How to Quantify the Value of Kafka in Your Organization
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(Lyndon Hedderly, Confluent) Kafka Summit SF 2018 We all know real-time data has a value. But how do you quantify that value in order to create a business case for becoming more data, or event driven? The first half of this talk will explore the value of data across a variety of organizations, starting with the five most valuable companies in the world: Apple, Alphabet (Google), Microsoft, Amazon and Facebook (based on stock prices July 2017). We will go on to discuss other digital natives: Uber, Ebay, Netflix and LinkedIn, before exploring more traditional companies across retail, finance and automotive. Next, we’ll look at non-businesses such as governments and lobbyists. Whether organizations are using data to create new business products and services, improve user experiences, increase productivity, manage risk or influencing global power, we’ll see that fast and interconnected data, or “event streaming” is increasingly important. After showing that data value can be quantified, the second half of this talk will explain the five steps to creating a business case. Most businesses focus on: -Making more money or conferring competitive advantage to make more money -Increasing efficiency to save money and/or -Mitigating risk to the business to protect money -We’ll walk through examples of real business cases, discuss how business cases have evolved over the years and show the power of a sound business case. If you’re interested in big money and big business, as well as big data, this talk is for you.
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How to Quantify the Value of Kafka in Your Organization
- 1. How to Quantify the Value of Kafka in Your Organization Lyndon Hedderly, Director of Customer Solutions
- 3. Investing $50kin 10 companies delivering Great User Experience The UX Fund:
- 4. $50k in 10 companies in 2006 became $306k in 2016. A 503% gain
- 5. Gain as a % >3,000% return! Almost 900% return! Approx. S&P Return over same 10 yr period 50%
- 6. Netflix Digital Native At Scale 50+ clusters 4000+ brokers 2+ trillion msgs/day
- 10. I think there’s a link between Kafka and Value - and I want to identify it
- 11. Data is the new oil Clive Humby (2006)
- 12. The Value of Data
- 13. Revenue Streams of the 5 big tech companies
- 14. $26bn (2016) 433 million LinkedIn members → $60 / member $18.4bn (2014) 440 million WhatsApp users → $42 / member $438bn (2018) 2.23 billion monthly active users → $200 / mau
- 15. What’s the value? 1. The iWatch? 2. With fitness information? 3. Medically accurate electrocardiogram?
- 16. How do we disentangle the business and Technology - to understand the value of the data? And then Kafka? Value of data is relative and situationally specific… it is complementary, interconnected, and interdependent with the business The answer? You Can’t Business Technology
- 17. ...Like oil, data is valuable, but if unrefined it cannot really be used. Data is the new oil
- 18. It’s not just the data that is important, it is how it is moved around - and how timely it is
- 19. Section 1 Recap 1. High Value organizations use Kafka - can we value kafka? 2. We can look at data - but business & technology (& data) are intrinsically linked - Value is situationally specific and relative 1. It’s not just the data that is important, it is how it is moved around - and how timely it is.
- 21. 1. Messaging, or ETL type tool 2. Big Data that’s fast, like fast Hadoop 3. Data integration. Something like an ESB Event Processing A Streaming Platform - a new category of infrastructure Assess it like an ‘experimental’ group in a controlled experiment - where the control = no Kafka.
- 22. IoT sensor ingestion Digital replatforming/ Mainframe Offload Customer 360 Faster transactional processing / analysis incl. Machine Learning / AI Microservices Architecture Online Fraud Detection Online Security (syslog, log aggregation, Splunk replacement) Middleware replacement Website / Core Operations (Central Nervous System) Example Use Cases Real-time app updates
- 23. Business Value Increase Revenue (make money) Decrease Costs (save money) Mitigate Risk (protect money) Key Business Drivers Digital Transformation $↑ $↓ $ Improve Customer Experience (CX) Core Business Platform Increase Operational Efficiency Migrate to Cloud Example Strategic Objectives Fraud Detection Regulatory IoT sensor ingestion Digital replatforming/ Mainframe Offload Customer 360 Faster transactional processing / analysis incl. Machine Learning / AI Microservices Architecture Online Fraud Detection Online Security (syslog, log aggregation, Splunk replacement) Middleware replacement Website / Core Operations (Central Nervous System) Real-time app updates Example Use Case Value?
