Dynamic IT to drive domestic IT market

India market will grow 19 percent over 2005 to retain the 'fastest growing IT
market in AP region' crown

IDC today
predicted that the India domestic IT market will continue its growth in 2006 and
will keep 'the fastest growing IT market in AP region' crown intact. The
domestic IT market, according to IDC, is estimated to grow 19 percent over 2005
in the coming year.

“The India domestic IT
market is into a growth phase and 2005 witnessed huge trac-tion. Coming out of a
slow-down in 2003, the industry entered the next business cycle showing
consistent growth in 2004 and 2005. IDC predicts the growth story to continue in
2006 keeping 'the fastest growing IT market in AP region' crown for India
intact,” IDC said in a statement.

“In 2003, the market was
just out of a slowdown and it was a phase when strategic choices were made and
trends were at the tipping point. 2004 and beyond was predicted to be a period
of operationalizing these strategic decisions and trends were predicted to enter
the mainstream. Year 2006 will see some of these key trends witnessing further
traction and will be governed by the underlying theses of mobility, convergence
and infrastruc-ture management”, commen-ted Kapil Dev Singh, Country Manager,
IDC (India) Ltd.

“As per IDC's 2004 and
2005 predictions, the industry con-vergence, consolidation and realignment was
around two themes-dynamic IT in the enterprise space and the adv-ent and
increasing prolife-ration of digital devices in the consumer space. These the-mes
will further get defined and enhanced with increasing penetration of IT in
house-holds and growing depth in the enterprise segment,” Singh added.

He further stated, “The
eco-system in terms of PC adop-tion, broadband usage and increasing relevance of
IT to small enterprises will fuel gro-wth and increasing integration of IT with
business in enterprises will drive depth.”

According to IDC, the India
market is expected to grow 19 percent, with Philippines estimated to grow 14
percent. China is expected to grow 12 percent with Malaysia and Thailand
estimated to register eight percent and six percent growth respectively.

The major growth in India
will come from areas such as hardware, software and IT Services. The
contribution from each these areas in revenue terms are as below:

Hardware

WLAN Equipment (94 percent), Digicams (70 percent), IP Phones (50 percent),
IP-PBX Systems (43 percent), Smart Handheld Devices or SHDs (30 percent), Inkjet
MFDs (21 percent), and Notebook PCs (20 percent)

Software

Application Life Cycle Management Software (32 percent), Security Software
(29 percent), Content Applications (24 percent), BI Software (24 percent),
System Management Software (20 percent), Net-work Management Software (20
percent), Information and Data Management Software (20 percent)

IT Services

Application Management (32 percent), Software Dep-loyment and Support
Services (29 percent), Network Consul-ting and Integration Services (24
percent), IS Outsourcing (23 percent)

IDC also said that the
worldwide dynamic IT trends were rubbing off on Indian enterprises, but the
focus will continue on the infrastructure front in 2006.

“Dynamic IT is the play
between business and IT infrastructure. With growing need for IT infrastructure
to respond 'on demand' to business needs, enterprises worldwide are spending
on automating IT management and operations and creating business applications
which can be changed rapidly with need.

Though, this trend is
rele-vant for an Indian enterprise as well, the focus in 2006 is going to remain
on the IT management automation and operations stack,” IDC said.

On the penetration front, IDC
pointed out that a lot is happening from the ecosystem perspective-emergence
of broadband, availability of low cost PCs, affordable mobile phones and digital
cameras, increasing relevance of IT to users etc. The prediction is that the
ecosystem will get more robust in 2006, but the boom is real adoption will
happen beyond 2006.

“The worldwide IT industry
will grow at a moderate rate of 5.5 percent in 2006 and will put pressure on IT
suppliers to show courage and to take some chances to drive higher long-term
growth for themsel-ves and the overall industry. In 2006, it will be important-
particularly for industry lead-ers to think creatively about new product and
service offer-ings, new business models, and new type of industry relat-ionships
and communities.

The IT spending in the AP
(excluding Japan) will grow by nine percent in 2006 and reach USD 112
billion,” IDC predicted.

It also said that in 2006, IT
and business services vendors will continue to see major market changes,
including a dramatic shift to more business process outsourcing, an increase in
the number of players, and a reduction in total deal value.

These developments reflect increased competition and
expansion in the marketplace and are continuing to put pressure on traditional
outsourcers to alter their business models in order to successfully compete in
the coming years- to include newer service capabilities, involve different
ecosystems of partnerships, target “non-IT” opportunities, and seek new
customers in the SME and consumer spaces as well as emerging markets.

CyberMedia News, New
Delhi, Dec 29