Big Boss for you in Blore

BANGALORE, INDIA: 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, India.

"These logs can be analyzed 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 analyzing 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-energizing an IT sector whose growth has begun to falter.

 

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 CD-quality music.

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 spiraling 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 outsourcing.

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."

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.