“The next holy grail is about decision support and analytics.”

—GE CEO Jeffrey Immelt

The world creates 2.5 quintillion bytes of data every day, according to International Business Machines (NYSE: IBM). To put that in perspective, 90% of the data that exists today—everything from blog posts to readings from electronic sensors on bridges, trucks and oil rigs—was created in the last two years alone. Or put another way, if every byte of data in the world was a liter of water, we’d have enough to fill the oceans—two times over.

The sharply higher amount of data is a result of a fall in the price of storage. For example, at your nearest electronics store, you can now buy an external hard drive that will hold a terabyte of data for less than $100, which was unthinkable just a few years ago.

This massive stockpile of information opens countless doors to improving efficiency and decision-making. For example, Norfolk Southern Corp. (NYSE: NSC) is now using software that makes its trains more fuel efficient by accounting for things like the surrounding landscape, the number of cars the train is pulling and a raft of other data. “It coaches the locomotive engineer to keep the train on schedule but to do it in a way that optimizes fuel burn, and we are seeing tremendous results here,” company vice-president and CIO Deborah Butler told the Wall Street Journal.

Thanks to improvements like these, Norfolk Southern was able to chop its fuel costs by 6.3% in 2011, according to the Journal.

For other businesses, uses for data analytics could range from creating coupons that are targeted at specific customers based on their individual purchasing patterns, thereby ensuring higher response rates. Many companies are also tracking and instantaneously sifting through tweets, status updates and other feedback on social media to develop new products to take advantage of rising trends.

In addition to making better decisions, analytics software can also greatly enhance the speed of decision-making, making big companies far more nimble. This technology can also be used to detect fraudulent transactions in the blink of an eye by looking for specific patterns in huge volumes of payments.

The overall big data market is set to grow quickly in the coming years. According to IT research firm IDC, big data revenue will increase by 31.7% a year between 2012 and 2016, when it will hit $23.8 billion.

3 Big Data Stocks to Watch

One factor driving demand for applications in this area is the fact that about 80% of the world’s data is unstructured, making it much more difficult to analyze than information stored in databases or other, better organized formats.

That’s where data analytics software comes in. Below, we begin our look at three companies that specialize in making products that help their clients navigate—and profit from—the huge volumes of data they’re collecting, with IBM. Tomorrow, we’ll examine two more.

Big Data Stock #1: IBM: Big Blue’s efforts in this area include its big data platform, which consists of applications that let users store and analyze large amounts of data. The company’s applications also include stream computing capability, which lets users analyze data as it comes in and take action on the spot.

Since 2005, IBM has made 35 acquisitions, worth a total of $16 billion, in the analytics space, according to tech website GigaOM. In February, it bought privately held Star Analytics for an undisclosed sum. According to an IBM press release, Star’s software helps companies share and manage data across their businesses, whether on site or through cloud computing (or accessing programs and data stored on remote servers). Star’s products also eliminate time-consuming manual processes.

In 2012, IBM’s business analytics revenue rose 13% from 2011; revenue from cloud computing gained 80%. In its latest quarter, the company’s overall revenue was down 0.6%, to $29.3 billion, while earnings before one-time items rose to $5.39 a share from $4.71 a year ago. That beat the consensus forecast of $5.25 a share in earnings on $29.09 billion in revenue.

IBM shares are up 2.4% in the past year and currently trade at 14.88 times the company’s last 12 months of earnings. Quarterly dividends of $0.85 yield 1.6% on a yearly basis.

Tomorrow, we’ll continue our look at ways to profit from the rise of big data analytics and examine two more stocks that are positioned to benefit.