At a time when analytics is becoming more pervasive, helping businesses across sectors, India is expected to maintain its edge over major offshore destinations such as China, the Philippines, Eastern Europe and Latin America, according to a recent report.
The demand for this service from India will be driven by a host of factors such as availability of talent pool, maturity of the industry and a wide spectrum of services, says a report prepared by financial services firm Avendus Capital.
Data analytics is the method of using raw data by extensive use of statistical and quantitative analysis for the purpose of drawing business-related conclusions and for predicting business outcomes. The banking and financial sectors, one of the earliest adopters of knowledge services, are the largest user of analytics, followed by the retail, healthcare and pharmaceutical sectors.
| SPREADING WINGS | |||
| Estimated offshore knowledge services in India by 2015 | |||
| |||
| Acquisitions by Indian companies in analytics space | |||
| Date | Acquirer | Target | Acquisition size ($ mn) |
| Mar ‘07 | WNS | Marketics Technologies, an offshore analytics services provider | 65 |
| Oct ‘07 | Cognizant | MarketRx, a US-based analytics solutions provider | 135 |
| Sept ‘11 | Genpact | US-based Symphony Marketing Solutions | 43 |
| Sept ‘11 | Genpact | EmPower Research, a research & media monitoring company |
NA |
Australian analytics firm
According the report, the global data analytics outsourcing market stood at $500-550 million in 2010, of which Indian service providers delivered $375 million. This accounted for about 19 per cent of India’s $2-billion offshore knowledge services market. By 2015, the data analytics market in the country is expected to reach $1.15 billion, to constitute 21 per cent of the overall Indian knowledge process outsourcing (KPO) market opportunities of $5.6 billion.
“Although this market has been around since early 2000s, the exponential growth in data generation, significant decrease in data storage cost and increased need of companies to make decisions based on actionable insights, have increased the demand for data analytics services,” said Amit Singh, executive director (technology and outsourcing), Avendus Capital.
He said US, the biggest market for data analytics outsourcing, is estimated to have a shortage of 140,000-190,000 professionals with analytical capabilities by 2018. “This talent supply gap is expected to boost demand for analytics outsourcing services what the Indian service providers could leverage on.”
The service providers’ landscape in India is split between pure-play analytics vendors, KPO services providers and BPO (business process outsourcing) services providers, who also provide analytics services as a part of their offerings. Besides, global companies also source analytics services from their captive centres in India.
Among the pure-play analytics vendors, Sequoia Capital and General Atlantic-invested Mu Sigma is the biggest player in India. Besides, there are about 15 different companies such as AbsolutData, Fractal Analytics, ZS Associates, LatentView and Opera Solutions, which are trying to position themselves in this market. Among the large BPO services providers, Genpact has a large analytics practice, with close to $200-300 million coming from this business.
In the past, Genpact acquired companies such as Symphony Marketing Solutions and EmPower Research, which gave a boost to its analytics business.
In the past, Genpact acquired companies such as Symphony Marketing Solutions and EmPower Research, which gave a boost to its analytics business.
“Analytics is an exciting opportunity for Indian players and for India. Also, as we spoke with clients and thought leaders in the US and Europe, it became apparent that India has a leadership position and is well-ahead of the curve in marketing analytics,” said Anil Kaul, chief executive officer of AbsolutData.
