What is Big Data? Introduction, Uses, and Applications.

Vishesh Arora 26 May, 2023 • 9 min read

We produce a massive amount of data each day, whether we know about it or not. Every click on the internet, every bank transaction, every video we watch on YouTube, every email we send, every like on our Instagram post makes up data for tech companies. With such a massive amount of data being collected, it only makes sense for companies to use this data to understand their customers and their behavior better. This is the reason why the popularity of Data Science has grown manifold over the last few years. Let’s try to understand what is big data and its benefits and uses!

This article was published as a part of the Data Science Blogathon.

What is Big Data?

Big data is exactly what the name suggests, a “big” amount of data. Big Data means a data set that is large in terms of volume and is more complex. Because of the large volume and higher complexity of Big Data, traditional data processing software cannot handle it. Big Data simply means datasets containing a large amount of diverse data, both structured as well as unstructured.

Big Data allows companies to address issues they are facing in their business, and solve these problems effectively using Big Data Analytics. Companies try to identify patterns and draw insights from this sea of data so that it can be acted upon to solve the problem(s) at hand.

Although companies have been collecting a huge amount of data for decades, the concept of Big Data only gained popularity in the early-mid 2000s. Corporations realized the amount of data that was being collected on a daily basis, and the importance of using this data effectively.

5Vs of Big Data

  1. Volume refers to the amount of data that is being collected. The data could be structured or unstructured.
  2. Velocity refers to the rate at which data is coming in.
  3. Variety refers to the different kinds of data (data types, formats, etc.) that is coming in for analysis. Over the last few years, 2 additional Vs of data have also emerged – value and veracity.
  4. Value refers to the usefulness of the collected data.
  5. Veracity refers to the quality of data that is coming in from different sources.
What is Big Data? - BPI - The destination for everything process related

How Does Big Data Work?

Time needed: 15 minutes

Big data involves collecting, processing, and analyzing vast amounts of data from multiple sources to uncover patterns, relationships, and insights that can inform decision-making. The process involves several steps:

  1. Data Collection

    Big data is collected from various sources such as social media, sensors, transactional systems, customer reviews, and other sources.

  2. Data Storage

    The collected data then needs to be stored in a way that it can be easily accessed and analyzed later. This often requires specialized storage technologies capable of handling large volumes of data.

  3. Data Processing

    Once the data is stored, it needs to be processed before it can be analyzed. This involves cleaning and organizing the data to remove any errors or inconsistencies, and transform it into a format suitable for analysis.

  4. Data Analysis

    After the data has been processed, it is time to analyze it using tools like statistical models and machine learning algorithms to identify patterns, relationships, and trends.

  5. Data Visualization

    The insights derived from data analysis are then presented in visual formats such as graphs, charts, and dashboards, making it easier for decision-makers to understand and act upon them.

Use Cases

Big Data helps corporations in making better and faster decisions, because they have more information available to solve problems, and have more data to test their hypothesis on.

Customer Experience

Customer experience is a major field that has been revolutionized with the advent of Big Data. Companies are collecting more data about their customers and their preferences than ever. This data is being leveraged in a positive way, by giving personalized recommendations and offers to customers, who are more than happy to allow companies to collect this data in return for the personalized services. The recommendations you get on Netflix, or Amazon/Flipkart are a gift of Big Data!

Machine Learning

Machine Learning is another field that has benefited greatly from the increasing popularity of Big Data. More data means we have larger datasets to train our ML models, and a more trained model (generally) results in a better performance. Also, with the help of Machine Learning, we are now able to automate tasks that were earlier being done manually, all thanks to Big Data.

Machine Learning: definition, types and practical applications - Iberdrola

Demand Forecasting

Demand forecasting has become more accurate with more and more data being collected about customer purchases. This helps companies build forecasting models, that help them forecast future demand, and scale production accordingly. It helps companies, especially those in manufacturing businesses, to reduce the cost of storing unsold inventory in warehouses.

Big data also has extensive use in applications such as product development and fraud detection.

How to Store and Process Big Data?

The volume and velocity of Big Data can be huge, which makes it almost impossible to store it in traditional data warehouses. Although some and sensitive information can be stored on company premises, for most of the data, companies have to opt for cloud storage or Hadoop.

