As per the Nasscom estimates, total revenue of the IT-IT enabled services (ITES) industry is expected to be $47.8 billion this year up from $37.4 billion last year. Software and services export continues to grow at around 30% and has reached $31.4 billion. The contribution of IT-ITES industry to country’s GDP grew to 5.4% from 4.7% of last year, thus providing employment to more than 1.6 million of our youth.
However, the US credit crisis and appreciating rupee are posing strong challenges to the Indian IT industry. The once darling of investors, the IT companies have lost their sheen in the stock market. Is the Indian IT industry at the inflexion point of decreasing growth rate? We point out below four major transitions that are reshaping the Indian IT-ITES landscape.
First is the growth in domestic demand for IT-ITES services which has increased to $5.4 billion. While traditionally Indian IT bigwigs such as Infosys, Wipro and TCS have concentrated on the US and European market for their businesses, the multinationals, notably IBM has made significant inroads in the domestic market.
IBM today has one-fifth of its workforce in India accounting for the largest employee base next only to the US. Not only has IBM increased headcount, but also received large multi-million dollar orders from domestic clients. Though most of the organisations in India still keep their IT operations in-house, the advantages of outsourcing to service providers are being actively considered. Bharti and Vodafone alone have reverse outsourced the IT operations to IBM for more than $2.5 billion.
Even the government contracts such as the prestigious IT infrastructure modernisation project of the income-tax department went to IBM. This has prompted Indian IT companies to tap the domestic market.
Recently Wipro won a nine-year business transformation contract from Aircel. In tune with this trend in IT services, the domestic ITES/BPO sector has also shown an impressive growth, reaching about $1.6 billion and is expected to reach $11 billion by 2012. Article compiled here : |
