Management Lab Tackles the Elusive Problem of Big Data
When executives at one of the world's largest technology companies needed insight into one of the hottest trends in computing, they turned to Booth students for answers.
Microsoft Corp. sponsored Booth's fall Management Laboratory, a 10-week course in which students tackle a consulting project for a real-world client and present their recommendations at the end of the term.
"The students get hands-on managerial experience, assem- bling a set of highly talented people to address a creative problem that can't be solved by a single individual," said Jonathan Frenzen, AB '78, MBA '82, PhD '88, adjunct professor of marketing and director of the Management Laboratory for the past 20 years.
The lab was founded 35 years ago by Harry L. Davis, Roger L. and Rachel M. Goetz Distinguished Service Professor of Creative Management, a pioneer in experience-based education and Frenzen's dissertation adviser. (For more on Davis and his 50-year career at Booth, see "Asking the Essential Questions.") Students have worked with blue-chip clients such as Abbott Laboratories, Citibank NA, General Electric Co., and Honeywell International Inc.
For the fall 2012 project, Microsoft wanted to know how customers in a range of industries are thinking about big data. The term has become a tech buzzword, but there's surprisingly little consensus about what it means.
The task for the nine students in the course was to cut through the hype. They looked at how businesses deal with three data variables: volume, velocity, and variety. Volume simply means having a lot of data, while velocity indicates how quickly the data are gathered and analyzed. (For another perspective on the challenge of big data, see "Marketers Seek Insights from Huge Datasets.")
Variety is the most complex variable. As more diverse types and sources of data are gathered, they grow increasingly difficult to analyze. Many companies, for example, would like to mine social media for consumer sentiment about their products or services. But "unstructured" textual data such as tweets and Facebook posts can't as easily be combined with other "structured" data obtained through traditional survey research.
The students initially interviewed 40 IT and marketing executives. Then they conducted follow-up interviews with 60 additional technology decision makers in four industries: retail, manufacturing, health care, and media/ communications.
"In most of the interviews we conducted, we found that actual big data problems - as you would find in tech magazines - aren't all that prevalent just yet," said Janet Jozwik, '13, a participant in the Management Lab when she was a Full-Time student. "Most companies are struggling with harnessing large and fast-moving volumes of structured data."
For example, she said, health-care companies envision using software to search X-ray images (unstructured data) for abnormalities and then matching findings against patient health records (structured data), but progress has been slow. Other companies tackle simpler types of structured data, such as drug-trial results, which can be handled with more traditional database tools.
"They came up with some pretty interesting insights - for example, the notion that people mostly have small data problems that they express like big data problems," said Satya Nadella, '97, leader of Microsoft's cloud and enterprise engineering group and the driving force behind the firm's relationship with the Management Lab. (See "On the Cutting Edge of Computing.")
In addition, the students explained how customers are navigating gaps in Microsoft and competitor products, pointing out growth opportunities for Microsoft to refine its products to better meet customer needs, Nadella said.
The tight timeline created an intense schedule. Meeting in a Harper Center conference room, the students held all-morning work sessions twice a week and weekly conference calls among themselves and with Microsoft executives. They also gave two presentations at Microsoft headquarters in Redmond, Washington.
"I was floored by the amount of primary research they were able to do, the depth of their results, and their ability to distill unique findings applicable to us," said Udai Kumar, '06, Microsoft's head of strategic planning for the server and tools division and a 2004 Management Lab participant. He encouraged Nadella to try an initial project with Booth as a first step in a possible partnership but also, to gain an outside perspective on a strategic issue facing the company.
Microsoft executives left the research question open-ended to avoid imposing their own views. "When you're so close to the problem, you assume that customers essentially understand the problem exactly the same way you do," said John "JG" Chirapurath, '01, Microsoft's senior director of product planning for the data platform. "One of the things the students found out is, that's not the case. It's a lesson to us to make sure we communicate our story in a way that makes sense to the customer."
Farhan Ahmed, '13, a participant in the Management Lab when he was a Full-Time student, said the group benefited from having to find its own way. "In the midst of it, we were looking for more direction, but looking back, I think part of the learning experience was to figure out how to do it ourselves," he said.
Based on the success of the fall course, Microsoft plans to sponsor another Management Lab this upcoming academic year.
For Satya Nadella, '97, executive vice president of Microsoft's cloud and enterprise engineering group, the diverse team of students in the Management Lab provided a fresh perspective on opportunities to help his customers store and analyze more data than ever before.
"A lot of new technology is about being able to create value in business, so you need to have people who come with both business and technology backgrounds," he said.
Nadella works on the cutting edge of computing, overseeing Microsoft's "Cloud OS" platform. Cloud OS works like a traditional operating system, running applications and hardware, but it uses a network of remote servers on the internet to store and process data, instead of a local server. Previously the president of Microsoft's server and tools division, Nadella was promoted, as part of Microsoft's July reorganization, to running one of the company's four major engineering divisions. He now leads the development of all computing platforms, developer tools, and cloud services, key growth areas for the company.
Since joining Microsoft in 1992, Nadella has held a range of roles, including working in engineering for the server group and leading Microsoft Business Solutions. Before that, he was senior vice president of R&D for Microsoft's online services division.
"One of the nice things about Microsoft is that I don't have to leave the company to get different experiences," he said.
Microsoft has forged a close relationship with the school. In addition to recruiting students and sponsoring the fall Management Lab, Microsoft also is a sponsor of the Edward L. Kaplan, '71, New Venture Challenge.
Nadella, who attended the Weekend MBA Program, said Booth showed him that all strategy questions can be approached through microeconomic analysis. "You can take the most complex business problems, with all kinds of uncertainty, and distill the data that could lead you to make better decisions," he said. "That holds true even today."