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IT: domestic growth will balance global slowdown

BANGALORE: Increased growth momentum in the domestic market, 24 per cent over last year, will balance the expected decline in global markets for India’s IT and IT-enabled Sservices (ITeS) sectors, according to an industry forecast for 2008 from IDC, market intelligence provider.

India’s IT and ITeS market is set to cross Rs. 1,10,000 crore and the ‘digital experience’ for Indian consumers will enter the next phase, characterised by fixed mobile convergence, resulting in more competition in the telecom sector; integrated service providers will gain the edge, IDC anticipates.

“We expect a significant transition in the Indian IT industry, leveraging the infrastructure and technical capability built-up so far. Higher demand for more sophisiticated enterprise and consumer services will drive this trend,” said Kapil Dev Singh, Country Manager, IDC India.

Fixed line broadband may emerge the favoured choice among Indian consumers, though mobile Internet may continue to grow as an alternative.

During the first half of 2008, major operators may offer broadband up to 8 Mbps to consumers in the metros and a few other key cities.

At the global level, IDC expects India’s revenues to grow the fastest among all BRIC (Brazil, Russia, India, China) countries, at least till 2011. In the domestic market, enterprises have been early adapters of consolidation and ‘virtualisation’ and the share of virtualised servers may double from the present 22 per cent to 45 per cent in 2008.

The positive experience in other sectors may impact others such as manufacturing, BFSI (banking, financial services and insurance) and aviation, IDC predicts.

“IT solutions, in hardware, software and services, may change with fast-maturing small and medium businesses as key drivers,” Mr. Singh said. In international markets, the growth is likely to lower, around 5.5-6 per cent, down from 7 per cent in 2007.

IDC’s global research team feels that the earliest impact from economic downturns in the West was fastest in the hardware sector, followed by software sales in the next one or two quarters and more gradually, by IT service providers.

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