Cloud storage allows businesses to store their data on the internet with the help of a cloud service provider (like Amazon Web Services, Microsoft Azure, or Google Cloud Platform) who takes the responsibility of managing and storing the data. The data can be accessed easily and quickly with an API.

Hadoop also does the same thing, by giving you the ability to store and process large amounts of data at once. Hadoop is an open-source software framework and is free. It allows users to process large datasets across clusters of computers.

Big Data Tools 

  1. Apache Hadoop is an open-source big data tool designed to store and process large amounts of data across multiple servers. Hadoop comprises a distributed file system (HDFS) and a MapReduce processing engine.
  2. Apache Spark is a fast and general-purpose cluster computing system that supports in-memory processing to speed up iterative algorithms. Spark can be used for batch processing, real-time stream processing, machine learning, graph processing, and SQL queries.
  3. Apache Cassandra is a distributed NoSQL database management system designed to handle large amounts of data across commodity servers with high availability and fault tolerance.
  4. Apache Flink is an open-source streaming data processing framework that supports batch processing, real-time stream processing, and event-driven applications. Flink provides low-latency, high-throughput data processing with fault tolerance and scalability.
  5. Apache Kafka is a distributed streaming platform that enables the publishing and subscribing to streams of records in real-time. Kafka is used for building real-time data pipelines and streaming applications.
  6. Splunk is a software platform used for searching, monitoring, and analyzing machine-generated big data in real-time. Splunk collects and indexes data from various sources and provides insights into operational and business intelligence.
  7. Talend is an open-source data integration platform that enables organizations to extract, transform, and load (ETL) data from various sources into target systems. Talend supports big data technologies such as Hadoop, Spark, Hive, Pig, and HBase.
  8. Tableau is a data visualization and business intelligence tool that allows users to analyze and share data using interactive dashboards, reports, and charts. Tableau supports big data platforms and databases such as Hadoop, Amazon Redshift, and Google BigQuery.
  9. Apache NiFi is a data flow management tool used for automating the movement of data between systems. NiFi supports big data technologies such as Hadoop, Spark, and Kafka and provides real-time data processing and analytics.
  10. QlikView is a business intelligence and data visualization tool that enables users to analyze and share data using interactive dashboards, reports, and charts. QlikView supports big data platforms such as Hadoop, and provides real-time data processing and analytics.

Big Data Best Practices

To effectively manage and utilize big data, organizations should follow some best practices:

  • Define clear business objectives: Organizations should define clear business objectives while collecting and analyzing big data. This can help avoid wasting time and resources on irrelevant data.
  • Collect and store relevant data only: It is important to collect and store only the relevant data that is required for analysis. This can help reduce data storage costs and improve data processing efficiency.
  • Ensure data quality: It is critical to ensure data quality by removing errors, inconsistencies, and duplicates from the data before storage and processing.
  • Use appropriate tools and technologies: Organizations must use appropriate tools and technologies for collecting, storing, processing, and analyzing big data. This includes specialized software, hardware, and cloud-based technologies.
  • Establish data security and privacy policies: Big data often contains sensitive information, and therefore organizations must establish rigorous data security and privacy policies to protect this data from unauthorized access or misuse.
  • Leverage machine learning and artificial intelligence: Machine learning and artificial intelligence can be used to identify patterns and predict future trends in big data. Organizations must leverage these technologies to gain actionable insights from their data.
  • Focus on data visualization: Data visualization can simplify complex data into intuitive visual formats such as graphs or charts, making it easier for decision-makers to understand and act upon the insights derived from big data.


1. Data Growth

Managing datasets having terabytes of information can be a big challenge for companies. As datasets grow in size, storing them not only becomes a challenge but also becomes an expensive affair for companies.

To overcome this, companies are now starting to pay attention to data compression and de-duplication. Data compression reduces the number of bits that the data needs, resulting in a reduction in space being consumed. Data de-duplication is the process of making sure duplicate and unwanted data does not reside in our database.

2. Data Security

Data security is often prioritized quite low in the Big Data workflow, which can backfire at times. With such a large amount of data being collected, security challenges are bound to come up sooner or later.

Mining of sensitive information, fake data generation, and lack of cryptographic protection (encryption) are some of the challenges businesses face when trying to adopt Big Data techniques.

