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Dejan Sarka

  • Conferences and Seminars 2015 Q3 and Q4

    I am finishing my list of conferences and seminars I am attending in the second half of the year 2015. Here is my list.

    1. Kulendayz 2015 – September 4th-5th. Although I will have huge problems to get there on time, I would never like to miss it. I have one talk there.
    2. SQL Saturday #413 Denmark – September 17th-19th. You can join me already on Friday for the Data Mining Algorithms seminar.
    3. SQL Saturday #434 Holland – September 25th-26th. If you miss the Denmark Data Mining Algorithms seminar, I am repeating it in Utrecht.
    4. SQL Server Days 2015 Belgium – September 28th-29th. This will be my first talk at SQL Server Days.
    5. SQL Saturday #454 Turin – October 10th. I was not confirmed as a speaker yet, but I still plan to go there, to combine the SQL part with the Expo in Milan part.
    6. PASS Summit 2015 Seattle – October 27th-30th. I still continue to be present at every single summit:-) This year I have one presentation.
    7. SharePoint Days 2015 Slovenia – November 17th-18th. No, I don’t like SPS. I will just have one small BI presentation there.
    8. SQL Saturday #475 Belgrade – November 28th. First SQL Saturday in Serbia. I simply must be there.
    9. SQL Saturday #460 Slovenia – December 11th-12th. I am co-organizing this event. Everybody is welcome, this will be fully English-speaking event. Don’t miss beautiful, relaxed and friendly Ljubljana!

    That’s it. For now:-)

  • Data Mining Algorithms – Pluralsight Course

    This is a bit different post in the series about the data mining and machine learning algorithms. This time I am honored and humbled to announce that my fourth Pluralsight course is alive. This is the Data Mining Algorithms in SSAS, Excel, and R course. besides explaining the algorithms, I also show demos in different products. This gives you even better understanding than just reading the blog posts.

    Of course, I will continue with describing the algorithms here as well.

  • PASS SQL Saturday #460 Slovenia 2015

    So we are back. PASS SQL Saturday is coming to Slovenia again on December 12th, 2015. Remember last two years? We had two great events. According to feedback, everybody was satisfied and happy. Let's make another outstanding event! How can you help?

    First of all, these events are free for attendees. Of course, this is possible only because sponsors pay the bills, and speakers come on their own expenses, using their own free time. For a start, please respect these facts.

    We always need more sponsors. Maybe your company is interested, maybe you know a company that would be interested for the sponsorship. Please spread the word about the event. This event is second to none in Slovenia. No other event in Slovenia attracts so many top speakers from all around the world as our SQL Saturday. Last year there were around two hundred attendees, with more than one third coming abroad. Therefore, as a sponsor, you can reach quite a broad audience, no matter that the event is in a small country.

    The second pillar of the event are the speakers. Please consider speaking at the event. We are not limited to top speakers only; one of the goals of the event is also to raise new speakers. We are successful with this task. Every year we get somebody new. Therefore, don't hesitate; if you would like to join the SQL Server speakers community, this is a good time and place!

    Organization of the event takes a lot of time as well. Maybe you can help here? When you register, you can also volunteer for a help. Or you can contact Matija Lah, Mladen Prajdić, or me directly.

    There is never enough advertisement. Again, please spread the word about the event. Maybe your coworkers and friends didn't hear about the event yet. Please tell them. If you attended SQL Saturday Slovenia before, please share your experience.

    Finally, please register and then attend the event. Last year we reached less than 5% drop-off rate, which is, as far as we know, a world record. Let's keep up the good work!

  • Data Mining Algorithms – Support Vector Machines

    Support vector machines are both, unsupervised and supervised learning models for classification and regression analysis (supervised) and for anomaly detection (unsupervised). Given a set of training examples, each marked as belonging to one of categories, an SVM training algorithm builds a model that assigns new examples into one category. An SVM model is a representation of the cases as points in space, mapped so that the examples of the separate categories are divided by a clear gap that is as wide as possible. New examples are then mapped into that same space and predicted to belong to a category based on which side of the gap they fall on.

    A support vector machine constructs a hyper-plane or set of hyper-planes in a high-dimensional space defined by the input variables, which can be used for classification, regression, or other tasks. A SVM is a discrete linear classifier. A good separation is achieved by the hyper-plane that has the largest distance to the nearest training data point of any class (so-called functional margin). The larger the margin the lower the generalization error. Let me show you this on a graphical example. Of course, I am showing a two-dimensional space defined by only two input variables, and therefore my separating hyper-plane is just a line.

