Most business people have heard the term “Big Data,” but they do not know why it’s such a big deal. It is a big deal, one of those disruptive innovations that I often talk about that is changing our lives dramatically.

Before Big Data  – we are talking fewer than five years ago – most data was “structured data,” stored in relational databases like SQL and IBM’s DB2. (SQL, or Structured Query Language, is a special-purpose programming language for managing data in relational database management systems. DB2 is a family of relational database management system products that serves a number of operating system platforms.) Relational data enabled us to do correlations like, “Eighty-five percent of healthcare decisions for the family are made by women.”

Fast forward five years: With Big Data, data can be “unstructured,” which means data can be commingled from many sources like text, social media, video, photos, and numbers. As a result, we can use a new form of mathematics that takes massive amounts of unstructured data and makes predictions based on probability math theory. This is exactly what the Obama campaign did to outsmart the Romney campaign and deliver individual customized, personalized messages to more than 100 million voters.

This “new math,” called predictive analytics, is not really so new: I was doing it as an intern in graduate school 45 years ago. It’s just that cloud computing makes it more practical; it requires massive data and massive computer power.  Today it is affecting and changing commerce (Amazon), advertising (Google and Facebook), content (iTunes), weather systems, global warming, seismology, and medicine.  Just for starters!

Note: For math geeks, we are talking about Bayseian statistics, Markov chains, and Monte Carlo game theory.

It is also thanks to Big Data that “wearables” will be a big deal. When I joined the personal computer industry 30 years ago, it was in the early days of the microprocessor. Now we are in the early days of sensors. John Chambers at Cisco has created the vision of “The Internet of Everything,” predicting that there will be 50 billion wireless connected devices in the world by 2020 . . . mostly sensors, mostly M2M (machine-to-machine) communications. (I am on the Cisco Advisory Board for The Internet of Everything.)

Another thing to watch is Bluetooth 4.0, referring to the easy movement of data from wireless sensors (like fitness trackers) via a fast wireless radio that uses very little energy. In comparison, Wi-Fi is a power hog, which is why so many companies – like Samsung, Apple, Google, and Microsoft – are expected to introduce wearables.

There are many more big deals to come, of course. Next blog, I‘ll explain why Google is way ahead. Stay tuned!