Companies need to understand the importance of data security, and need to prioritize it. To help them, there are professional Big Data consultants nowadays, that help businesses move from traditional data storage and analysis methods to Big Data.

3. Data Integration

Data is coming in from a lot of different sources (social media applications, emails, customer verification documents, survey forms, etc.). It often becomes a very big operational challenge for companies to combine and reconcile all of this data.

There are several Big Data solution vendors that offer ETL (Extract, Transform, Load) and data integration solutions to companies that are trying to overcome data integration problems. There are also several APIs that have already been built to tackle issues related to data integration.

Advantages and Disadvantages of Big Data

Advantages of Big Data

  • Improved decision-making: Big data can provide insights and patterns that help organizations make more informed decisions.
  • Increased efficiency: Big data analytics can help organizations identify inefficiencies in their operations and improve processes to reduce costs.
  • Better customer targeting: By analyzing customer data, businesses can develop targeted marketing campaigns that are relevant to individual customers, resulting in better customer engagement and loyalty.
  • New revenue streams: Big data can uncover new business opportunities, enabling organizations to create new products and services that meet market demand.
  • Competitive advantage: Organizations that can effectively leverage big data have a competitive advantage over those that cannot, as they can make faster, more informed decisions based on data-driven insights.

Disadvantages of Big Data

  • Privacy concerns: Collecting and storing large amounts of data can raise privacy concerns, particularly if the data includes sensitive personal information.
  • Risk of data breaches: Big data increases the risk of data breaches, leading to loss of confidential data and negative publicity for the organization.
  • Technical challenges: Managing and processing large volumes of data requires specialized technologies and skilled personnel, which can be expensive and time-consuming.
  • Difficulty in integrating data sources: Integrating data from multiple sources can be challenging, particularly if the data is unstructured or stored in different formats.
  • Complexity of analysis: Analyzing large datasets can be complex and time-consuming, requiring specialized skills and expertise.

Implementation Across Industries 

Here are top 10 industries that use big data in their favor – 

IndustryUse of Big data
HealthcareAnalyze patient data to improve healthcare outcomes, identify trends and patterns, and develop personalized treatment
RetailTrack and analyze customer data to personalize marketing campaigns, improve inventory management and enhance CX
FinanceDetect fraud, assess risks and make informed investment decisions
ManufacturingOptimize supply chain processes, reduce costs and improve product quality through predictive maintenance
TransportationOptimize routes, improve fleet management and enhance safety by predicting accidents before they happen
EnergyMonitor and analyze energy usage patterns, optimize production, and reduce waste through predictive analytics
TelecommunicationsManage network traffic, improve service quality, and reduce downtime through predictive maintenance and outage prediction
Government and publicAddress issues such as preventing crime, improving traffic management, and predicting natural disasters
Advertising and marketingUnderstand consumer behavior, target specific audiences and measure the effectiveness of campaigns
EducationPersonalize learning experiences, monitor student progress and improve teaching methods through adaptive learning

The Future of Big Data

The volume of data being produced every day is continuously increasing, with increasing digitization. More and more businesses are starting to shift from traditional data storage and analysis methods to cloud solutions. Companies are starting to realize the importance of data. All of these imply one thing, the future of Big Data looks promising! It will change the way businesses operate, and decisions are made.


In this article, we discussed what we mean by Big Data, structured and unstructured data, some real-world applications of Big Data, and how we can store and process Big Data using cloud platforms and Hadoop. If you are interested in learning more about big data uses, sign-up for our Blackbelt Plus program. Get your personalized career roadmap, master all the skills you lack with the help of a mentor and solve complex projects with expert guidance. Enroll Today!

Frequently Asked Questions

Q1. What is big data in simple words?

A. Big data refers to the large volume of structured and unstructured data that is generated by individuals, organizations, and machines.

Q2. What is big data in example?

A. An example of big data would be analyzing the vast amounts of data collected from social media platforms like Facebook or Twitter to identify customer sentiment towards a particular product or service.

Q3. What are the 3 types of big data?

A. The three types of big data are structured data, unstructured data, and semi-structured data.

Q4. What is big data used for?

A. Big data is used for a variety of purposes such as improving business operations, understanding customer behavior, predicting future trends, and developing new products or services, among others.

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Vishesh Arora 26 May 2023

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