Cloud Mining is a new approach to apply Data Mining to customer data. This article introduces Cloud Mining in a quick overview.
Data Mining is a determined technique to analyse Data in CRM, Marketing and Distribution. For example it helps optimizing customer interaction, shows buying potentials of customers and the churn probability by the use of statistical-mathematical methods on big amounts of data. Thereby companies can make marketing efforts more precise – they spendings less and achieve better effects.
Data Mining is practically only used by big companies
Data Mining can be useful at less as 10.000 customers. But since the relative cost per customer to apply it virtually decreases by the number of customers, mostly big companies with millions of customers using Data Mining right now. The high costs of personal, hardware and software licensing just don’t make it cost-effective. Main source of the costs are the Data Mining experts, that are needed to prepare the data and understand the domain knowledge of the company. They have to be hired or provided by external service-providers (consulting companies). Yearly license-fees that actually equal the costs for a Data Mining expert have to be paid as well. The hardware has to be efficient and causes remarkable costs. That is why Data Mining usually can’t be afforded by small companies.
Reduce Data Mining costs by SaaS – Cloud Mining is born
The SaaS Distribution model (Software-as-a-Service) helps to reduce costs by providing flexible license options and outsourcing the hardware effort. At SaaS, the software is not applied in the company, it lies at a software service providers server. That means the provider deals with the hardware, looks after software updates and maintains technically everything. In Cloud Mining, the servers that provide the software are the Cloud. This can be the public cloud from Google, Amazon.com etc, or a private cloud on the servers of a single provider. That has two main effects; on one hand the customer only pays for the tools of Data Mining he needs. That makes him save a lot compared to complex Data Mining suites that he is not using exhaustive. And on the other hand he just pays for the costs that are generated by using the Cloud. He does not have to maintain a hardware infrastructure, he can apply data mining just via his browser. This reduces the barriers that keep small companies from benefiting of Data Mining.
Later I will come to pros and cons of Cloud Mining, and present some companies that already providing this service.