BANGALORE Oct 8 Shopping in a U.S. department
store? Surveillance cameras may be watching, and not because you
might be a shoplifter.
In minutes, video of which aisles you visited, what products
you picked up and put down, what you bought and the displays
that caught your fancy will be sent to a company in Bangalore,
"These logs can be analysed to determine propensity to
purchase, what a customer's intent, satisfaction, sentiment is,"
said Dhiraj Rajaram, CEO of Mu Sigma, which says it is among the
world's biggest pure-play data analytics companies.
The business of storing, decoding and analysing unstructured
data - think video, Facebook updates, Tweets, Internet searches
and public cameras - along with mountains of facts and figures
can help companies increase profits, cut costs and improve
service, and is now one of the world's hottest industries.
It's called Big Data, and although much of the work is done
in the United States, India is getting an increasing slice of
the action, re-energising an IT sector whose growth has begun to
One reason for the emergence of Big Data as India's next big
thing in IT is the dramatic fall in the costs of storing and
working with huge volumes of data with the advent of cloud
computing and open-source software programmes such as Hadoop.
"There are hundreds of (analytics) boutiques in India right
now. Every other week I hear some of my friends have started on
their own," said Santosh Nair, who quit a job in an IT services
provider four months ago to open Analytic Edge.
The Bangalore firm has studied pharmacy sales, population
trends and other data to help a U.S. funeral company pinpoint
areas for its marketing campaigns.
Others are getting into the business of data storage and
processing as costs plummet.
"It doesn't mean I need a server which has 50 terabytes of
space. Cloud technology helps me rent space which is cheap,"
Nair said. "Ten terabytes of space might cost me about $500 a
month. It's not expensive."
That amount of data is equivalent to about 20,000 hours of
Globally, data output last year was estimated at 1.8
zettabytes - 1.8 billion terabytes, or the equivalent of 200
billion full-length high-definition movies.
Millions of networked sensors in cameras, mobile phones and
other devices, along with spiralling output from social media
sites, are contributing to the data explosion, said a report on
Big Data last year by the McKinsey Global Institute.
This has great potential for businesses, it said.
"We are on the cusp of a tremendous wave of innovation,
productivity and growth, as well as new modes of competition and
value capture - all driven by Big Data as consumers, companies,
and economic sectors exploit its potential."
As India stakes its claim in the knowledge-intensive
business of Big Data, however, it stands to lose much of the
cost advantage that helped it to dominate business-process
Instead, industry officials say, India's success will depend
on its large numbers of maths-savvy IT engineers and the skills
its IT industry has picked up over 15 years as the world's
biggest outsourcing destination.
"The Indian cost benefit is eroding significantly," said
Mahinder Mathrani, operating partner at the Symphony Technology
Group, a Palo Alto, California-based private equity firm that is
in the software and services field.
"In the big data analytics space, it will be more about
talent arbitrage," he said. "Good statisticians who have a blend
of business acumen and analytic skills and also technical
aptitude aren't inexpensive, even in India."
POOL OF TALENT
India's pool of talent will be in demand, with data
analytics specialists seen globally in short supply for years to
come as Big Data takes off.
But the Indian industry also believes it will gain an
advantage from its broader expertise in services.
"We are a services nation," said Sundararaman Viswanathan, a
manager at Zinnov, a software consultancy in Bangalore. "For
example, we had the Internet and we built the outsourcing
industry around it. We are extremely good at it."
"We can build a service which is around asking the right
questions, and putting together the insights and giving it to
India's National Association of Software and Services
Companies (Nasscom) forecasts that the Big Data business in
India will be worth as much as $1.2 billion within three years,
a six-fold increase from current levels.
That would be double the growth rate it expects for Big Data
worldwide: to $25 billion from $8.25 billion.
"It's an industry where, because of cost, skill, language
and ability to learn, India stands a very, very strong
advantage," said Rajeev Baphna, CEO of Bangalore-based data
services company Analyttica.
"India started to focus on creating a space in this field by
leveraging a number of advantages it has: One, talent; two, the
ability to have a very strong process-driven delivery at lower
costs that the services industry has mastered."
It's not just boutique firms that have entered the field.
The giants of India's outsourcing such as Infosys Ltd
and Wipro Ltd have also moved into the Big Data
business, but smaller firms may be better placed to deliver.
"The larger, well-established companies have a challenge,"
said Symphony Technology's Mathrani.
"Their existing business models preclude them from being
nimble. This is not about migrating work already being done
somewhere else. It's about solving business problems for which
no specification exists."
GROWTH IN OUTSOURCING
Globally, Big Data is used in a multitude of applications.
IBM Corp has a team of 5,000 crunching data to help
oil companies find, extract and process oil more efficiently.
General Electric Co said in May it could spend up to
$1.5 billion to acquire data analytics companies, aiming to mine
multiple data points and find ways to extend how long gas
turbines, jet engines and other heavy equipment can run without
In retail, the scope of Big Data is enormous. McKinsey has
estimated that a retailer using Big Data to the full, including
trends from social media such as Twitter and Facebook, can
increase operating margins by more than 60 percent.
Healthcare, insurance, banking and other financial services
are also big users.
For India's IT industry as a whole, the surge in Big Data
comes at an opportune moment.
India's exports of software and IT services, which make up
the outsourcing industry, should grow 11 to 14 percent to $77
billion to $79 billion in the year ending March 2013, according
to Nasscom. But this is a tapering off from 20-plus percent
growth a few years ago.
In addition, outsourcing and offshoring in the financial
industry - about 30 percent of the total - has come under fire
and will likely face stricter supervision after recent lapses
involving offshore units in India.
These include accusations by the New York State banking
regulator in August that Standard Chartered Plc hid
$250 billion in transactions with Iran and that the entire
foreign asset compliance process of its New York branch was
outsourced to Chennai, India, with no evidence of any oversight
or communication between the Chennai and New York offices.
In Big Data, however, while the revenue numbers are still
small, the mood is upbeat.
"We think this is just the tip of the iceberg," said Rajaram
at Mu Sigma. "The world is only going to change faster and
faster and faster. There will be more data, more algorithms,
more applications, more new technologies."
His eight-year-old company is growing rapidly, and the
average age of his 2,000 staff is about 25 or 26, he said.
"It's like hiring a bunch of Tony Starks, train them on the
Iron Man Suit and they go out and defeat the bad guys."