Real-time push could stutter India's big data analytics outsourcing

For India, a global BPO (business process outsourcing) powerhouse, to become a big data analytics outsourcing hub will not be as simple or straightforward as it seems. A key obstacle will be the growing emphasis on real-time business intelligence, where physical proximity plays a major factor.

Whether India will eventually also dominate as a global hub for big data analytics outsourcing is a premature and difficult question to address, said Frederic Giron, principal analyst and vice president at Forrester Research.

Despite the country's status as a software, BPO and IT talent powerhouse, turning into an outsourcing hotspot for big data analytics is not all that straightforward, the analyst said.

There is currently a big shortage of data scientists everywhere worldwide, although more Indian universities have started offering data analytics degrees so there should be more data scientists available there in the future, Giron noted.

Business and operating models around data analytics outsourcing services are also not yet well-defined, he added.

Business models as well as business analytics are today increasingly being driven by real-time, in which case proximity simply allows for faster turnaround, Giron explained.

Ideally, data scientists should be located close to the business center of decision-making in order to act and react quickly to the dynamic business requirements in real-time.

The physical distance means the offshore model for big data analytics will likely perform poorly, he added. The instantaneous quality of real-time means any potential delay or latency caused by physical distances and connectivity would defeat the purpose.

Since real-time analytics is the main value proposition of big data analytics, there is little relevance in having any offshore offering, he argued. Instead it will propel companies to instead build up their own internal analytic capabilities to support their day-to-day requirements.

Some room to grow
Still, big data analytics outsourcing could still have use cases, for which India's growing longstanding competency in IT services will come in handy. These include consulting engagements or ad hoc initiatives by customers meant to address specific or large-scale business queries that leverage a wide range of different data sets, Giron noted.

Other industry observers were more optimistic for Indian vendors, noting there are workarounds and alternatives.

Surya Mukherjee, senior analyst for information management at Ovum, said, Indian vendors can tackle the issue of proximity simply by increasing the number of onshore staff at the client's premises to carry out the analytics.

This method is still cheaper for the customer than hiring talent on its payroll, he pointed out.

Bhavish Sood, research director at Gartner, added Indian vendors eyeing the big data analytics market would also target domestic customers, rather than foreign ones. Many local analytics businesses have offerings that are either a one-off or standalone service or through packaged analytical applications, he noted.

Citing Gartner figures, he noted the analytic applications segment of the entire business intelligence (BI) software revenue market in India will nearly double from US$14.2 million in 2013 to reach US$27.8 million in 2016.