India Becomes a Key Center for Analytics Outsourcing

Across the globe, enterprises are making huge investments for leveraging data analytics tools and technologies to provide customized offerings and improved digital engagement with customers. By 2018, the market for data analytics is expected to be worth $48.3 billion. Enterprises are now increasingly outsourcing the data analytics processes to less expensive locations like India. According to TechNavio, the Global Data Analytics Outsourcing market is expected to grow at a CAGR of 30.54% over the period 2014-2019.

Leading vendors of the data analytics outsourcing market according to the Tech Navio report are Accenture, Capgemini, Fractal Analytics, TCS, Wipro, and ZS Associates. India is a key outsourcing destination with a market share of 60% to 70% in 2014.

The global data analytics outsourcing market in 2012 according to a report by Avendus Capital was estimated to be $500 million in 2010, of which $375 million was delivered by vendors following the US-India model. By 2015, the data analytics market in India was expected to reach $1.15 billion. Among the pure-play analytics outsourcing vendors, Mu Sigma is one of the biggest while vendors like LatentView, AbsolutData, and Axtria form the tail end.

Mu Sigma

Founded in 2004 by Dhiraj Rajaram, Mu Sigma is based in Northbrook, Illinois and solves high-impact business problems in the areas of marketing, risk, and supply chain across 10 industry verticals. They have over 3,000 decision science professionals and more than 75 Fortune 500 clients. They have a delivery center in Bangalore and offices in the US, UK, and Australia.

Their revenue crossed the $100 million mark in 2012 and was expected to touch $250 million in 2014. They have so far raised $200 million from General Atlantic, Sequoia Capital, MasterCard, and Fidelity Investments. They last raised $45 million in February 2013 at a valuation of $1.5 billion.

LatentView

Founded in 2006 by Venkat Viswanathan, Pramad Jandhyala and Ramesh Hariharan, LatentView has sales offices in Princeton, New Jersey and Mumbai and a global delivery center in Chennai that develops models and applications for use by clients. LatentView provides analytics solutions for the Consumer Lending, Consumer Financial Services, Insurance, Consumer Goods, Retail, and Technology industries. They have over 25 clients including Microsoft, Pepsi Co, and Amazon Web Services.

In my interview with him, Venkat says that there is a talent gap that they are able to fill,

“It is not enough to just see technology investments; you also need human capital to go with these investments. You need people who have the right blend of knowledge in terms of understanding marketing, math, and data. That combination of business, math, and data is unique for the kind of work we do, and that is the value our clients see.”

They have over 500 employees and expect to have 1,000 employees by 2016. LatentView is estimated to have revenue of between $20 million and $30 million and a y-o-y growth rate of over 100%.

AbsolutData

Founded in 2001 by CEO Dr. Anil Kaul, Sudeshna Datta, and Suhale Kapoor, AbsolutData is based out of San Francisco, California and specializes in big data, high end business analytics, predictive modelling, reporting, and data management services. The company works with retail, consumer goods, technology and hospitality companies, across US, Europe, and Asia Pacific. Clients include Adidas, Sprint, and Autodesk. They have domestic offices in New York and Los Angeles and its international offices are located in Gurgaon and Bangalore in India, London, UK, and Dubai, United Arab Emirates.

In my interview with him, Anil says their the core competence is their ability to understand a business issue, translate that into an analytical problem, and then use data and analytics to come up with an answer to that question.

Their revenue in 2014 was between $15 million and $20 million and have around 450 employees. They raised $20 million in funding from Fidelity Growth Partners India in August, 2012.

Axtria

Founded in 2010 by Jaswinder Chadha and Navdeep Chadha, New Jersey-based Axtria provides data analytics applications and cloud services. They have over 10,000 individual users from sixty clients. Their solutions span various verticals like pharmaceuticals, banking, healthcare, financial services, and high-tech. Their upcoming product is a sales analytics service embedded inside Salesforce.com.

They have over 60 clients and offices in California, Arizona, Georgia, Virginia, and Gurgaon, India. They have over 400 employees and plans to increase the head count to 5,000-10,000. Their revenue in 2014 was over $30 million.

Prior to Axtria in 2000, the two brothers had founded another pharmaceuticals data analytics company marketRX, which was doing about $50 million a year and was sold to Cognizant in 2007. The group of four angel investors who had helped them build marketRx were also very interested in helping them build another company. They have so far raised $44.7 million in four rounds. In July 2015, they raised $30 million in a Series C founding round led by Helion Ventures and accompanied by Amarpreet Sawhney, Deshpande Foundation, Fred Khosravi, and Richard S. Braddock.

The burgeoning growth in analytics outsourcing market is a result of shortage in the US or European system for people with analytical skills required to provide meaningful insights, especially in the domains of marketing and manufacturing. That raises the question of how the global talent gap in terms of technology-savvy, quantitative and business-savvy talent is going to get groomed. This is where the white spaces are in terms of doing educational ventures that focus on developing this talent pool in a meaningful way addressing communication, business, and analytical skills.