Overview of Analytics Industry in India (my notes and views)

One of the most common question I get asked around is

What is your view about Analytics industry in India?

and it comes in various shapes and sizes. From the curious ones asking finer details about the industry, the optimists confirming that data science would be the fastest growing field in the next decade to pessimists asking whether data scientists would even be required 5 years from now?

To be honest, I myself don’t know answers to a lot of these questions (and that is the reason it is exciting to be working in this domain!) and at times I discuss these questions with various thought leaders in industry. But, I do have my views on these questions. These views are mostly based on my work experience and interaction with people in industry across the globe over last 9 years.

Since I get these questions very frequently, I hope that a lot of people would be interested in knowing these views. Hence, I thought I would share my notes and views on the industry through this article. I hope this helps those thousands of people trying to answer these questions for making their own decisions.

Table of Contents:

• Overview of Analytics / data science industry
• How big is analytics industry and how fast is it growing?
• Which sectors are using / benefiting from analytics?
• What about jobs? Are analytics jobs increasing by the day?
• Rise of Analytics Startups globally & in India
• The analytics training market in India
• A few other trends in Indian analytics industry

Overview of Analytics / Data Science industry:

Before we proceed any further, let us understand the setup of analytics industry today. This section becomes the basis for the rest of the article, so you should put close attention to this section.

Data Science industry is best understood through following diagram:

As you can see, the industry can be looked as a summation of three different verticals – Data Science products, the in house analytics happening in various companies and the third party services / consultancy provided by companies. Among the three, it is very difficult to size the in house analytics setup. How do you put a value to the contribution of data science in the products and services provided by Google?

Hence, whenever you hear any metric related to size of data science industry, it would mostly be focused on either products or services. Also, there are a few additional industries associated with data science which are not covered in this framework. These would include data science training institutes, placement agencies and even Analytics Vidhya! We will touch upon these associated industries later in the article.

How big is analytics industry and how fast is it growing?

Size of analytics services market:

According to Avendus Capital (in 2012), the data analytics market in India is expected to reach $1.15 billion by 2015, and will account for a fifth of India’s knowledge process outsourcing (KPO) market of $5.6 billion. Further, as per recent report published by NASSCOM (2014), this is further expected to double up and become $2.3 billion by 2017-18. Bulk of this revenue would be driven by the top companies like Mu-Sigma, Fractal, AbsolutData, LatentView etc.

According to a research from Everest Group, the size of global analytics services is between $2 – 2.5 billion in 2013. This essentially means that India holds 35% – 50% of global analytics services market.

The Analytics Products market:

If you thought, the numbers quoted above were big, there are bigger numbers coming ahead. And if you thought that the numbers above were not so big, continue reading. The global Data Science / analytics marketplace today stands at $100 billion and is growing at 30% year on year.

So, the services industry mentioned above is actually a small portion in overall scheme of things. However, for some reason the focus of data science industry in India has been services and not products – possibly because of presence of the employers.

Which sectors are using / benefiting from analytics?

In terms of penetration, different sectors have seen different penetration and adaption of analytics. Here is the distribution of services revenues (globally) by various sectors from the study done by Everest research in 2013.

As you can see, the sectors with highest revenues are CPG & Retail, BFSI, Telecom and Healthcare. Similar trend holds true for India as well. I would think that BFSI & telecom would be a larger share in India as opposed to global revenues based on my interaction with people in industry, but that is a view.

For more details, people can look at the list of companies using analytics in India here.

What about jobs? Are analytics jobs increasing by the day?

I am sure you have heard the headline here. The famous McKinsey report quotes a shortfall of up to 190,000 data scientists and 1.5 Mn data managers in the U.S. alone. The shortage obviously increases when you look at the situation across the globe. Let us add more texture to this.

Here is what Google Trends speaks about searches related to analytics jobs across the globe:

While the global trend is quite evident and India is the most significant area in the heatmap of Google searches, the trend in India looks to have lot more noise. Here is how it looks specifically for India:

Looking at regional searches with in India, Gurgaon & Bengaluru seem to have the highest search for analytics jobs, while Bengaluru, Hyderabad and Chennai seem to have most searches for Big Data jobs. This is also in sync with our experience with jobs in industry. As per our estimate, Bengaluru would have 30 – 40% jobs market share, Delhi NCR would have 25 – 30% market share and then the remaining cities. Here is a heat map of the same:

Rise of Analytics Startups globally & in India

This is probably one of the most exciting times to be in a startup, more so for a data science startup. In general, people are more open to taking risk than ever before. Big Data and Data Science projects have received a very favorable response from the venture capital. Today data science is directly or indirectly impacting every major start-up. A while back, we also saw an increase in data science based start-ups in Y Combinator.