- 24. Stream Data is The Faster the Better Big Data was The More the Better ValueofData Volume of Data ValueofData Age of Data Value of Data?
- 25. Business Value Increase Revenue (make money) Decrease Costs (save money) Mitigate Risk (protect money) Key Driver Digital Transformation $↑ $↓ $ Improve Customer Experience (CX) Core Business Platform Increase Operational Efficiency Migrate to Cloud Strategic Objective Fraud Detection Regulatory IoT sensor ingestion Digital replatforming/ Mainframe Offload Customer 360 Faster transactional processing / analysis incl. Machine Learning / AI Microservices Architecture Online Fraud Detection Online Security (syslog, log aggregation, Splunk replacement) Middleware replacement Website / Core Operations (Central Nervous System) Real-time app updates Example Use Case Value?
- 26. 1. Use Case: Customer 360
- 27. Use Case: Customer 360 A one-point improvement in CX Index score results in (By Industry):
- 29. Comparing the two Breakeven: end Yr 1 3 Year net difference: $13.5m or 24%
- 30. 30C K O 2 0 1 8 J U L Y 2. Use Case: Digital Replatforming incl. Middleware Replacement Mainframe APACHE KAFKA Off-load client e.g. Java Significant read-only transactions run through the Kafka Streaming Platform - reducing 30-40% of MIPS on mainframe
- 32. Comparing the two 5 Year net difference: $14m or 22%
- 33. 33C K O 2 0 1 8 J U L Y Use Case: Fraud Detection3. Use Case: Fraud Detection OK Sir... Here you go… ...but don’t you know you can do all this much more easily online.
- 35. Comparing the two 3 Year net difference: $18m or 50%
- 36. Business Value Increase Revenue (make money) Decrease Costs (save money) Mitigate Risk (protect money) Key Driver Digital Transformation $↑ $↓ $ Improve Customer Experience (CX) Core Business Platform Increase Operational Efficiency Migrate to Cloud Strategic Objective Fraud Detection Regulatory IoT sensor ingestion Digital replatforming/ Mainframe Offload Customer 360 Faster transactional processing / analysis incl. Machine Learning / AI Microservices Architecture Online Fraud Detection Online Security (syslog, log aggregation, Splunk replacement) Middleware replacement Website / Core Operations (Central Nervous System) Real-time app updates Example Use Case Summary ● 3 Yr: $13.5m or 24% ● 5 Yr: $14m or 22% ● 3 Yr: $18m or 50%
- 37. Recent TEI Report - Core Benefits of the Confluent Platform Value of Kafka? Cash Flow Chart (Risk-Adjusted) Study assumes a three-year contract with gold-level support and 100 nodes.
- 38. As-Is State & Negative Consequences (3-5 yr costs) Desired Solution 3-5 yr costs + Project Costs Top-line business Benefits & Bottom-line Savings (TCO comparison / ROI) Non-Financial Impact & Analysis: Incl. Scenarios, Sensitivities & Risks Metrics (definition of success) Case Studies 5. Proof-Points4. Soft Benefits3. $ Benefits2. Target State1. Baseline Confluents Value Assessment Process 5-step value assessment process
- 39. Section 2 Recap 1. Whilst difficult to value Kafka exactly, we can quantify the value of a business use-case - by approaching valuation like a ‘controlled experiment’ - modelling as-is vs. target (with Kafka) - and then ‘infer’ the value of Kafka... 2. We can also dig deeper - and quantify the operational efficiencies and agility, to derive value.
- 42. $5k in 10 companies = $50K ???
- 44. 44Confidential
- 45. Pre-Streaming Streaming Awareness and Pilot Early Production Streaming Mission Critical, Integrated Streaming Global Streaming Central Nervous System Understand the Customer journey