Media & entertainment sector to grow at 27% until 2012

New Delhi: The IT market opportunity in media and entertainment (M&E) sector in India is estimated to grow at a CAGR of 27 percent during 2008-2012, said the latest research report from Springboard Research. Springboard's report, titled 'IT in the Indian Media & Entertainment Industry: Emerging Trends and Opportunities', forecasts that the annual growth will slow down to 23 percent in 2009 compared to 30 percent in 2008, but will pick up again in 2010.

Findings of this report are based on a survey of 122 CIOs from large and mid-size media and entertainment companies across India.

“Indian M&E companies are beginning to overhaul their IT infrastructure to grow in a competitive  industry, and to expand their horizons in terms of geography, as well as new delivery formats,” said Nilotpal Chakravarti, Senior Research Analyst-Vertical Markets, Springboard Research. “Their focus on new market opportunities- and the pivotal role technology plays in these emerging opportunities- has set the stage for growth in their IT investments,” Chakravarti added.

The Springboard report reveals that IT vendors like IBM, HP, SAP, and Microsoft contribute just eight percent of the total IT market share in the Indian M&E industry. On the other hand, 69 percent of survey respondents for this study said that they deployed and built their IT solutions in-house. The respondents also paid a heavy premium on vendors' capability to offer strong service and support, with 50 percent rating it as the primary factor when selecting an external vendor for their IT solution.

The report revealed that up to 46 percent of the total IT budget of media and entertainment companies surveyed was spent on software in 2008, majority of it being enterprise software. On the hardware side, storage solutions dominate spending with 37 percent of survey respondents planning to augment their existing storage capacity in the next 12 months. SAN and NAS are forecast to be prime storage investments with 53 percent and 27 percent of respondents indicating plans to buy these storage types in future.

It also indicates that although majority of M&E companies develop their systems in-house, local IT vendors have a sizeable foothold in the industry as they provide low-cost, industry-specific solutions, and their applications are customized to M&E industry segments. According to the survey respondents, IBM and HP lead the market in software and hardware categories respectively. The respondents nominate Wipro as the leader in IT Services category, while Cisco is the leader in networking equipment suppliers list. Other leading vendors in the M&E sector profiled in the study include Akamai, Autodesk, Microsoft, SAP and Siemens Information Systems (SISL).