Indian IT outsourcing: IT's back in the black

31st December 2009
Indian IT outsourcing: IT's back in the black
Lights blaze for a second shift at the Technopark campus of travel and logistics solutions leader, IBS

Not quite the galloping growth of the years before 2008; but India's IT and IT enabled services business is slowly getting back into profitability. 2010 should see the domestic IT-ITeS market grow 15% in 2010 as the economy shows signs of recovery, says IDC. The year-end India Domestic ICT Market Predictions 2010 report by leading ICT market intelligence firm IDC India suggests that Domestic IT-ITeS market will revive in 2010 to grow at 15%, after a moderate growth of 5.4% in  2009.
According to IDC the four major trends in 2010 are:
- Transformation of the consumer IT space: the metamorphosis of ‘Consumer 1.0’ to ‘Consumer 2.0.
- ‘Consolidation’ and ‘Leveraging’ of IT and telecommunications infrastructure built in Growth Phase 1.0 to realise greater business efficiencies and launch innovative product / solution offerings for their end-customers development of new business models in Growth Phase 2.0 by both large and mid-size business enterprises.
- Increased adoption and acceptance of ‘game changing’ technologies such as x-as-a-Service (where ‘x’ could stand for Software, Infrastructure or Platform) delivered through the Cloud and Green Tech and 3G networks.
- Government intervention in providing economic stimulus to lagging end-use sectors, most notably through the launch of large scale public infrastructure projects to unlock hitherto untapped market potential.
IDC expects the annual growth rate of the India domestic IT-ITeS market growth rate to reduce down from an average of 24% recorded during 2003-08 (Growth Phase 1.0) to 14.6% over the next five-years to 2013 (Growth Phase 2.0). This relatively slower growth, albeit on a higher base, will witness enhanced competition leading to a rapidly changing strategy and continuous market re-alignment on the part of ICT vendors and suppliers.

2010 Domestic IT-ITeS Market to grow at 15% (against 5.4% in 2009) IDC expects the combined India domestic IT-ITeS market to grow at 15.0% in 2010 to achieve revenues of Rs. 1,20,666 crore compared to Rs 1,04,906 crore in 2009.
The domestic IT market is expected to grow at 13.0% in 2010 to touch Rs. 1,07,655 crore, while the domestic ITeS market is expected to post revenues of Rs. 13,011 crore, a growth of 35.0 %.
The combined India domestic IT and IT-enabled Services grew by 5.4% in 2009 to touch revenue of Rs. 1,04,906 crore compared to Rs. 99,654 crore in 2008).
( Rs One crore is Rs 10 million that is approx $ 200,000 )

"The key business concerns through 2010, will be business model innovation, improved productivity, faster return on investment and cost savings,”said Mr. Kapil Dev Singh, Country Manager, IDC India.
Jan 1 2010