    The first figure shows the two-dimensional space with cases and a possible single-dimensional hyper-plane (line). Of course, you can see that this line cannot be a separator at all, because there are some cases on the line, or said differently, on both sides of the line.

    image

    The next try is better. The line is separating the cases in the space. However, this is not the best possible separation. Some cases are pretty close to the line.

    image

    The third picture shows the best possible separation. The hyper-plane that separates the cases the best is found, and the model is trained.

    image

    Support Vector Machines are powerful for some specific classifications:

    • Text and hypertext categorization
    • Images classification
    • Classifications in medicine
    • Hand-written characters recognition

    One-class SVM can be used for anomaly detection, like detection of dirty data, or fraud detection. It uses a classification function without parameters, the one selected for the separation without regard to a target variable. Cases that are close to the separation hyper-plane are the suspicious cases. Therefore, the result is dichotomous: 1=regular case, 0=outlier.

  • Data Mining Algorithms – Principal Component Analysis

    Principal component analysis (PCA) is a technique used to emphasize the majority of the variation and bring out strong patterns in a dataset. It is often used to make data easy to explore and visualize. It is closely connected to eigenvectors and eigenvalues.

    A short definition of the algorithm: PCA uses an orthogonal transformation to convert a set of observations of possibly correlated variables into a set of values of linearly uncorrelated variables called principal components. The number of principal components is less than or equal to the number of original variables. This transformation is defined in such a way that the first principal component has the largest possible variance, and each succeeding component in turn has the highest variance possible under the constraint that it is orthogonal to (i.e., uncorrelated with) the preceding components. The principal components are orthogonal because they are the eigenvectors of the covariance matrix, which is symmetric.

    Initially, variables used in the analysis form a multidimensional space, or matrix, of dimensionality m, if you use m variables. The following picture shows a two-dimensional space. Values of the variables v1 and v2 define cases in this 2-D space. Variability of the cases is spread across both source variables approximately equally.

    image

    Finding principal components means finding new m axes, where m is exactly equal to the number of the source variables. However, these new axes are selected in such way that the most of the variability of the cases is spread over a single new variable, or over a principal component, like shown in the following picture.

    image

    We can deconstruct the data points matrix into eigenvectors and eigenvalues. Every eigenvector has a corresponding eigenvalue. A eigenvector is a direction of the line and a eigenvalue is a number, telling how much variance there is in the data in that direction, or how spread out the data is on the line. he eigenvector with the highest eigenvalue is therefore the principal component. Here is an example of calculation of eigenvectors and eigenvalues for a simple two-dimensional matrix.

    image

    The interpretation of the principal components is up to you and might be pretty complex. This fact might limit PCA usability for business-oriented problems. PCA is used more in machine learning and statistics than in data mining, which is more end user oriented, and the results thus should be easy understandable. You use the PCA to:

    • Explore the data to explain the variability;
    • Reduce the dimensionality – replace the m variables with n principal components, where n < m, in such a way that preserves the most of the variability;
    • Use the residual variability not explained by the PCs for anomaly detection.
  • Data Mining Algorithms – EM Clustering

    With the K-Means algorithm, each object is assigned to exactly one cluster. It is assigned to this cluster with a probability equal to 1.0. It is assigned to all other clusters with a probability equal to 0.0. This is hard clustering.

    Instead of distance, you can use a probabilistic measure to determine cluster membership. For example, you can cover the objects with bell curves for each dimension with a specific mean and standard deviation. A case is assigned to every cluster with a certain probability. Because clusters can overlap, this is called soft clustering. The Expectation-Maximization (EM) method changes the parameters of the bell curve to improve covering in each iteration.

    The Expectation - Maximization (EM) Clustering algorithm extends the K-Means paradigm in a different way. Instead of assigning each object to a dedicated cluster, it assigns each object to a cluster according to a weight representing the probability of the membership. In other words, there are no strict boundaries between clusters. Therefore, new means are computed based on weighted measures.

    The EM algorithm iterates between two steps. In the first step—the "expectation" step—the algorithm calculates the cluster membership of each case (i.e., the probability that a case belongs to a given cluster from the initially defined k number of clusters). In the second step—the "maximization" step—the algorithm uses these cluster memberships to re-estimate the models' parameters, such as the location and scale parameters of Gaussian distribution.

