Indian Information Technology Sector is poised for growth: Q3 Research Report from Research and Markets

Research and Markets, a renowned research publication group based out of Ireland published the Q3 report on Indian Information Technology Industry. As per the report, market for IT products and services in India is increasing US$19.7bn in 2010 to US$41.2bn by 2015. The Indian companies (both in government and private sector) are planning to up rate their IT infrastructure.  Report predicts a long term growth potential for IT industry in India mainly due to reasons like high income, low computer prices as well as the governments dream to connect the rural areas also to the external world. The article summarizes some of the key findings and analysis presented in the report.

IT industry Growth

According to the latest reports from the Nasscom, the average revenue from the technology and service areas in India was reported to be around 6.1%of GDP in the year 2010 when compared to the 1.2% of GDP in the year of 1998. The e-government plan introduced by the government of India covered areas of agriculture, pension funds, taxation and passports in the year of 2010. But at the beginning of the year of 2010 many of these projects were not even tendered. The government had planned to introduce the e-Id-card program which was regarded as the significant factor of informatisation in this sector. This project was further encouraged as a result of the courts suggestion of introducing national ID cards for all the citizens in the country in 2010.

Competition in IT sector heating up

There is stiff competition that is going on the Indian PC market. The major players in this market in the year of 2010 being the DELL and HP. Both the players are on the race to bag the top most position where in DELL was involved in the high desktop sales. Another major player is ACER which bagged the third position in this market.

The year of 2011, the Indian market has witnessed the launch of tablets as affordable device among the customers. Along with Indian players like Maxx and Beetel, giants like Apple are also aggressive with the expected launch of ipad2 soon. SAMSUNG a market giant has aimed around 40% of the Indian Market in 2011.

On the enterprise software front, US MNC ORACLE claims to secure around 7000 clients around the Indian private and public sector areas in various verticals. Cloud Computing is another significant area which is going to drive the potential new business opportunities in IT. Indian vendors like Infosys, TCS and Mahindra Satyam have tried to consolidate their position, but there has been some hit on the margins.

Overall, a growth rate of 14% is predicted for the Indian IT sector on an average. This is still high looking at other markets relatively.

Software and services market

The software market in India is projected to grow at 18% for the period of 2011-2015.  The IT spending from the enterprises is increasing on a large scale with strong emphasis on technology. The local market also has been growing with projects in different verticals such as financial services, telecoms, and consumer goods etc which deal in high IT spending. The government regulations and industrializations resulted in the SMEs focusing more on technology aspect. 

The IT majors in India have always focused outside the domestic market which resulted in low margin in this area. Due to the economic slowdown, vendors are more encouraged to invest in the Indian IT market which is developing. In the coming years the vendors will be investing in the various projects in the IT sector such as e-governance, modernization of Railways, ID cards etc.

Investment challenges

The major workforce of India is well educated. But still the Indian business scenario is overloaded with various government regulations. The foreign investments are limited to certain sectors only. The general recruitment and placement procedures remain dependent on the strict government rules. Some of the other major problems in this area are a large population of small scale producers, high tariff levied on imports and also poor power infrastructure.  Indian government has tried to introduce the concept which was applied in South East Asian countries called ‘special economic zones’ aimed at managing some of these challenges. Still the report says there is a long way to go as far as providing the right infrastructure impetus to the growth of the IT industry.

A must have report for IT strategists

This report from Research and Markets is quite comprehensive in addressing the challenges, business opportunities, drivers as well as forecasts for different segments in IT sector. Report also covers IT products and services space quite at equal standing. Hence this could be useful for IT strategists, research scholars and firms for devising IT strategies for the future.

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