World Outlook not so good
The future does not look very bright for the export driven Indian IT industry as the world wide IT spending is expected to decline with a significant market downside risk. IDC predicts that in 2008, world wide IT market growth will be lower, at a moderate 5.5.-6% worldwide, down from 2007’s 6.9%. According to IDC’s Global Research Operation (GRO) team, the earliest impact from the economic downturns is felt historically, in the hard ware sector, with software impact lagging by one or two quarters and services impact more gradual.
Good Times are set to roll in for the domestic India IT sector and the market is expected to cross Rs 100,000crorein 2008,going by the projections made by IDC. The growth in the domestic IT market is just not fuelled by the more number of enterprises expanding their IT requirements but also increasing number of consumer’s getting into the digital space.
According to IDC, the domestic IT/ITes market revenue will touch Rs1, 10,000 crore in 2008 while sustaining the growth of 27% recorded in 2007. This would result into the market growing at 24% in 2008 over 2007. The year 2008 is likely to herald the beginning of the growth phase2.0 leveraging on the various opportunities arising out of the IT infrastructure built up so far.
“Growth Phase 2.0 will leverage the IT infrastructure and technical capability built up so far to offer new-age services to the Indian enterprises and consumers,” said Kapil Dev Singh, country manager, IDC India.
The consumer IT sector maturity is driven by the launch of new consumer internet, telecommunication services (fixed-mobile convergence, tele-presence, Web2.0 and social networking sites, online and mobile gaming, music and video downloads), as well as healthy growth in shipments of mobile handsets, consumer notebook PCs and accessories. The growth in IT retailing also underscores the ‘arrival’ of the consumer IT phenomenon in India.
IDC said that even as vendor reach out to new geographies (beyond Bric) for growth, India would continue to remain the centre of attraction. As the Bric nations move towards IT maturity, vendors are scouting for new emerging geographies to maintain sustainable growth. IDC India expects India revenues to grow the fastest during 2006-2011 amongst all Bric nations even if the focus moves beyond the Bric countries.
India, currently contributes to about one fifth of the total Bric revenues. The web 2.0 Market in India is to take off in 2008 with shakeouts and a possible string of consolidations to follow. The entry of big players in the market will lead to increased spend on marketing and promotions.
