Big Data IPO

Brian Hicks

Written By Brian Hicks

Posted November 22, 2013

Let’s say you’re looking for flea shampoo for your pet online, and you find the perfect product that will finally get rid of those pesky fleas. You go online later to find pop-up ads recommending price discounts for all your pet-based needs. Or you may get some ads showing the lowest car insurance rates in your city without ever having typed in your location.

big dataThis is the new age of Big Data, where every aspect of your Internet surfing ventures is tracked, quantified, and analyzed so companies can monitor consumer behavior.

It is an issue that has come more to light with the exposing of NSA surveillance, and it raises certain ethical and moral questions.

Health insurance company Humana (NYSE: HUM) is using Big Data to profile who is most at risk of needing hospital care. Even Samsung (OTC: SSNLF) uses it to generate certain content for its TV device.

While consumer tracking is a controversial topic, it can be a useful tool for companies to make better business decisions in strategic operations.

Big Data is expected to be a $34 billion spending powerhouse by the time 2020 rolls around, and data mining companies that have made IPO debuts are having strong showings on the market.

But it is much more than just tracking human behavior. Big Data is emerging as a sophisticated artificial intelligence-based system that can pinpoint operational deficiencies, enhance company security, or quantify mass research from focus groups or polling.

Take, for instance, Sumo Logic, a company that may go public in 2015. The company is in the process of hiring a chief financial officer, Reuters reports, a signal that the company may be ready to make a public debut soon. This has even been confirmed by CEO Vance Loiselle.

The company had a successful fundraising campaign for $30 million in late 2012, and it does not require additional cash for another year.

Based in California, Sumo essentially converts all necessary data logs into new sources of security, operations, and intelligence compliance. Sumo services also allow users to see raw data in real-time for quicker decision making.

To get a glimpse of how Sumo Logic may perform, all we need to do is examine how its competitors are doing on the market. Splunk (NASDAQ: SPLK) has doubled its earnings since its debut in April of 2012, and the company has won several large deals in the process. Tableau Software’s (NYSE: DATA) shares rose 30 percent since its debut in May.

Major companies like Amazon (NASDAQ: AMZN) require the services of these companies to track consumer buying patterns and to achieve more efficient business operations.

Why Sumo Logic?

Recent studies have shown that companies using Big Data have had significant advantages over companies that don’t use it. But because collecting mass data is a relatively new phenomenon, companies are going to need the services of firms like Sumo Logic.

From the Economic Times:

“The leaders are twice as likely to be in the top quartile of financial performance within their industries; five times as likely to make decisions faster than market peers; three times as likely to execute decisions as intended and twice as likely to use data very frequently when making decisions.”

This is a great point to highlight in marketing to businesses of all types, and it is just the right note that Sumo wants to hit with new clients.

On Sumo’s end, the company expects anywhere from 250 to 300 new customers by January, and growth for next year is expected to skyrocket to 300 percent.

Sumo also won major client McGraw-Hill Financial (NYSE: MHFI), and it recently integrated with CloudTrail, an Amazon Web Services (AWS) system that monitors application programming interface (API) calls made through this service. AWS users can take advantage of Sumo’s services to accumulate and analyze data without ever installing software.

Sumo is offering a consistent service that diverse companies of all backgrounds can use. It’s certainly one company to gear up for your portfolio.

Sumo Investment

Sumo is one company to keep on your radar in the near future. Big Data is not just a fad; it’s an emerging trend here to stay.

Big Data is no longer restricted to large corporations. Software is available at cheaper rates for small businesses, and small companies like Sumo are gaining more business credibility. Even small data collection services like Google Analytics are available to anyone for free.

We know the government and its contractors use Big Data to gather intelligence on domestic and overseas affairs, and these newer forms of technology concentrated in the public sector will flow more seamlessly into the commercial realm.

There is no guarantee that Sumo will do well on the market, but Big Data trends are only going up, and the company’s peers are doing quite well.

What should you expect when this company goes public?

Its public status will gain the company more attention. And I would expect deals with the majors like Google (NASDAQ: GOOG), Amazon, and other large entities, as is the case with Sumo’s peers that have recently gone public.

Sumo will also get the necessary revenue to enhance its services, making the company stronger. And you can be sure Sumo will make more of a splash into social media territory, as companies like Facebook (NASDAQ: FB) have heavily captured the advertising market.

Sumo will be somewhat behind compared to companies that have already gone public, but the company is already in a strong position in the private sphere.

In the meantime, you can get in on companies that have already made IPO entrances and ride the wives until Sumo makes its market splash on Wall Street.


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