    The algorithm assumes that the data is drawn from a mixture of Gaussian distributions (bell curves). Take a look at the graphics. In the first row, the algorithm initializes the mixture distribution, which is the mixture of several bell curves here. In the second and third rows, the algorithm modifies the mixture distribution based on the data. The iteration stops when it meets the specified stopping criteria—for example, when it reaches a certain likelihood-of-improvement rate between iterations.

    Step 1: Initializing the mixture distribution

    image

    Step 2: Modifying the mixture distribution

    image

    Step 3: Final modification

    image

    You use the EM Clustering for the same purposes as the K-Means Clustering.

    In addition, you can search for outliers based on combinations of values of all input variables with the EM algorithm. You check the highest probability of cases over all clusters. The cases where the highest probability is still low do not fit well into any cluster. Said differently, they are not like other cases, and therefore you can assume that they are outliers. See the last figure in this blog post bellow.

    image

    The green case belongs to the cluster D with probability 0.95, to the cluster C with probability 0.002, to the cluster E with probability 0.0003, and so on.

    The red case belongs to the cluster C with probability 0.03, to the cluster B with probability 0.02, to the cluster D with probability 0.003, and so on. The highest probability for the red case is still a low value; therefore, this case does not fit well to any of the clusters and thus might represent an outlier.

    Outliers can also represent potentially fraudulent transactions. EM Clustering is therefore useful also for fraud detection. Finally, you can use EM Clustering for advanced data profiling to find the rows with suspicious combinations of column values.

  • Data Mining Algorithms – K-Means Clustering

    Hierarchical clustering could be very useful because it is easy to see the optimal number of clusters in a dendrogram and because the dendrogram visualizes the clusters and the process of building of that clusters. However, hierarchical methods don’t scale well. Just imagine how cluttered a dendrogram would be if 10,000 cases would be shown on it.

    K-Means is a distance-based partitioning algorithm that divides data set in predetermined (“k”) number of clusters around the average location (“mean”). In your mind, you intuitively know how to group people or any other cases. Groups do not need to have an equal number of members. You can do grouping according to one or more attributes.

    The algorithm comes from geometry. Imagine record space with attributes as dimensions. Each record (case) is uniquely located in space with values of the attributes (variables).

    The algorithm initially creates k fictitious members and defines them at the means of the clusters. These fictitious cases are also called centroids. The values of the input variables for these centroids could be selected randomly. Some algorithms use also a bit of heuristics and use the marginal distributions of the attributes as a starting point and randomly perturb from there.

    The algorithm then assigns each record to nearest centroid. This way, you get the initial clusters. When the clusters are defined, the algorithm can calculate the actual centroids of clusters and get new centroids. After the new centroids are calculated, the algorithm reassigns each record to the nearest centroid. Some records jump from cluster to cluster.

    Now the algorithm can calculate new centroids and then new clusters. The algorithm iterates last two steps until cluster boundaries stop changing. You can stop the iterations when there is less than the minimum number of cases defined as a parameter that can jump from cluster to cluster.

    Here is a graphical representation of the process. You can see the cases in a two-dimensional space. The dark brown cases are the fictitious centroids. The green case is the one that will jump between clusters.

    image

    After the centroids were selected, the algorithm assigns each case to the nearest centroid.

    image

    Now we have our three initial clusters. The algorithm can calculate the real centroids of those three clusters. This means that the centroids move.

    image 

    The algorithm has to recalculate the cluster membership. The green case jumps from the middle cluster to the bottom left cluster.

    image

    In the next iteration, no case jumps from a cluster to a cluster. Therefore, the algorithm can stop.

    K-means clustering scales much better than hierarchical methods. However, it has drawbacks as well. First of all, what is the optimal number of clusters? You can’t know in advance. Therefore, you need to create different models with different number of clusters and than select the one that fits your data the best.

    The next problem is the meaning of the clusters. There are no labels for the clusters that would be known in advance. Once the model is built, you need to check the distributions of the input variables in each cluster to understand what kind of cases constitute each cluster. Only after this step you can label the clusters.

  • Data Mining Algorithms – Hierarchical Clustering

    Clustering is the process of grouping the data into classes or clusters so that objects within a cluster have high similarity in comparison to one another, but are very dissimilar to objects in other clusters. Dissimilarities are assessed based on the attribute values describing the objects.

