IT has been never so good for the vendors of business intelligence (BI) solutions in the Indian market. An enormous data explosion, primarily due to the booming services sector, and implementation of information technology in various government departments, has made BI solution vendors bullish on the domestic market.

BI is an umbrella term for a set of tools and applications that can help decision makers in companies gather, organise, analyse and act on critical business information. BI is seen as one of the high-growth areas in corporate software spending as it gives companies a detailed view of their operational data and helps them to derive more value from the data present in the system. It also helps them to work out important trends, such as buying and spending habits, that could help them evolve a more effective business strategy.

The BI sector in India is coming out of infancy and is on the threshold of a rapid growth, says Alok Shende, analyst at Frost and Sullivan.

The adoption of BI is gaining momentum as the services sector matures and clocks growth at a faster pace, he says.

The service industry, which tries to pre-empt the market with futuristic service offerings even before the customers need such solutions, could be the biggest beneficiary of BI. Service segments such as banking, telecom, insurance and call centre companies are growing at a rapid pace in India. BI provides these service segments with a holistic view of the complete customer lifecycle, which can, in turn, be manipulated to pre-empt demand, says Shende.

BI vendors operating in India include SAS, NCR, Teradata, Microsoft, Oracle, IBM and SAP. The BI market in India, estimated at $17 million in 2003, is set to touch $56 million by 2008, says Shende.

"We see a major opportunity there," says Vivek Gokarn, managing director, SAS India. SAS, which is already addressing industry verticals such as banking, financial services and insurance (BFSI), telecom, IT and IT-enabled services (ITES), pharmaceuticals and R&D, sees the Government emerging as the biggest spender on BI over the next few years.

"The Government sector is clearly a dark horse," says Gokarn, adding, "Once they start buying, they'll sweep the market."

Gokarn believes the use of IT applications in various functions of the Government is generating a lot of data.

And BI tools could help in harnessing this data effectively to implement various programmes.

Atul Sareen, Sales Director, BFSI and Technology, SAP India Pvt Ltd, says companies that went in for traditional business software such as enterprise resource planning (ERP), customer relationship management (CRM) and supply chain management (SCM) are no longer satisfied with the operational data generated by these applications.

The analytical part has become very critical in the context of enterprise applications.

Customers are asking for analytical reports on their operational data, which could be generated by BI tools, he says.Besides the ERP and CRM space, SAP claims a significant market share in the BI arena too.

BI is part of SAP's Netweaver technology stack and is an integral part of the `My SAP' ERP suite.

SAP is bullish on the Indian market for its BI tools and expects to target its existing customer base of ERP software users, and also new customers, says Sareen.

Shende, meanwhile, sees upcoming technologies such as RFID (Radio Frequency Identification) and regulatory norms and anti-money laundering initiatives as new drivers for adoption of BI tools.