Living by the Numbers: Big Data Knows What Your Future Holds

One of the suppliers to the US Defense Department is Palantir, a company founded in 2004, partly with backing from Peter Thiel, a German-American investor. Another hot commodity among intelligence agents and military officials is the California software company Splunk, which is headquartered in a former sausage factory in San Francisco. A few weeks ago, technology journalists named Splunk one of the five most innovative companies in the world. Google only made it to 11th place in the ranking.

Governments, agencies and businesses in more than 90 countries use Splunk's applications. Its customers in the US include the Pentagon and the Department of Homeland Security. The nine-year-old company's software analyzes and interprets data supplied by all kinds of machines, including cell phone towers, air-conditioners, web servers and airplanes.

"The turbines of an Airbus A380 produce as much data during a single flight as a medium-sized computer center," says Guido Schröder, senior vice president of products at Splunk.

Schröder, who is originally from Paderborn in northwestern Germany and spent many years at SAP, now supervisors 160 developers and engineers, whose goal is to make the flood of data produced by machines usable. In the case of the A380, for example, Splunk's work can help airlines minimize kerosene consumption or optimize maintenance intervals.

"Security is one of the biggest growth areas for Big Data applications," says Schröder. In addition to crime and terrorism, Splunk focuses on the growing number of attacks in, and by means of, the Internet and its software can detect hacker attacks or other cyber attacks. "We are positioning ourselves for an expanding cyber war," Schröder says. But the data hunters' new war also has many civilian aspects. The Database The brick building in Hamburg's Winterhude neighborhood doesn't look like a bank branch, and yet loans are made there. A plastic banner identifies the company as "Kreditech," and the atmosphere inside the building is a mixture of garage startup and shared apartment. Signs are posted on the walls exhorting employees to "Take off your shoes."

Sebastian Diemer and Alexander Graubner-Müller bear no resemblance to typical German lenders, whose business model they consider to be outdated. "At least the classic branch bank model is on its way out," says the young and dynamic Diemer, dressed in the classic start-up look: jeans and a hoodie.

The self-confident founders of Kreditech lend money through the Internet: short-term mini-loans of up to €500, with the average customer receiving €109. Instead of requiring credit information from their customers, they determine the probability of default on their own, using a social scoring method that consists of high-speed data analysis. "Ideally, the money should be in customers' accounts within 15 minutes of approval. This is already working in Poland," says Diemer. In return, Kreditech wants as much data as possible from its users. The more information the company gets, the more precise are its predictions and the higher a customer's potential credit line.

The evaluation profiles of EBay accounts are already publicly accessible. Kreditech also requires access to Facebook profiles, so that it can verify whether a user's photo and location match information on other social networking sites, like Xing and LinkedIn -- and whether his or her friends include many with similar education levels or many colleagues working in the same company.

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