With more Internet-connected devices, machines, and applications talking to one another than ever before, corporations are amassing unprecedented mountains of information. (Case in point: A full 90% of all the data in the world has been created over the past two years.) The need to store, sift, and make sense of all those petabytes has led to massive investments in data centers across the globe. According to the research firm IDC, there are 2.9 million so-called server farms in the U.S. alone, stretching from Oregon to Iowa, where Google (GOOG), Microsoft (MSFT), and Facebook (FB) have spent billions of dollars building out their own facilities. And that’s just the beginning.
The current aggregate U.S. “floor space” of data centers is about 666 million square feet. By 2016 that number is expected to rise to 727 million square feet. Elsewhere in the world, data centers are popping up in Hong Kong, Brazil, Dubai, and other hubs that are both business-friendly and close to dense populations. Cloud-computing traffic, the fastest-growing area of data center activity, is expected to more than quadruple from 2012 to 2017, at which point it will represent nearly two-thirds of total workloads. Another big driver is the Internet of Things, the term used for wireless communication between appliances, vehicles, and other interconnected machines and objects. According to the research firm Gartner, there will be 26 billion connected devices that aren’t PCs or phones in the world by 2020, up from less than 1 billion in 2009. All of them will be creating and transmitting data.
What does it all mean for businesses? For starters, it necessitates a smart, cost-effective, and forward-thinking strategy for handling this massive and growing amount of information. It also means employing tools like Hadoop, an open-source software framework used to process large-scale data sets. And, of course, it means hiring people with the right skills to make sense of it all.
Data — even big data — is only as useful as what you can do with it. There have been some signs of early success. Today Wal-Mart (WMT) and other large retailers are able to track which products you browse online, allowing them to suggest relevant in-store discounts. Utility companies are using connected devices to better monitor pipe leakage and brownouts. And agribusiness giants such as Monsanto (MON) are deploying predictive analytics tools to better gauge weather and crop conditions.
Despite the hype, it’s still early days for big data. Last year only an estimated 22% of digital information was a candidate for analysis, and just 5% was actually analyzed, according to IDC. A lot of data still sits in fragmented systems that don’t “talk” to one another, which renders the information almost useless. But as enterprises take advantage of new, more efficient data center technologies and analytics tools, the future for big data could be bright. And much, much bigger.
This story is from the June 16, 2014 issue of Fortune.