Tuesday, May 10, 2011

"India Information Technology Report Q2 2011" now available at Fast Market Research

PRLog (Press Release)– May 10, 2011– In 2011, India's potentially vast IT market should consolidate its strong performance in 2010 thanks to an improving economy and consumer sentiment. Computer shipments were up by around 30% in 2010 compared with 2009, and although growth is expected to moderate in 2011 due to base effects, it should remain comfortably in double-digits.

The Indian addressable market for IT products and services is projected to increase from US$18.9bn in 2010 to US$41.2bn by 2015. Business IT spending also picked up in 2010, led by demand from SMEs, although spending in some key IT segments was relatively flat. In 2011, government procurement should also grow robustly, along with opportunities in healthcare, education, telecoms and financial services.

------------------------------------------------- -----------Full Report Details at - http://www.fastmr.com/prod/152689_india_information_tech ... ------------------------------------------------------------

The long-term potential of India's IT market is plain: less than 3% of people in India own a computer (about one-fifth of the level in China), meaning particular potential in the lower end product range. However, realisation of this long-term growth potential depends on fundamental drivers such as raising India's low computer penetration, rising incomes, falling computer prices and the government's ambitions to connect the vast rural areas to the outside world.

Industry Developments

According to data from Indian IT association Nasscom, India's technology and business services revenues accounted for 6.1% of GDP in fiscal 2010, up from 1.2% in 1998. This was despite the fact that earlier Nasscom had downgraded its growth projections for the domestic IT sector as a result of the global economic crisis. IT and business process outsourcing (BPO) exports grew only 5.5% in 2010, due mainly to IT budget cutbacks by clients in Western countries.

The government's five-year e-government plan was assigned a nominal budget of INR23,000 crore through 2011. The budget covered 26 core projects including agriculture, income tax, pensions, land records and passports. However, at the start of 2010, many of these projects had yet to be awarded, or even tendered.

A key driver of informatisation in the government sector is likely to be the e-ID card programme, It has been estimated that the total cost of the project could be at least INR1.5bn lakh crore. The project received a boost in 2010 when a court suggested that national ID cards should be made mandatory for all citizens.

Competitive Landscape

In 2010, HP and Dell continued remote control helicopter to compete for top spot in the combined Indian PC market, with Dell enjoying a growing share of desktop sales, while Taiwanese vendor Acer was ranked in third place overall. Dell announced its intention to go after the Education PC segment, particularly the private schools market. Meanwhile, Acer forecast that it would achieve 30% volume growth in the Indian market in 2010.

A significant opportunity will be created by demand from Indian businesses and government agencies for help to utilise cloud computing. There are already more than 50 cloud computing service providers working in the Indian market. Indian internet services providers (ISPs) and data centre service providers such as Bharti Airtel, Sify, Trimax, and NetMagic are investing in bandwidth and facilities to support new cloud service offerings.

Meanwhile, Indian IT companies like Wipro, Infosys, TCS, HCL and Mahindra Satyam are developing cloud computing applications and solutions for verticals ranging from financial services and banking to manufacturing.

Computer Sales

BMI estimates the Indian addressable market for PCs (including notebooks and accessories) at around US$7.7bn in 2011, up from US$6.8bn last year. The addressable market is expected to grow around 17% in 2011, although this represents a deceleration on 2010, thanks largely to base effects. The main driver in 2010 was once again the consumer notebook segment.

BMI predicts the market will grow at a compound annual growth rate (CAGR) of 19% between 2011 and 2015, with unit sales resuming strong growth. Growing PC penetration in lower-tier cities should help to maintain demand for some time to come. Business demand could receive a lift in 2011 from tenders deferred as a result of the economic situation and migrations to Microsoft's new Windows 7 operating system could also help sustain a new cycle of hardware upgrades.

Software

The Indian software market CAGR for 2011-2015 is projected at 25%. In 2010, vendors reported that enterprise IT spending was trending upwards, with stronger demand for technology from the small and medium-sized enterprise (SME) segment. Despite the recent economic headwinds, the local market is likely to grow strongly in 2010, with more projects from key IT-spending verticals such as financial services, telecoms and consumer goods.

In recent years, the SME market in India for hardware deployment has grown, and this has resulted in an increasing opportunity in this segment for applications. More demand for solutions and hardware now comes from second- and third-tier cities. Industry reforms and privatisations, government regulations and new global competition have encouraged SMEs to use more technology. Recently, there has been an increased enthusiasm for hosted applications and software-as-a-service (SaaS), which improved telecoms infrastructure makes more feasible.

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India's IT services market is estimated at around US$7.1bn in 2011 and is projected to grow to US$16.9bn in 2015.The Indian market has traditionally been low margin, with India's IT majors such as Infosys, Wipro and TCS focusing most of their attention outside the domestic market.

Particularly following the US and global economic downturn, however, vendors are now more attuned to the growing size of the Indian IT services market opportunity.

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets.  BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly 1086274749  regional Monitors, and in-depth quarterly Business Forecast Reports.  Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports.  View more research from Business Monitor International at http://www.fastmr.com/catalog/publishers.aspx?pubid=1010

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