The business of data is growing bigger and bigger. An astounding 2.5 quintillion bytes of data are created every day, cluttering computer systems around the globe.

As more and more companies clamor to find space for the new, archive the old, and analyze it all so it makes sense, a booming $34 billion industry has emerged. While much of the growth in data — as much as 80% to 90% — has come over the past two years, we had better brace for more explosions.

Consider the data created by the 2.4 billion Internet users alone who download 46 million applications. Consider that over the past 50 years, The New York Times published a total of 3 billion words — but Twitter users tweet 8 billion words every single day. Consider that Facebook (Nasdaq: FB) has 1 billion users, 1.13 trillion “likes” and 219 billion shared photos.

Of course, behemoth Internet companies that live and die by data simply build their own multi-billion-dollar facilities to store their bytes. Facebook, estimated to own 1 million servers, just built its fourth and newest facility just south of the Arctic Circle. 

That’s not so easy for IT departments constantly hearing from CEOs to consolidate and spend less money, while at the same time storing, processing and analyzing unprecedented amounts of data.

In the IT industry, IBM (NYSE: IBM) expects its revenue from analytics and associated Big Data technologies to reach $20 billion by 2015. Overall market revenues are projected to be $47.5 billion by 2017.
Many corporations turn to providers of data center space that offer everything from IT infrastructure to cloud storage to disaster recovery.

A great investment in this space is Digital Realty Trust (NYSE: DLR), a real estate investment trust and the world’s largest provider of data center space. It has 127 properties comprising nearly 23.7 million square feet in 32 markets throughout North America, Europe, Asia and Australia.

Across the U.S. government, data storage needs are expected to increase to an average of 2.63 petabytes (nearly 2,700 terabytes) per agency in 2014 , an increase of 63%. In fact, IBM and Amazon.com (Nasdaq: AMZN) are vying for a $600 million contract with the CIA to provide a private cloud, meaning its systems would reside in the agency’s secure data center. It would be the first of its kind for Amazon.

The U.S. government is one of the nation’s largest advocates of Big Data technology. Recently called a technology “essential to modern warfare” by the Defense Information Systems Agency, the federal government is expected to spend nearly $5 billion on Big Data initiatives by year’s end.

Video surveillance, compliance records, footage from military unmanned vehicles, security events and medical scans are just a few of the data types that agencies collect, store and share to accomplish their goals. In fact, to line up contracts for billions of taxpayer dollars in coming years, the Department of Homeland Security has asked the industry’s top Big Data vendors to “show us what you have.” #-ad_banner-#

No doubt, EMC Corp. (NYSE: EMC) will be right in the thick of that competition. In late 2012, EMC formed a separate organization called Pivotal Initiative led by Paul Maritz, a former CEO at VMware (NYSE: VMW). Combining VMware’s data center software and EMC’s Big Data technology, Pivotal Initiative is expected to bring in revenue of about $300 million in 2013, a figure that is expected to rise to more than $1 billion by 2017.

General Electric (NYSE: GE) has invested $105 million in a 10% stake in Pivotal Initiative.  Best of all, EMC’s products are compatible with many different platforms, including offerings from IBM and Oracle (NYSE: ORCL).

Interestingly, an unlikely giant has unexpectedly jumped into the arena. Agribusiness’ Monsanto (NYSE: MON) is buying San Francisco-based Climate Corp. for $930 million. Climate Corp. makes a software platform that crunches weather-related data to help farmers grow crops more effectively. According to Monsanto, data science could be a $20 billion market “beyond our core focus today.”

Risks to Consider: If the government shutdown drags on, Big Data companies with federal contracts may stand to lose business.
 
Action to Take –> Digital Realty, IBM, Oracle and EMC are all ways to directly invest in the growing data trend. You might consider dividing a portion of your portfolio among all four. IBM’s space in Big Data accounts for just 1% of its total revenue, however, and I’d wait to invest in Monsanto purely for its move into Big Data.

P.S. Technological movements like Big Data could drive some of next year’s biggest investment opportunities. In our latest report, “The Hottest Investment Opportunities of 2014,” you’ll learn about technologies that are revolutionizing operating rooms and consumer electronics around the world — and how to invest in them. To learn more, click here.