMC(EMC) and Teradata(TDC) .
Big data refers to the management of vast quantities of unstructured data, or information that is outside the realm of traditional databases. Examples include email messages, PowerPoint presentations, audio, video and social media information.
There's no shortage of publicly trade companies that are riding the big data wave. The biggest names are IBM, EMC and Teradata, which have key weapons in their arsenals. Other companies playing in this rapidly-growing space include Oracle(ORCL) , NetApp(NTAP) , HP(HPQ) and Hitachi's(HIT) subsidiary Hitachi Data Systems . Business intelligence specialists Qlik Technologies (QLIK) and Tibco Software (TIBX) are also making a name in big data.
"Increasingly, the transformation of business itself is being driven by the ability to harness big data," noted David Goulden, the EMC CFO, during the company's recent fourth-quarter conference call. Businesses that can quickly use the vast troves of data both inside and outside their companies, he added, can gain competitive advantage.
Big data is clearly a growth area. JMP Securities estimates valued the market at $9.1 billion market in 2011, a figure that will reach $86.4 billion by 2021.
Read on for more details on tech's top 3 big-data stocks: IBM
Market Cap: $236.42 billion
Hardware and software giant IBM, which reports its fiscal first-quarter results on Tuesday, has an extensive strategy for tackling big data. At the heart of Big Blue's efforts are data warehouse appliances from the company's $1.7 billion acquisition of Netezza in 2010.
"IBM sells standalone Netezza Big Data appliances but is also incorporating them in a broader strategy with its other database, business intelligence and analytics and data management solutions," explained Charles King, principal analyst at research firm Pund-IT.
Speaking during IBM's fourth-quarter conference call in January, CFO Mark Loughridge noted that the firm's Netezza revenue climbed 70% year-over-year. "We could have done even better on Netezza but we sold out the box," he explained. "Netezza turned out to be a very, very strong acquisition for us."
Additionally, almost a third of Netezza transactions during the quarter were with new customers. Big Blue has also expanded the Netezza customer base by over 40% since completing the acquisition less than two years ago.