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