    There are a large number of clustering algorithms. The major methods can be classified into the following categories.

    • Partitioning methods. A partitioning method constructs K partitions of the data, which satisfy the following requirements: (1) each group must contain at least one object and (2) each object must belong to exactly one group. Given the initial K number of partitions to construct, the method creates initial partitions. It then uses an iterative relocation technique that attempts to improve the partitioning by moving objects from one group to another. There are various kinds of criteria for judging the quality of the partitions. Some most popular include the k-means algorithm, where each cluster is represented by the mean value of the objects in the cluster, and the k-medoids algorithm, where each cluster is represented by one of the objects located near the center of the cluster.
    • Hierarchical methods. A hierarchical method creates a hierarchical decomposition of the given set of data objects. These methods are agglomerative or divisive. The agglomerative (bottom-up) approach starts with each object forming a separate group. It successively merges the objects or groups close to one another, until all groups are merged into one. The divisive (top-down) approach starts with all the objects in the same cluster. In each successive iteration, a cluster is split up into smaller clusters, until eventually each object is in one cluster or until a termination condition holds.
    • Density-based methods. Methods based on the distance between objects can find only spherical-shaped clusters and encounter difficulty in discovering clusters of arbitrary shapes. So other methods have been developed based on the notion of density. The general idea is to continue growing the given cluster as long as the density (number of objects or data points) in the “neighborhood” exceeds some threshold; that is, for each data point within a given cluster, the neighborhood of a given radius has to contain at least a minimum number of points.
    • Model-based methods. Model-based methods hypothesize a model for each of the clusters and find the best fit of the data to the given model. A model-based technique might locate clusters by constructing a density function that reflects the spatial distribution of the data points. Unlike conventional clustering, which primarily identifies groups of like objects, this conceptual clustering goes one step further by also finding characteristic descriptions for each group, where each group represents a concept or a class.

    A hierarchical clustering model training typically starts by calculating a distance matrix – a matrix with distances between data points in a multidimensional hyperspace, where each input variable defines one dimension of that hyperspace. Distance measure can be a geometrical distance or some other, more complex measure. A dendrogram is a tree diagram frequently used to illustrate the arrangement of the clusters produced by hierarchical clustering. Dendrograms are also often used in computational biology to illustrate the clustering of genes or samples. The following set of pictures shows the process of building an agglomerative hierarchical clustering dendrogram.

    image imageimage imageimage

    image

    image imageimage imageimage

    Cluster analysis segments a heterogeneous population into a number of more homogenous subgroups or clusters. Typical usage scenarios include:

    • Discovering distinct groups of customers
    • Identifying groups of houses in a city
    • In biology, deriving animal and plant taxonomies
    • Can even make predictions once the clusters are built and distribution of a target variable in the clusters is calculated.
  • Data Mining Algorithms – Association Rules

    The Association Rules algorithm is specifically designed for use in market basket analyses. This knowledge can additionally help in identifying cross-selling opportunities and in arranging attractive packages of products. This is the most popular algorithm used in web sales. You can even include additional discrete input variables and predict purchases over classes of input variables.

    Association Rules Basics

    The algorithm considers each attribute/value pair (such as product/bicycle) as an item. An itemset is a combination of items in a single transaction. The algorithm scans through the dataset trying to find itemsets that tend to appear in many transactions. Then it expresses the combinations of the items as rules (such as “if customers purchase potato chips, they will purchase cola as well”).

    Often association models work against datasets containing nested tables, such as a customer list followed by a nested purchases table. If a nested table exists in the dataset, each nested key (such as a product in the purchases table) is considered an item.

    Understanding Measures

    Besides the itemsets and the rules, the algorithm also return some measures for the itemsets and the rules. Imagine the following transactions:

    1. Transaction 1: Frozen pizza, cola, milk
    2. Transaction 2: Milk, potato chips
    3. Transaction 3: Cola, frozen pizza
    4. Transaction 4: Milk, pretzels
    5. Transaction 5: Cola, pretzels

    The Association Rules measures include:

    • Support, or frequency, means the number of cases that contain the targeted item or combination of items. Therefore, support is a measure for the itemsets.
    • Probability, also known as confidence, is a measure for the rules. The probability of an association rule is the support for the combination divided by the support for the condition. For example, the rule "If a customer purchases cola, then they will purchase potato chips" has a probability of 33%. The support for the combination (potato chips + cola) is 20%, occurring in one of each five transactions. However, the support for the condition (cola) is 60%, occurring in three out of each five transactions. This gives a confidence of 0.2 / 0.6 = 0.33 or 33%.
    • Importance is a measure for both, itemsets and rules. When importance is calculated for an itemset, then when importance equals one, the items in the itemset are independent. If importance is greater than one, then the items are positively correlated. If importance is lower than one, then the items are negatively correlated. When importance is calculated for a rule “If {A} then {B}, then the value zero means there is no association between the items. Positive importance means that the probability for the item {B} goes up when the item {A} is in the basket, and negative importance of the rule means that the probability for the item {B} goes down when the tem {A} is in the basket.

