Big Data Attracts Big Dollars, New Faces

The opportunity in helping wireless operators parse through hoards of big-data (and make money on it) is attracting a rash of startups, each armed with fresh funding and claiming a unique value proposition.

The latest is Cinarra Systems, which announced a $4.5 million series A round of funding Thursday. The one-year-old company is not offering many details on its product plans, but it says its goal is to act as a mediator between operators and over-the-top (OTT) apps, bringing network intelligence to OTTs to improve their services.

Alex Zinin, CEO and co-founder of Cinarra, told us the Menlo Park, Calif., company is testing its technology with some Tier 1 operators. Cinarra's technology is two-fold: software that integrates within the operator network and a mediation platform that Cinarra hosts to aggregate the data from various operators, analyze it using a proprietary algorithm, and monetize it for application providers.

Zettics Corp., another startup you might not have heard of, is already serving the big-data needs of all four Tier 1 wireless operators in the US. It was formed in 2011 by the merger of GroundTruth and Umber Systems and has since raised $34 million in funding.

Unlike other new faces like Guavus Inc. , Zettics analyzes all the data that comes through operator networks. And it licenses software equipped with a patented dynamic learning engine to weed out the most important data to the mobile operators that they can monitor on their own. (See: That Big Data Sinking Feeling.)

Rather than alert an operator if a certain cell tower is running hot, Joe Levy, Zettics' vice president of strategic consulting, told us the software would describe what an individual subscriber is doing to overload it. If a customer calls in to complain that the person's data usage was reported incorrectly, Zettics platforms can quickly determine if that's true and why. Levy says there are 60 use cases for which that it can test.

Zettics is powering Verizon Wireless 's Precision Market Insights and Sprint Corp. (NYSE: S)'s Pinsight Media+ programs, both of which sell aggregated customer information to marketers looking to target their ads. Programs like this have come under fire for walking the fine line of privacy, but Levy says Zettics strictly filters information based on the operators' privacy guidelines through its Privacy Dial and whether they want it to be opt-in, like Verizon, or opt-out, like AT&T Inc. (NYSE: T). (See: JDSU Urges Ops to Sell Their Location Data and AT&T Eyes Big Data Revenues.)

Zettics is selling primarily to the operators' marketing division, rather than the network team, and Levy acknowledges that the two often don't work well together. But even though the operators can use the data as they wish -- to improve the customer experience or reduce churn -- the key aim today is clearly monetizing the data that operators have on hand. (See: Big Data: Telcos Can Capitalize on Home Turf.)

"Carriers are large, complex organizations that have a hard time sharing stuff," Levy said. "Our platform enables the data fundamentally coming off the network to be really well used by other groups. Our aim is not to break down silos, but helps marketing to use the data that network has."

The hunt for the killer algorithm
While Zinin claims Cinnara has no competition, Levy said Zettics' biggest competition is from custom projects and internal IT or systems integrators taking on big-data themselves. But Zettics can get up and running in one to three months. "With telco big projects, it's impossible to do that."

Heavy Reading analyst Caroline Chappell told us that the concept of operators using big-data to create products and services in a Google (Nasdaq: GOOG)-esque model is still fairly new, even though some claim to have been doing it for years. MCI might have been the first with its Friends and Family calling circles in the 1990s. This time around, however, the technologies and speeds are different. So are some of the players.

She points out that Telefónica SA (NYSE: TEF) is another operator that set up its Dynamic Insights unit last year to create value out of customer big-data.

As a result, the big-data and analytics space has seen a lot of consolidation of late -- a trend that will likely continue. Most recently, IBM Corp. (NYSE: IBM) acquired the analytics expert The Now Factory, and Amdocs Ltd. (NYSE: DOX) strengthened its analytics play with Actix. Guavus is also a rumored acquisition target of Ericsson AB (Nasdaq: ERIC). Understandably, neither Cinarra nor Zettics would commit to having an IPO or purchase in their plans, though both seemed open to the idea as they make a name for themselves in an undeniably hot space. (See: Guavus Gets a New Top Dog, IBM Acquires Analytics Expert, and Amdocs Dives Into Mobile SPIT Pool.)

"I want to build a billion dollar company," Zinin said. "Along that path, if we have IPO as an option, we'll consider that. If there's a reasonable acquisition option we think we can continue building that business, we'll consider it as well."

— Sarah Reedy, Senior Editor, Light Reading