Data analytics services market in India to grow 3 times, could touch $1.15B in 2015

Anand Rai |

The data analytics services market in India is set to grow three times and is expected to touch $1.15 billion in 2015, an over 67 per cent increase from $375 million in 2010, according to a report on analytics outsourcing by Avendus Capital, a leading financial services firm. India alone accounted for over 70 per cent of the total global data analytics outsourcing market ($500-550 million) in 2010.

Analytics outsourcing helps companies get their analytics needs met without having to take on the responsibility of another new process. And for those who don’t already know what data analytics is, it is the science of examining raw data for the purpose of drawing business-related conclusions about the information, and for modelling and predicting business outcomes.

According to the report, over the last decade, India has matured as the preferred outsourcing destination for IT and ITeS services, due to a number of factors that include increase in data generation, cost savings, operational efficiencies, access to a highly talented workforce and improved quality.

Here’s a look at the mostly India-specific findings of the report:


Knowledge services outsourcing


The global knowledge services outsourcing market (of which data analytics outsourcing is a subset) is estimated to grow at a compound annual growth rate (CAGR) of 24 per cent between 2010 to 2015, to reach $7.9 billion. India will remain the largest provider of these services with around 70 per cent of market share during this period.

While business research accounts for the largest share of the knowledge services outsourcing market in India (with 44 per cent), its share will reduce primarily due growth in other segments like data analytics and legal process outsourcing services, which are expected to emerge as the fastest growing segments, primarily driven by organisations seeking data driven decision making.


Data analytics outsourcing

India is expected to remain the preferred destination for analytics outsourcing over Asian counterparts like China, Philippines, etc., and given its head start, mature delivery models and domain expertise, it would maintain its dominance in the near to medium term.

As the industry matures, Indian analytics service providers will expand offerings beyond traditional verticals and move towards providing more complex services like model development, services based on proprietary IP and consultative offerings, etc.

India was ranked 2nd (with 3.9 million graduates) after China (with 6.3 million graduates) in terms total annual graduates in 2010. However, India will remain to be attractive as an outsourcing destination due to its large talent pool with process expertise and knowledge of the English language.

The growth capital needs of this highly fragmented industry will translate into an attractive investment opportunity for private equity funds.

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