    Common Business Use Cases

    You use the Association Rules algorithm for market basket analyses. You can identify cross-selling opportunities or arrange attractive packages. This is the most popular algorithm used in web sales.

    You can even include additional input variables and predict purchases over classes of input variables.

  • Conferences 2015 Q1 and Q2

    In two days, I am starting my first conference trip for this year. Therefore, it seems to me it is high time to write down my plan for the first semester of this year. Of course, I m adding my food plan for each event:-)

    1. SQL Saturday #374 Vienna. On Friday, February 27th, I am having a full-day seminar “Advanced Data Modeling Topics” in Vienna. On Saturday, I am also giving a presentation “Identity Mapping and De-Duplicating”. I am looking forward to the Käsekrainer. When I met it for the first time, I thought it was a bad joke. Our Kranjska sausage, or how Austrians say, the Krainer sausage, is probably the most controlled sausage, the sausage with the best ingredients possible. I was wondering what kind of barbarians would put cheese in it. In addition, Käsekrainer is much cheaper. It consists of pork, veal, cheese, and a fistful of unidentifiable ingredients. The Käsekrainer is probably the food that not acceptable for the highest number of religions and personal beliefs. However, over time, I started to love it:-) Käsekrainer mit semmel, senf und kren with my name on it is already waiting for me in Vienna!
    2. Of course, I don’t want to miss the SQLBits. On Saturday, March 7th, I am giving the presentation “Analysing text with SQL Server 2014”. British cuisine might not be the most famous in the world. Nevertheless, there is a dish I never had an opportunity to taste yet. This is one of three conferences in England I am doing this semester. At least once I want to get the spotted dick.
    3. In the week of March 23rd, I am returning to London for the DevWeek conference. I am having a seminar “BI with Microsoft Tools: from Enterprise to a Personal Level” and five presentations there (Data Extraction and Transformation with Power Query and M; Data Mining Algorithms Part 1; Data Mining Algorithms Part 2; Introducing R and Azure ML; Visualising Geographic and Temporal Data with Power Map). If I don’t get the spotted dick during SQLBits, I should have enough time during the DevWeek.
    4. SQL Saturday #376 Budapest. The schedule is not public yet, but I am giving a presentation there. I would not like to miss the halászlé, the Hungarian fish soup.
    5. And of course, England again – SQL Saturday #372 Exeter. My presentation there is “Analysing Text with SQL Server 2014 and R”. And my last chance for the spotted dick this semester.
    6. SQL Saturday #369 Lisbon. I am having a seminar “Data Mining Algorithms in SQL Server, Excer, R, and Azure ML” on Thursday, May 14th, and two presentations on Saturday (again, the schedule is not public yet, so I am not revealing the titles of the sessions). Of course, visiting Portugal and not having the pastel de nata is not acceptable.
    7. May 18th – 20th – NTK, Portorož, Slovenia. One presentation, the title is still a secret, but not my co-presenter Milica Medić. Feel free to envy me:-) And yes, I am taking her for the horse steak, would not miss this at home.
    8. SQL Saturday #384 Varna. Again, the schedule is not public yet, but I am speaking there. Love to return to Bulgaria. In addition, this will by my first time in Varna and on the Black Sea coast. Oh, there are so many Bulgarian dishes I want to have again! Definitely баница (greasy pastry deliciousness) and шкембе чорба (tripe soup)!
    9. SQL Saturday #409 Rheinland. The schedule is still a secret. However, the Rheinischer Sauerbraten is in my plan. With a lot of beer.
    10. SQL Saturday 419 Bratislava. Finally, the Northern Slovenia, aka Slovakia, is getting its own SQL Saturday. Of course, I cannot miss it. There are not many dishes in Slovakia that would not be available in Southern Slovakia, aka Slovenia. However, the bryndzove halusky (small dumplings made of potato dough with sheep cheese and topped with scrambled bacon) dish is not well known in Ljubljana, so I am having one in Bratislava. But I am definitely refusing to eat any dish with word “kuraci” in its name. Search for the translation of this word from Slovak and from Slovenian, and you will understand why.

