Why Big Data is a Big Deal for Global Outsourcers

By Ann All

Data volumes are growing so fast that companies now refer to this huge flow of incoming information as Big Data. According to IBM, 2.5 quintillion bytes of data are generated every day, much of it from emerging data sources such as social media channels and product sensors. The job outlook for IT professionals with the skills to wrangle so-called Big Data is growing nearly as fast as the data itself. According to Gartner, 4.4 million IT jobs globally will be created to support Big Data by 2015. Yet only one-third of the jobs will be filled, making folks with Big Data skills “a scarce, valuable commodity,” says Peter Sondergaard, a Gartner SVP and global head of Research.

One of the major reasons companies outsource services is to fill skill gaps in their internal organizations. According to a Harvey Nash survey released in August, 56 percent of CIOs said they felt they had a skills shortage that would prevent their employers from keeping up with the pace of change, a 7 percent increase from the company’s 2011 survey.

Given this, it’s not surprising that outsourcing providers are building Big Data practices. Indian companies, in particular, are eager to capitalize on the trend. A Reuters report cites a prediction from India’s National Association of Software and Services Companies (Nasscom), which says Big Data business in India will be worth as much as $1.2 billion by 2015, a six-fold increase from current levels.

According to the report, India may enjoy an edge because of its deep pool of students trained in mathematics and its expertise in creating process-driven delivery models. Because of the specialized skills required, service companies will be able to command a premium for Big Data services.

The Reuters piece quotes Mahinder Mathrani, a partner at a California-based private equity firm, who says Big Data analytics will be based on “talent arbitrage” rather than cost arbitrage. “Good statisticians who have a blend of business acumen and analytic skills and also technical aptitude aren’t inexpensive, even in India,” he says.

But there may be a hitch to offshoring Big Data analysis. In a recent ZDNet article, Forrester Research analyst Frederic Giron says most companies are interested in real-time, or near real-time, analysis. Thus latency issues could be a downside, Giron says.

This could be good news for providers of onshore and nearshore outsourcing services. The article quotes Ovum analyst Surya Mukherjee, who suggests Indian companies might send staff to their clients’ workplaces (or to lower-cost nearshore locales, we’d add) for Big Data work.

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This article first appeared in Global Delivery Report