Delhi has the highest IT market potential: IDC

According to IDC India's 'Opportunity Index', IT market potential is the highest in the city of Delhi. Formed out of its study titled 'MAP-IT 2000', the 'Opportunity Index' is defined as a function of two ratios:

The ratio of IT spending growth of a segment in a city to the total IT spending growth in that city, weighted by the spending potential in the city, and the ratio of IT spending growth of a segment in a city to the IT spending growth of that segment in the country weighted by IT spending potential of the whole segment in the country.

IDC believes that the growth rate when used alone takes into consideration a particular segment, whereas the Opportunity Index takes into account the potential of other segments as well, hence it is relative and not absolute. According to IDC, the Opportunity Index combined with the growth rate of the concerned city would enable identification of potential growth in various segments in that city.

IDC's Opportunity Index prioritizes the cities for investment and resource allocation. Delhi leads in overall IT market opportunity, followed by Mumbai, Hyderabad and Chennai. The spending pattern of Small and Medium sites in Delhi is significant as it grows from Rs 1,534 crore in 1999-00 to Rs 1,898 crore in 2000-01. With a 24 percent growth rate, it becomes imperative to understand this segment and the product/service portfolio herein.

Small and Medium sites promise the most opportunity in Delhi. Of the total 2.25 lakh PC owning sites, 1.5 lakh are Small and Medium sites. With the fact that 92 percent of the 'First-Time PC Buyer' sites also belong to this segment further substantiates the immense potential of Small and Medium sites in Delhi. With an existing base of 1.5 Lakh PCs and about another 1 lakh getting added in 2000-01, the Small and Medium sites in Delhi present a huge potential for related peripherals, datacom products, software and solutions.

Of the total IT outlay in the commercial segment in Delhi which is pegged close to Rs 3,750 crore in 1999-00, the Small and Medium sites segment commands 41 percent share. IT spending in Small and Medium sites in Delhi is dominated by hardware with around 64 percent of the total outlay.

The report also presents an ideal profile of a Small and Medium site in Delhi. A typical Small and Medium site in Delhi has employee strength of 11 persons, belongs to an organization that has average employee strength of 128 persons and has offices in seven different locations in the country. The majority of these Small and Medium sites would have their headquarters in Delhi and located in commercial area predominantly trading (49 percent) or offices (27 percent). The presence of Small and Medium sites is predominantly in services (35 percent), manufacturing (28 percent) or trading (26 percent).

A similar analysis done at a zonal level also brings forth that south zone which consists of Chennai, Bangalore, Hyderabad, Vizag, Coimbatore, Cochin and Madurai markets is the leader in terms of market opportunity and is slightly ahead of North (Delhi, Chandigarh, Ludhiana, Jaipur, Kanpur, Lucknow, Varanasi, Bhopal).