Domestic(India) IT Market trends.
Some of the encouraging trends of the domestic IT market are:
• Domestic IT market grew at 22.4% in 2010
• In 2011, IT and ITeS industry is expected to grow at 20%, with the domestic market
growing at 22.4% compared to the IT and ITeS export market growth of 18.9%
• E-governance is high on the agenda of Central govt. and most state governments.
• Business Models viz.PPP are beginning to be used in Government projects
• Greater focus on increasing competitiveness of SME segment through increased IT
adoption
• Innovative Business models like SaaS and SOA are being used by IT Firms for
MSMEs and niche markets
• Large Indian firms are outsourcing IT and ITES operations resulting in large
opportunities which are comparable to global deals in size.
• Transformational investments in IT increasing.
• IT infrastructure prices are showing a continuous downward trend.
• Household consumer across income segments and geographies is being exposed to
technology through mobile penetration, B2C applications (Railway reservation, e-
Chaupal, NSE, MCX, e-Seva etc)
• Increasing availability of funding options for entrepreneurs
India IT/ ITeS Industry Size (In Rs. Crore), 2007-12
A key barrier for increased IT penetration in the domestic market is the absence of active
demand in key segments and industries. While there is latent demand present in most
segments, ways and means need to be identified to trigger the latent demand and convert it
into active demand. Some key challenges which need to be addressed to accelerate the
growth of the domestic IT market are as follows:
• Pace of IT investment in e-Government initiatives
• IT spending among Indian businesses continues to trail US / UK benchmarks, 1.5 %
of annual revenue v/s 5.5 % of annual revenue
• IT usage pattern is focused on automating processes instead of enabling business
transformation
• IT penetration in many verticals significantly lags behind international benchmarks
(insurance, education, healthcare, travel)
• IT penetration in emerging companies is low with only 17 % of SME’ computerized
• Lack of products / solutions / services for emerging companies segment
• Household consumer usage of IT is low due to very few B2C applications
• Regulatory environment needs to incentivize IT consumption