Insights into Big Data and Analytics in Brazil From a Nascent Market in 2013 to a Billion Dollar Industry by

2018

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January 2014

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Q&A

Guilherme K Campos, Industry Analyst

Frost & Sullivan

guilherme.campos@frost.com

Connect with me on social media:

@GuiKatzor

http://br.linkedin.com/in/guilhermekcampos/

@Frost_Latam

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Executive Summary

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Executive Summary

• Revenue for the Brazilian Big Data market was $243.6 million in 2013. Revenue is expected to reach $965.0 million by 2018 at a 31.7% compound annual growth rate (CAGR).

• The growth speed of internal and external data created a problem for Brazilian companies that were not prepared to process all of the information, increasing the time spent on some routine processes. With that in mind, in 2013 some enterprise companies started to work with vendors to understand how Big Data solutions could help solve these problems and provide a competitive advantage.

• The year 2013 was no better for this market, mainly because most Brazilian companies still had no idea as to how Big Data can help and change their businesses.

• Return on investment (ROI) was another restraint in the acquisition of Big Data solutions because vendors have difficulty presenting a clear ROI to their prospects due to the complexity of these projects. Some vendors are breaking these projects into several deliverables and objectives to have a clearer ROI.

• Many solutions offered by the vendors require extensive IT expertise from customers. Because of the low concentration of these experts in the Brazilian market, companies are starting to ask themselves if this is the right time to invest.

Source: Frost & Sullivan

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Executive Summary (continued)

• Some verticals that can be highlighted in 2013 were finance, especially doing fraud-analysis projects; telecom, working on projects to reduce their churn rate; and retailers, starting to personalize their physical stores and Web sites according to the customers’ characteristics. Government is a segment that has high expectations for developing Big Data projects during the next 2 years.

• A noticeable feature of the Brazilian Big Data market is its level of concentration. The top 5 participants capture 57.5% of the total revenue. By 2018, concentration levels will be decreasing due to fierce competition and the entrance of new participants in the market.

Source: Frost & Sullivan

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Executive Summary—Market Engineering Measurements

Compound Annual Growth Rate

31.7%

(CAGR, 2013–2018)

Market Concentration

40.0%(% of market share held by

top 3 companies)

Market Stage

Growth

Market Revenue

$243.6 M

(2013)

Market Size for Last Year of Study Period

$965.0 M

(2018)

Base Year Market Growth Rate

23.8%

Customer Price Sensitivity

5

(scale:1 [Low] to 10 [High])

Degree of Technical Change

8

(scale:1 [Low] to 10 [High])

Big Data Market: Brazil, 2013

Note: All figures are rounded. The base year is 2013. Source: Frost & Sullivan

Stable IncreasingDecreasing

Market Overview

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Executive Summary—CEO’s Perspective

2Banks and telecoms are the most demanding verticals in this market.

3Retail and government are high-demand verticals that companies will be betting on in the coming years.

4Customer churn and fraud analysis drive the demand for Big Data projects.

5Fault of knowledge is the biggest market restraint. Unclear ROI is also a major concern.

1High growth rates will continue by 2018, growing in the healthy double-digit range.

Source: Frost & Sullivan

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Market Overview

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Market Overview

• In 2012, a gold rush to Big Data started in companies’ business areas. Marketing resources, especially, wanted to use Big Data to achieve better results, but most did not know where to begin.

• The year 2013 marked the path to Big Data, in which clients began to understand how they can start investing. Proof of content was requested, and consulting services were contracted.

o Due to the complexity of these projects, some participants are doing partial deliverables and measuring the benefits before moving on.

• Social-network analysis also began to be discussed more often, using tools to connect companies’ customers to their Web pages or to monitor their brands in these networks.

• Due to the increase in data and time-to-market pressure, companies invested in in-memory computing solutions to enable real-time analytics and become more competitive in the market.

• Some verticals can be highlighted in this market, such as finance, especially doing fraud-analysis projects; telecom, working on projects to reduce their churn rate; and retailers, personalizing their physical stores and Web sites according to each customer.

• In summary, 2013 has been an interesting year for Big Data in Brazil, with $243.6 million in revenue and an expectation that this market will grow even more in the upcoming years.

Source: Frost & Sullivan

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External Challenges: Drivers and Restraints

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Drivers and Restraints

Big Data Market: Key Market Drivers and Restraints, Brazil, 2014–2018

No idea how to use Big Data H H M

Unclear ROI H H M

Big Data IT skills H M M

Project complexity H M M

1–2 Years 3–4 Years 5th Year

High data volume complicates company processes H H H

Expansion of mobile devices and social media H H H

Enabling churn reduction H H H

Competitive advantage H H M

Impact: H High M Medium L LowNote: Drivers and Restraints are ranked in order of impact. Source: Frost & Sullivan

Mar

ket

Dri

vers

Mar

ket

Res

trai

nts

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Drivers Explained

High Data Volume Complicates Company Processes

• Data-volume growth is so high that some routine and important processes from the

companies now take too much time to run with traditional solutions. Companies are

pursuing new solutions for running their processes faster and integrating the data.

Expansion of Mobile Devices and Social Media

• Cloud computing, mobility, social media, and Big Data are changing the way companies

do business. New and more robust measures are needed by companies to

accommodate their quickly changing needs for data information.

Source: Frost & Sullivan

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Drivers Explained (continued)

Enabling Churn Reduction

• Brazilian companies see in Big Data projects the possibility for increasing their number

of loyal clients, understanding clients’ main complaints, and personalizing their offers

according to the client data.

Competitive Advantage

• Big Data provides a competitive advantage because it enables the accessing of relevant

information that is not easily found or analyzed. Solutions structured to process Big Data

also allow companies to act predictively.

Source: Frost & Sullivan

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Restraints Explained

No Idea How To Use Big Data

• Companies may have already heard about Big Data, but actually most of them still do

not know where and how to begin using it to their benefit. The Brazilian market is still

discussing and studying what Big Data really is.

Unclear ROI

• Presently, Brazilian companies have difficulty understanding the benefits and ROI of a

Big Data project. Service providers’ current offers are not clear enough to show clients

an understandable ROI.

Source: Frost & Sullivan

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Restraints Explained (continued)

Big Data IT Skills

• Most Big Data solutions are not easy to use and require the expertise of specialized IT

resources. Unfortunately, in Brazil, there are very few experts in this market. Service

providers are working with universities to prepare new experts while simultaneously

working to make the solutions more user friendly.

Project Complexity

• Most clients and prospects see Big Data projects as complex due to all of the effort that

is needed to understand the clients’ real needs, integrate all of the data, and implement

the solutions. Service providers have begun to break the projects into several

deliverables to reduce this trepidation among their clients.

Source: Frost & Sullivan

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The Last Word

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The Last Word—Predictions

2The medium-sized market will gain importance in 2014 and 2015, with vendors focusing on creating Big Data offers, especially to this segment.

3Government investments in Big Data will grow exponentially due to projects that will bring more agility, security, and transparency to governmental information.

1The Big Data market is maturing as a result the media excitement. In the 2nd semester of 2014, the market will start to see significant growth.

Source: Frost & Sullivan

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