    Which events are you visiting? Hope we meet at some.

  • Data Mining Algorithms – an Introduction

    Data mining is the most advanced part of business intelligence. With statistical and other mathematical algorithms, you can automatically discover patterns and rules in your data that are hard to notice with on-line analytical processing and reporting. However, you need to thoroughly understand how the data mining algorithms work in order to interpret the results correctly. In this blog I am introducing the data mining, and in the following blogs I am unveiling the black box of data mining and explaining how the most popular algorithms work.

    Data Mining Definition

    Data mining is a process of exploration and analysis, by automatic or semiautomatic means, of historical data in order to discover patterns and rules, which can be used later on new data for predictions and forecasting. With data mining, you deduce some hidden knowledge by examining, or training, the data. The unit of examination is called a case, which can be interpreted as one appearance of an entity, or a row, in a table. The knowledge is patterns and rules. In the process, you use attributes of a case, which are called variables in data mining terminology. For better understanding, you can compare data mining to On-Line Analytical Processing (OLAP), which is a model-driven analysis where you build the model in advance. Data mining is a data-driven analysis, where you search for the model. You examine the data with data mining algorithms.

    There are many alternative names for data mining, such as knowledge discovery in databases (KDD) and predictive analytics. Originally, data mining was not the same as machine learning in that it gives business users insights for actionable decisions; machine learning determines which algorithm performs the best for a specific task. However, nowadays data mining and machine learning are in many cases used as synonyms.

    The Two Types of Data Mining

    Data mining techniques are divided into two main classes:

    • The directed, or supervised approach: You use known examples and apply gleaned information to unknown examples to predict selected target variable(s).
    • The undirected, or unsupervised approach: You discover new patterns inside the dataset as a whole.

    Some of the most important directed techniques include classification, estimation, and forecasting. Classification means to examine a new case and assign it to a predefined discrete class. Examples are assigning keywords to articles and assigning customers to known segments. Very similar is estimation, where you are trying to estimate a value of a variable of a new case in a continuously defined pool of values. You can, for example, estimate the number of children or the family income. Forecasting is somewhat similar to classification and estimation. The main difference is that you can’t check the forecasted value at the time of the forecast. Of course, you can evaluate it if you just wait long enough. Examples include forecasting which customers will leave in the future, which customers will order additional services, and the sales amount in a specific region at a specific time in the future.

    The most common undirected techniques are clustering and affinity grouping. An example of clustering is looking through a large number of initially undifferentiated customers and trying to see if they fall into natural groupings. This is a pure example of "undirected data mining" where the user has no preordained agenda and hopes that the data mining tool will reveal some meaningful structure. Affinity grouping is a special kind of clustering that identifies events or transactions that occur simultaneously. A well-known example of affinity grouping is market basket analysis. Market basket analysis attempts to understand what items are sold together at the same time.

    Common Business Use Cases

    Some of the most common business questions that you can answer with data mining include:

    • What’s the credit risk of this customer?
    • Are there any groups of my customers?
    • What products do customers tend to buy together?
    • How much of a specific product can I sell in the next time period?
    • What is the potential number of customers shopping in this store?
    • What are the major groups of my web-click customers?
    • Is this a spam email?

    However, the actual questions you might want to answer with data mining could be by far broader and depend on your imagination only. For an unconventional example, you might use data mining to try to lower the mortality rate in a hospital.

    Data mining is already widely used in many different applications. Some of the typical usages, along with the most commonly used algorithms for a specific task, include the following:

    • Cross-selling: Widely used for web sales with the Association Rules and Decision Trees algorithms.
    • Fraud detection: An important task for banks and credit card issuers, who want to limit the damage that fraud creates, including that experienced by customers and companies. The Clustering and Decision Trees algorithms are commonly used for fraud detection.
    • Churn detection: Service providers, including telecommunications, banking, and insurance companies, perform this to detect which of their subscribers are about to leave them in an attempt to prevent it. Any of the directed methods, including the Naive Bayes, Decision Trees, or Neural Network algorithm, is suitable for this task.
    • Customer Relationship Management (CRM) applications: Based on knowledge about customers, which you can extract with segmentation using, for example, the Clustering or Decision Trees algorithm.
    • Website optimization: To do this, you should know how your website is used. Microsoft developed a special algorithm, the Sequence Clustering algorithm, for this task.
    • Forecasting: Nearly any business would like to have some forecasting, in order to prepare better plans and budgets. The Time Series algorithm is specially designed for this task.

