About a year back, the global numbers for the Analytics software market was pegged at 42 billion USD, growing at 10% CAGR, and expected to touch 73 in the next five years. It is envisaged that the Indian analytics software and services opportunity – bullish right now – will clock in a 300% growth by 2020, from its current level of 1 billion USD.
What does it mean for analytics product segment which is catalyzing growth in various dimensions already? Presently, with 400–odd Indian companies, this market accounts for a USD 144 million in revenues, growing at 17 per cent year on year. So much for the raw numbers that’s laden with avowed promise, waiting to crystallize. Let us see how.
From an Indian standpoint, the lion’s share is represented by enterprise BI platforms, almost half of the analytics products market, but close on its heels, are marketing analytics (social media, campaign and customer lifecycle management) and niche solutions (visualization and dash-boarding, risk, mobile and security analytics) witnessing a dominant participation from visionary start-ups. There’s a clear trend as we see the early adopters from Telecom, BFSI and Retail (both online and offline) industries.
The factors leading to this kind of growth include: need for better decision making, to drive revenue; enable process transformation and draw deeper customer insights through targeted marketing. The future is veered towards predictive analytics, solutions, which will reside in the cloud.
It’s also driving funding in this segment, especially in niche solutions and marketing analytics. Close to 400 million USD has been invested in this segment alone since 2014, and the healthy trend continues. Globally, a swathe of M&A deals involving data analytics start-ups have given that added push and rise in valuations, seen currently. Increasingly, the lookout for strategic investors is becoming evident, as entrepreneurs look to leverage connects and foray into new markets.
As the industry matures, it is becoming clearer that Indian companies cannot simply ride on the cost arbitrage factor alone, and the need to communicate a clear value proposition becomes imperative. The exact nature of the problem that is being solved, and its impact needs articulation. It is a challenging journey and often the temptation to give in to services based business model can be overpowering. A continued focus in product development is required to ultimately hone the product to perfection. To build a smarter product, it is essential to be in close contact with the user and understand the finer nuances of his business, hence geographical proximity in this regard is only a by-product of the thought process.
On a different note, often, these solutions sit atop imperfect, incomplete data, and apportioned a reaction time of milliseconds, by when the yes/no answer has to be given – if the transaction can pass through or not. Predictive analytics is the next logical step towards big data & analytics, where future prognosis models can really transform the findings from predictive analytics into a real competitive advantage for the businesses. The much touted “gut feel” in decision making is clearly on its way out.