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Four traditional industry verticals -- automotive, banking and finance, chemicals and FMCG -- are tipped to drive the $ 10.7m business intelligence (BI) application software market in India over the next four years. Faced with huge databases and a growing focus on customer-oriented strategies, these industries have become the first adopters of BI, still a relatively new concept in the country.

The BI market in India is projected to generate $ 10.7 million in revenues by the end of '02, going on to touch $30.4 million in '05, according to a recent Frost & Sullivan study on the segment. However, the market is still in its nascent stage and is likely to witness a surge in growth during the period 2002-'04, says the study.

BI refers to an umbrella term for a set of tools and applications that allow enterprises to gather, organise, distribute and act on critical business information. The use of BI helps the organisation to find out which their top-selling products are, who their most loyal customers are, which businesses are performing the best and which need improvement, the efficiency of their promotional campaigns and how exactly this is reflected in sales.

In the Indian BI application market, SAS has emerged as the market leader, accounting for 22.5 per cent market share, according to the study.

According to Alok Shende, manager technology practice, Frost & Sullivan India, the demand for BI in India is currently being driven by multinationals and large enterprises. "The solution seems to have gained more acceptance in sectors where customers play a pivotal role in the future of the company," said Mr Shende.

For instance, 50 per cent of the automotive and banking and finance sectors have adopted the knowledge management BI module. The highest penetration of data warehousing and data mining tools has been in the chemicals sector, which also signifies that chemicals companies are among the most mature in using these solutions.

The knowledge driven pharma industry is also emerging as a high user. Companies such as Novartis, Pfizer and Glaxo Smithkline Beecham have implemented SAS BI solutions in India.

Despite the future market potential, the lack of understanding of BI across organizations has been one of the major restraints to its growth here.

Companies have adopted the solution in modules, but full-scale implementation, which includes data warehousing, knowledge management and business performance management. Indian enterprises predominantly adopt a 'wait and watch' policy and place high importance on the success rate of the solution.