The data analytics outsourcing market was valued at USD 3.04 billion in 2019, and it is expected to reach USD 9.46 billion by 2025 at a CAGR of 21.5% during the forecast period (2020 - 2025). Organizations find it time-consuming to manage the huge volume of data generated in a systematic manner. Thus, the demand for data analytics outsourcing vendors is increasing, so that companies can take quick decisions.
- Increasing volume and variety of data being generated are the major driving factors for this industry. According to IBM, currently, 90% of the data in the world has been created in the last two years. The data contains trends and insights which can be observed with the help of qualitative and quantitative methods provided by data analytics companies. The ability to make data-driven decisions is crucial to any business.
- However, the lack of a skilled workforce is the factor hindering the market growth. In a report titled 'The Future of Jobs 2018', the World Economic Forum (WEF) disclosed that around 54% of the global workforce had to be re-skilled or up-skilled to work in disruptive and digital technologies spawning the virtual world.
- Further, with the onset of COVID-19 pandemic, data analytics is anticipated to witness an increase in demand, especially from the healthcare sector. For instance, in April 2020, pharmaceutical companies GlaxoSmithKline (GSK) and Vir Biotechnology partnered to advance coronavirus treatment development with data analytics, using artificial intelligence and CRISPR.
Key Market Trends
Retail Industry to Dominate the Market
- Online retail is responsible for generating the maximum volume of data. According to the most recent Shopping Index of Salesforce, e-commerce grew by 20% in the first quarter in 2020, globally.
- Moreover, in the United States, the Census Bureau reported that online commerce represented 9.6% of total retail, and around 87% of the US shoppers began their hunt in digital channels, up from 71% the prior year.
- Due to the increasing number of shoppers, the data analytics companies are introducing new tools to ease the retailer's pain of handling a large number of customers.
- Kroger and Microsoft announced a collaboration in January 2019 to redefine the customer experience using Kroger Technology products powered by Microsoft Azure, the retailers' preferred cloud platform for Retail as a Service (RaaS).
Asia-Pacific to Significantly Drive the Market Growth
- Due to population growth and the rise in e-commerce, Asia-Pacific is experiencing a surge in data generated from digital products and services.
- India, which is facing increasing participation from foreign and private players, is predicted to generate revenue worth USD 60 billion in retail by 2020, according to the IBEF. This increased revenue and demand for retail sales may generate more data requiring efficient managed services.
- New sources of data from log files, transaction information, and sensor data social media metrics present new opportunities for retail organizations to achieve competitive advantage in this region.
- Moreover, China's e-commerce is growing steadily, with several existing players generating optimistic sales. For instance, Alibaba's e-commerce amounted to revenue worth RMB161,456 million (USD 23,192 million) in the fourth quarter of 2019, with an increase of 38% year-over-year.
The market studied is fragmented with a variety of vendors proving business process solutions for big companies and SMEs. As the amount of big data generated by enterprises increases, more vendors are being contacted for the management of enterprise data and providing data intelligence services.
- May 2019 - Infosys partnered with ABN AMRO in the Netherlands by acquiring 75% of the shareholding in its wholly-owned end-to-end mortgage administration service provider, Stater NV. The specialized knowledge and experience of Stater in the mortgage services market, combined with the global reach, AI, digital transformation, and automation capabilities of Infosys, may potentially create differentiated solutions for the market.
- March 2019 - IBM bagged USD 700-800 million outsourcing contract with Voda-Idea. This was done to leverage IBM's expertise in hybrid cloud, data analytics, and AI capabilities and help deliver better customer experience.
- January 2019 - Accenture partnered with Siemens in a five-year deal to run and maintain several of the firm's data analytics and business intelligence services. One of the transitions being worked on is the upgrading of its data science operation.
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