HONG KONG -- Analytics provider IHS Markit calculates that its growth will stem from the rising need to combine financial information with "alternative" types of data as companies seek to make strategic decisions or fulfill regulatory requirements, the president of the London-based business says.
"All our divisions are being driven by the need to use data to solve problems," said Lance Uggla, who also serves as chief operating officer of the Nasdaq-listed company.
Nonfinancial data can help detect fraud or identify irregular trading patterns, Uggla said. "All of these [financial technology] and [regulatory technology] type solutions, at their hearts, [are] driven off data," he said.
Transportation logged the fastest growth in recurring fixed revenue among IHS Markit's four business segments, accelerating to 11% from 9% for the quarter ended in August. This segment covers data being used in tracking vessels, airspace, defense and the automotive industry.
"If transportation continues to grow at high single digits, [it] over time will potentially be the largest division," said Uggla, the company's Canadian chief who will become CEO in January. "I see that use of data is growing -- the same in energy."
The financial services segment slowed by 1 percentage point to 3%. That division and transportation each accounted for 27% of the company's recurring fixed revenue, which totaled $638 million for the third quarter.
Uggla attributed the analytics provider's growth in Asia to outward-looking Chinese companies that are investing in ports and refineries globally while seeking to become industry leaders in clean energy and electric cars. Asia also provides the fastest growth for IHS.
"We have had our office on the ground in China since the 1990s, so we've been working with the Chinese corporates, the energy markets, to help them go abroad and navigate" economic and political risks in challenging markets that are new to them, Uggla said. He suggested the next opportunity will come from other power companies in China that are keen to expand internationally under President Xi Jinping's Belt and Road Initiative.
Bank of America Merrill Lynch estimates the global big data market will be worth as much as $210 billion by 2020, as up to 50 billion connected devices will be deployed by then. Such deployment could double the amount of available data every two to three years until 2035.
That potential increasingly spurs digital or technology companies to position themselves as data businesses, making them possible competitors for IHS Markit.
"I do see them as information and data companies as well, except that their starting life is creating technology that creates content. My starting life is creating content and using technology to create products and services," Uggla said, referring to Facebook, Google, Amazon, Baidu, Alibaba Group Holding, Tencent Holdings and others.
"Amazon might compete in some areas in the future, but at the same time they also might be a great partner," he said. "We're already partnered with some of our data sets, with the likes of Facebook, Google, to develop targeted advertising strategies in the automotive space, work with the big [original equipment manufacturers]."
IHS Markit was born of the merger between Colorado-based IHS and London-based Markit in July 2016. The American precursor tracks data in specialized industries including aerospace, defense, automotive, chemical, energy, maritime and technology, while the British counterpart is most famous for compiling the monthly purchasing managers' index for many countries as well as the credit default swap indexes.
"Both companies have a shared vision to apply more technology to the data set so they can produce better products -- faster, quicker, easier to distribute," Uggla said.
The president noted that his company will seek organic growth in the near term as opposed to acquisitions.
"Leveraging a combination of computing science with content around analytics and predictive analytics will drive a lot of our new products as we look forward in the future," he said.