    A Quick Introduction to the Most Popular Algorithms

    In order to raise the expectations for the upcoming blogs, I am adding a brief introduction to the most popular data mining algorithms in a condensed way, in a table.

    Algorithm

    Usage

    Association Rules

    The algorithm used for market basket analysis, this defines an itemset as a combination of items in a single transaction. It then scans the data and counts the number of times the itemsets appear together in transactions. Market basket analysis is useful to detect cross-selling opportunities.

    Clustering

    This groups cases from a dataset into clusters containing similar characteristics. You can use the Clustering method to group your customers for your CRM application to find distinguishable groups of your customers. In addition, you can use it for finding anomalies in your data. If a case does not fit well to any cluster, it is kind of an exception. For example, this might be a fraudulent transaction.

    Naïve Bayes

    This calculates probabilities for each possible state of the input attribute for every single state of predictable variable. Those probabilities predict the target attribute based on the known input attributes of new cases. The Naïve Bayes algorithm is quite simple; it builds the models quickly. Therefore, it is very suitable as a starting point in your predictive analytics project.

    Decision Trees

    The most popular DM algorithm, it predicts discrete and continuous variables. It uses the discrete input variables to split the tree into nodes in such a way that each node is more pure in terms of target variable, i.e. each split leads to nodes where a single state of a target variable is represented better than other states.

    Regression Trees

    For continuous predictable variables, you get a piecemeal multiple linear regression formula with a separate formula in each node of a tree. Discrete input variables are used to split the tree into nodes. A tree that predicts continuous variables is a Regression Tree. Use Regression Trees for estimation of a continuous variable; for example, a bank might use this technique to estimate the family income for a loan applicant.

    Linear Regression

    Predicts continuous variables, using a single multiple linear regression formula. The input variables must be continuous as well. Linear Regression is a simple case of a Regression Tree, a tree with no splits. Use it for the same purpose as Regression Trees.

    Neural Network

    This algorithm is from artificial intelligence, but you can use it for predictions as well. Neural networks search for nonlinear functional dependencies by performing nonlinear transformations on the data in layers, from the input layer through hidden layers to the output layer. Because of the multiple nonlinear transformations, neural networks are harder to interpret compared to Decision Trees.

    Logistic Regression

    As Linear Regression is a simple Regression Tree, a Logistic Regression is a Neural Network without any hidden layers.

    Support Vector Machines

    Support Vector Machines are supervised learning models with associated learning algorithms that analyse data and recognize patterns, used for classification. A support vector machine constructs a hyper plane or set of hyper planes in a high-dimensional space where the input variables define the dimensions. The hyper planes split the data points into discrete groups of the target variable. Support Vector Machines are powerful for some specific classifications, like text and images classifications and hand-written characters recognition.

    Sequence Clustering

    This searches for clusters based on a model, and not on similarity of cases as Clustering does. The models are defined on sequences of events by using Markov Chains. Typical usage of the Sequence Clustering would be an analysis of your company’s Web site usage, although you can use this algorithm on any sequential data.

    Time Series

    You can use this algorithm to forecast continuous variables. Time Series many times denotes two different internal algorithms. For short-term forecasting, Auto-Regression Trees (ART) algorithm is used. For long-term prediction, Auto-Regressive Integrated Moving Average (ARIMA) algorithm is used.

    Conclusion

    This brief introduction to data mining should give you the idea what you could use it for and an overview which algorithms are appropriate for the business problem you are trying to solve. I guess you also noticed I am not talking about any specific technology here. These most popular data mining algorithms are available in many different products. For example, you can find them in SQL Server Analysis Services, Excel with Data Mining Add-ins, R, Azure ML, and more. Please learn how to use them with your specific product using the documentation of the product, by reading books that deal with your product, or by visiting a course about the product.

    I hope you got excited enough to read the upcoming blogs and visit some of my presentations on various conferences.

