Indian IT Market To Touch Rs 1,10,000 Crore In 2008

IDC (India) has predicted that the domestic IT/ITeS market revenue will touch
Rs 1,10,000 crore in 2008 while sustaining the growth of 27 percent in 2007.
This would result into the market growing at 24 percent in 2008 over 2007.

“By posting a substantial jump in the domestic IT/ITeS market since 2002, the
industry is now onto a new growth trajectory. IDC India expects a significant
transition in the Indian IT market as part of the Growth Phase 2.0,” said Kapil
Dev Singh, Country Manager, IDC India.

Growth Phase 2.0

The India domestic IT market will transform significantly with the existing
IT infrastructure evolving both in technology terms and depth of penetration.
Higher demand for sophisticated enterprise and consumer services will drive this
trend as the India domestic IT market 'comes of age'.

The consumer IT sector maturity is driven by the launch of new consumer
Internet, telecommunication services, as well as healthy growth in shipments of
mobile handsets, consumer notebook PCs and accessories. Even as vendors reach
out to new geographies (beyond Brazil, Russia, India and China or BRIC) for
growth, India would continue to remain the center of attraction. IDC India
expects India revenues to grow the fastest during 2006-2011 amongst all BRIC
nations.

Virtualization

Virtualization will become mainstream in 2008 as it gains wide-scale
adoption. IDC India estimates the share of virtualized servers to double from
the present 22 percent to 45 percent by 2008-end. IDC said uptime, availability
and performance management of infrastructure and applica­tions to be at the core
of innovation. Delivery mechanisms will witness significant change with both
tier-1 and 2 managed services providers setting up more Network Operation
Centers (NOCs) and Security Operation Centers (SOCs) to adhere to stringent QoS
(Quality of Service) and SLAs (Service Level Agreements) with initial response
times.

Managed services providers will drive the next level of innovation by
providing services delivery based on ITSM (IT Services Management) and ITIL (IT
Infrastructure Library) frameworks. These frameworks, coupled with the reduction
of onsite staff will help to cut costs and lead to optimization of uptime,
availability and performance of enterprise IT infrastructure and applications.

IDC said fixed-line broadband would emerge as a favored choice in 2008,
though mobile Internet will continue to grow as an alternative Internet access
medium.

In the first half of 2008, all major operators will be offering broadband up
to 8Mbps to consumers in metros and some other key cities. Bandwidth-hungry
applications like IPTV, Online Gaming and VoIP will ensure a healthy uptake of
VHSB in 2008 and beyond.

Fixed mobile convergence (FMC) will signal the onset of a new battle in the
Indian telecom sector. Integrated service providers will gain edge; the stage
will also be set for a significant onset of unified communications (UC)
services.

Social networking

IDC said that the Web 2.0 market in India to take off in 2008. This will
lead to increased user awareness and participation, something that will benefit
and accelerate the overall Web 2.0 market in India. While smaller players will
feel the pressure with big players foray into India market, the overall market
will benefit from an increased user awareness and participation.

IT solutions delivery will witness change in 2008 with pockets of success and
growing awareness setting the stage for wider market adoption. Fast-maturing
Small and Medium Business (SMB) segment will be a key driver. IDC added that
2008 would witness a major expansion of Software-as-a-Service (SaaS) as a way to
accelerate SMB penetration and Service Oriented Architecture (SOA) adoption. IDC
predicted that in 2008, worldwide IT market growth will be lower, at a moderate
5.5-6 percent worldwide, down from 2007's 6.9 percent.

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