Indian IT market to cross Rs 1 lakh crore mark in 2008

New Delhi, Jan 6: India's domestic IT/ITeS market revenue will touch Rs 1,10,000 crore in 2008 while sustaining the growth of 27 per cent recorded in 2007, a leading information technology research firm has predicted. This would result into the market growing at 24 per cent 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 country manager Kapil Dev Singh said. The company said even if vendors reach out to new places beyond BRIC(Brazil, Russia,India,China) 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.

It expected Indian revenues to grow the fastest during 2006-2011 among all BRIC nations even if the focus moves beyond these countries. India currently contributes to about one fifth of the total BRIC revenues, it added.

But IDC India said global IT spending growth will decline this year due to significant downslide in the US market. It predicted lower growth at a moderate 5.5-6 per cent, down from 2007's 6.9 per cent. The impact, it said, would be first felt by the hardware sector, followed by software and services.

Hardware growth is expected to decline by one point to 5.7 per cent, while it would be flat at 6.3 per cent in services, cool to 8.5 per cent in software.

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

The study said fixed-line broadband would emerge as a dominant trend in 2008,though mobile internet will continue to grow as an alternative access medium. It said in the first half of 2008, all major operators will be offering broadband up to 8 mbps to consumers in metros and some other key cities. Bandwidth-hungry applications like IPTV, online gaming and VoIP will ensure a healthy uptake of virtual home space builder(VHSB) in 2008 and beyond.

The IT research company said 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.

It said Web 2.0 market in India will take off this year with shakeouts and possible consolidations. With over 75 active Web 2.0 start-ups in 2007 and global heavyweights like Orkut, Wikipedia, YouTube and Frickr enjoying a mindshare of Indian users, the market is poised for a take-off in the second half of 2008. The entry of big players in the market will lead to increased spending on marketing and promotions.

IDC India said virtualisation will become mainstream this year as it gains wide-scale adoption. It estimated that the share of virtualised servers to double from the present 22 per cent to 45 per cent by 2008 end.

Riding on the success of server virtualisation, storage virtualisation is also coming of age in India. The success stories of virtualisation would have a positive impact on manufacturing and aviation this year, the study said.

Expecting fast-maturing small and medium business (SMB) segment to be a key driver of IT solutions (hardware + software + services), the study said 2008 will witness a major expansion of software-as-a-service (SaaS) as a way to accelerate SMB penetration and service oriented architecture (SOA) adoption.

UNI