Just for context, here is a list of top 10 most funded analytics / Big Data startups in Jan 2015 (source: Gill Press on Forbes):

Start-up Name                            Amount of Funding      What are they doing?

Cloudera                                            $1040 Million                      Hadoop-based software, services and training

Palantir Technologies                     $950                                      Analytics applications

MongoDB                                          $311                                        Document-oriented database

Domo                                                 $250                                       Cloud-based Business intelligence

Mu Sigma                                          $195                                       Data-Science-as-a-Service

DataStax                                            $190                                       Apache Cassandra-based platform

MapR                                                 $174                                        Hadoop-based software, services and training

Opera Solutions                               $122.2                                    Data-Science-as-a-Service

Guavus                                               $107                                       Operations intelligence platform

Data Science start-ups in India

Until few years back, analytics market in India was primarily being driven by Blue Chip companies and Consulting Firms. But, the situations has started to change now. The ferocious wave of startups striking every possible industry, also entered the analytics market.

While it may be too early to comment on success / failure of these startups right now, what I like is the fact that some of these start-ups are aimed towards creating products rather than the services market. For example, Gramener is creating a software for visualizing data. Here is a list of some exciting startups in India. As would be evident from the list above, Opera Solutions and Mu Sigma would be the most funded start-ups from India.

The analytics training market in India

As mentioned in the overview section, this does not fall directly under data science industry, but is closely associated with the industry. Hence, I thought I would add some details on this as well. Lately, there has been an explosion in number of institutes (both recognized and new) offering data science trainings / courses in India. On one side, there are likes of ISB, Great Lakes, Praxis and IIMs offering several executive programs and on the other hand, there are several players providing short term certifications. I think the size of analytics training industry would be close to ~100 Crores p.a. and is increasing at approximately 20% p.a.

While there has been an increase in the number of offerings to create industry professionals, till now the industry has not been very open to these candidates. Among the ones who undergo these trainings, only a few get placed in analytics roles with in 3-6 months of finishing the training.

P.S. This is by no means saying that people don’t get placed. I have seen many transition stories, but it takes time and effort. You can read this article for a more detailed view about transition into analytics.

So, there is a kind of imbalance in industry today, where on one hand there are trained people wanting to enter the industry and on the other hand companies are not able to find talent for the open positions they have.

So, there is a kind of imbalance in industry today, where on one hand there are trained people wanting to enter the industry and on the other hand companies are not able to find talent for the open positions they have. Normal cycle for filling up an analytics position in industry stands at staggering 6 – 12 months. And the more senior position you are looking for, the more difficult it is go get good people. Over time, I expect this gap to narrow, but there is clear need of improvement here.

A few other trends in analytics industry in India:

• While Bengaluru & Delhi NCR have traditionally been the hub of analytics in India, there are new cities like Pune, Hyderabad and Chennai coming up fast on the heat map.
• In terms of tools, SAS would still dominate the market share as most of the banks, telecom players and CPG players rely on SAS. However, the start-ups and consultancies have clearly started focusing on R and Python. So, this might be up for a change, especially given the trend in the U.S.
• Currently, there are only a limited set of companies working on real Big Data analytics problem. While Big Data has generated a lot of buzz, most of the job openings today are focused towards developers as opposed to analysts.
• The industry is going through really tough competition in recruiting the top talent directly from colleges. This has resulted in a very healthy increase in pay packages to the best talent from premier institutes.
• In coming times, I expect a lot of action in analytics in the heated e-commerce space in the country. With the likes of Flipkart and Snapdeal setting up their own analytics units and Amazon being Amazon, data assets are expected to create a differentiation in coming times.

End Notes

This article is meant to provide an overview on the current situation of analytics industry in India. Please note that some of the information mentioned above are my views based on my interaction with people. It may or may not be wrong. If you have spent a few years in industry in India or outside, I would love to hear your take on these subjects (and otherwise). If you can share your views and notes through the comments below, I would love to hear them and people reading this would benefit tremendously.

Sources / References:

• http://indianexpress.com/article/business/business-others/analytics-market-to-double-to-2-3-billion-by-fy18/
• http://dataconomy.com/big-data-implementation-set-to-rise-three-fold-in-india-by-2015-according-to-new-survey/
• http://www.forbes.com/sites/gilpress/2015/01/31/top-ten-most-funded-big-data-startups-january-2015/
• http://www.iitk.ac.in/ime/MBA_IITK/avantgarde/?p=1165