  • T-SQL Querying

    We are close to the publishing day of the T-SQL Querying book. Of course, like always in this series, the main author of the book is Itzik Ben-Gan. This time, besides me, Adam Machanic and Kevin Farlee are the coauthors. The information I want to share now is that you can get a substantial discount if you preorder the book today, Monday, February 16th, 2015. Pearson is running the Presidents Day Event and giving the following discounts for this and some other products:

    • Buy 1, Save 35%
    • Buy 2, Save 50%
    • Up to 70% off on featured video titles

    You can preorder the book using this link. Once the page opens, just click the President’s Day Sale banner and select our or any other book on sale.

    Happy querying!

  • SQL Server 2014 Upgrade Technical Guide

    If you plan to upgrade to SQL Server 2014, then this technical guide is a must. With 429 pages, it is a complete book, yet still available as a free download here. It covers all products and features in the SQL Server suite, and upgrades from versions 2005, 2008, 2008 R2, and 2012. It supplements the information available in Books Online. Besides the actual upgrade, the white paper also covers planning and pre- and post-upgrade tasks.

    This is the fourth upgrade technical guide I coauthored – all together, I was involved in versions 2008, 2008 R2, 2012, and 2014. This is the complete list of authors: Ron Talmage, Richard Waymire, James Miller, Vivek Tiwari, Ken Spencer, Paul Turley, Danilo Dominici, Dejan Sarka, Johan Åhlén, Nigel Sammy, Allan Hirt, Herbert Albert, Antonio Soto, Régis Baccaro, Milos Radivojević, Jesús Gil, Simran Jindal, Craig Utley, Larry Barnes, Pablo Ahumada. Thanks to everybody for a smooth process of writing and editing!

  • PASS SQL Saturday #356 Slovenia Recapitulation

    So the event is over. I think I can say for all three organizers, Mladen Prajdić, Matija Lah, and me, that we are tired now. However, we are extremely satisfied. It was a great event. First few numbers and comparison with SQL Saturday #274, the first SQL Saturday Slovenia event that took place last year.

    SQL Saturday #274

    SQL Saturday #356

    People

    135

    220

    Show rate

    ~87%

    ~95%

    Proposed sessions

    40

    82

    Selected sessions

    15

    24

    Selected speakers

    14

    23

    Countries

    12

    16

    The numbers nearly doubled. We are especially proud of the show rate; with 95%, this is much better than average for a free event, and probably the highest so far for a SQL Saturday. We asked registered attendees to be fair and to unregister if they know they can’t attend the event in order to make room for those from the waiting list. An old Slovenian proverb says “A nice word finds a nice place”, and it works. 36 registered attendees unregistered. Therefore, we have to thank to both, the attendees of the event and those who unregistered.

    Of course, as always, we also need to thank to all of the speakers, sponsors and volunteers. All volunteers were very helpful; however, I would like to especially point out Saša Mašič. Her work goes well beyond simple volunteering. I must mention also the FRI, the Faculty of Computer and Information Science, where the event was hosted for free. It is also worth mentioning that we are lucky to live in Ljubljana, such a beautiful city with extremely nice inhabitants who like to enjoy good food, hanging around and mingling, and long parties. Because of that we could be sure in advance that both speakers and attendees from other countries would enjoy spending time here also outside the event, that they would feel safe, and get help whenever they would need it.

    From the organizational perspective, we tried to do our best, and we hope that everything was OK for speakers, sponsors, volunteers, and attendees. Thank you all!

  • SQL Saturday #356 Slovenia Registrations

    SQL Saturday #356 Slovenia is practically full. OK, actually we have already reached the expected number of registrations (200). We have raised the number to 220, and we are close to that number as well. Therefore, we (the organizers, Matija, Mladen and me) need to ask all of you who are registered and already know that you will not be able to attend: please unregister and make room for those who would like to attend, but did not register yet. And you who would like to register, please do it as soon as possible, in order to get the confirmation immediately or to be at least at the top of the waiting list.

    We would like to make an appeal to all of you who are registered: please come. Please remember that this conference was made possible because of the speakers, who are using their time and come on their own expenses to give you state of the art presentations, because of the sponsors, who are giving us and financing the venue, the food, the raffle awards, and more, and of course, because of many volunteers who spend their free time to help with the organization. We are also paying a fixed number of meals to the catering company; therefore, we would throw the money away for those who are registered and would not come. In short: all you need to do is to wake up, get out of bed, get into a good mood, and come to the event to get top presentations, good food and meet friends!

    Thank you all!

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