IT Market To Touch $50bn By 2012

IDC India, at the 21st annual briefing session for the ICT
industry-Directions09, announced projections for the IT and ITeS market. The
report stated that the India domestic IT and ITeS market is expected to cross
the Rs 2,00,000 crore ($50 billion) mark in 2012, compared to Rs 90,014 crore
recorded in 2007. This translates into a CAGR of 18.4 percent in the five-year
period. Together with IT and ITeS exports revenue of Rs 3,20,278 crore, the
total IT and ITeS industry size will grow to Rs 5,29,976 crore ($132 billion) by
2012, representing a CAGR of 16.5 percent.

Sharing the IT and ITeS domestic and exports market projections for
2008-2012, Kapil Dev Singh, Country Manager-India, IDC said, “The domestic IT
and ITeS industry CAGR of 18.4 percent (during 2008-12) is expected on the back
of a robust growth of the past five years (2003-2007). We expect the industry to
achieve this by offering innovative services to the evolving domestic buyers,
we've called Consumer 2.0.”

IT market

The Indian IT and ITeS industry grew to Rs 2,46,609 crore in CY 2007, up
from Rs 2,01,413 crore in 2006, representing a growth of 22.4 percent. Of the
total industry size of Rs 2,46,609 crore, the domestic IT and ITeS market
contributed Rs 90,014 crore, while the remaining Rs 1,56,594 crore was
contributed by the IT and ITeS exports segment. In 2007, IT services (excluding
ITeS) exports continued to be the biggest segment at Rs 97,492 crore.

In 2008, IDC expects the IT and ITeS industry to grow at 20 percent, with the
domestic market growing at 22.4 percent, compared to the IT and ITeS export
market growth of 18.9 percent. The overall industry is projected to be Rs
5,29,976 crore by end 2012, with the share of domestic IT and ITeS revenues
adding to 40 percent of the total, compared to the current 37 percent.

The IT and ITeS exports market is likely to more than double to Rs 3,20,278
crore in 2012 from Rs 1,56,594 crore in 2007. In 2008, the IT and ITeS exports
segment is expected to clock a growth of 20.4 percent to touch Rs 1,86,142 crore.

“IDC believes that today's connected consumer is using many more converged
devices and looking for relevant content and services. We expect this trend to
continue, with the addition of newer dimensions, so as to permeate to the mid
and lower-end of the pyramid by 2012,” Singh added.

India's packaged software and services market grew faster than the hardware
market, a trend that is likely to continue over the next five years. While
packaged software and services as a segment is projected to grow from Rs 29,104
crore in 2007 to Rs 73,101 crore in 2012, the hardware segment is expected to
grow from Rs 48,940 crore to Rs 96,558 crore in the six year period (2007 to
2012).

While the overall IT and ITeS industry is projected to grow at a CAGR of 16.5
percent in the next five years, the highest growth, a CAGR of 27.3 percent will
come from the domestic ITeS market, climbing three times from Rs 11,970 crore in
2007 to Rs 40,039 crore in 2012. The IT services exports market is likely to
report a lower CAGR of 13.8 percent.

Growth drivers

IDC India believes that Enterprise 2.0 is the next avatar of an enterprise
that is more open and more prone to adopting new technologies and business
practices. The other characteris­tics of Enterprise 2.0 will be the seamless
connect between the customers and business partners. This essentially means the
arrival of a new paradigm where information power shifts from a centralized
authority to the constituents of the extended enterprise.

The effect on the market landscape will be in the suppliers aligning to the
new reality of Enterprise 2.0 in order to enable their organizations to evolve
from the current Enterprise 1.0 stage. Most importantly, the opportunity lies in
leveraging the existing infrastructure as opposed to the technology
infrastructure build-up and consolidation witnessed in the Enterprise 1.0 phase.

DQC News Bureau