The growth of processing power has given us the ability to tackle the enormous amounts of data companies acquire, then slice it, dice it, and model decisions from it, like never before. Here are some companies positioned to profit mightily from it, observes Chloe Lutts of Dick Davis Dividend Digest.

What exactly is “Big Data?” Simply, Big Data is a concept and a buzzword coined to describe the increasingly enormous data sets being analyzed by businesses, governments, and organizations today. Today’s Big Data sets are so large that they’ve been given a new name to set them apart from the data that’s been available in the past.

From a technical standpoint, the defining characteristic of Big Data is that it requires new and purpose-built tools to capture, store, search, share, analyze, and visualize that data. For example, commonly-used database management tools like Microsoft Excel can be used to easily store and use hundreds and even thousands of data points, but are too slow to store and manage Big Data sets containing multiple terabytes or petabytes of information.

An example from the sciences helps show just how much bigger Big Data is. The Sloan Digital Sky Survey is an astronomical survey begun by a New Mexico observatory in 2000. Collecting about 200 GB of data on the cosmos per night, the Sloan survey collected more data in its first few weeks of operation than had previously been collected in the entire history of astronomy.

Businesses are collecting and using big data too. Wal-Mart (WMT) saves data on all of its customer transactions—over 1 million per hour—in databases now estimated to contain more than 2.5 petabytes of data. That’s the equivalent of 167 times all the information contained in the entire Library of Congress.

What use is that much data? It depends on how good your tools are. No one person can look at 2.5 petabytes of data and discern any sort of pattern from it. So software for organizing and analyzing Big Data has become a big business. Organizations with the right tools can use them to make big money...or win big elections.

Right after the presidential election, the Obama campaign shared some of its data strategy with Time. In this article, the campaign explained how having the right tools to analyze the data was key.

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The campaign took the various databases it had been using for the 2008 election—with data from field workers, fundraisers, consumer databases, and social-media—and combined them into one unified dataset. Once the data was all in one place, the campaign could connect different types of information—linking registered voters to their Facebook pages, for instance—and run simulations of potential outcomes.

One senior campaign advisor told Time, “We could [predict] people who were going to give online. We could model people who were going to give through mail. We could model volunteers...In the end, modeling became something way bigger for us in 2012 than in 2008, because it made our time more efficient.”

So how can you invest in all this Big Data that’s helping Obama win elections and Wal-Mart make money?

There are actually a lot of options. One is to buy one of the companies that have Big Data, like Wal-Mart, or even better, a specialized data collector like Equifax (EFX) or Acxiom (ACXM). Both collect consumer and commercial data, on- and offline, and sell or license it to users like the Obama campaign and retailers. Equifax also offers its own products, like credit scores and fraud detection.

You could also buy one of the companies storing all these massive data sets, like EMC (EMC) or Teradata (TDC). Both have thousands of servers storing client data, and also offer customers data-analysis solutions.

But as I said earlier, the single most important determinant of Big Data’s usefulness is the tools you have to use it. Generally, that means software.

Ian Wyatt’s Top Stock Insights observes: “One of the biggest trends over the next few years will be the collecting and utilizing of Big Data sets. TIBCO Software (TIBX) does this better than anyone else in the business.

"Major TIBCO clients include Yahoo (YHOO), Nasdaq (NDAQ) and Oracle (ORCL)—even the statistics wonks at Major League Baseball use TIBCO to help organize their database. With the timely intelligence TIBCO brings, companies can maximize revenue, drive innovation, and increase efficiency, thereby bringing costs down.

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