Indian IT market to hit $71 billion in 2016

22-Jan-2016 #Digital India Source: India Inc

It can be seen as a sign of the Digital India campaign showing results that the general market consensus indicates that this year will mark a considerable hike in Indian IT spend.

After a fairly sluggish 2015, there are expectations of a 13.5 per cent increase as digital infrastructure becomes more embedded and companies see the value in embracing new technologies.

According to researchers Gartner Inc, India IT spend is forecast to hit $71 billion this year with spending on the Internet of Things (IoT) hardware alone to exceed $2.5 million every minute.

Amal Munglani, its research director, declared: “India will continue to be the fastest growing IT market for the second year in succession and will continue growing to total $85.28 billion by the end of 2019.”

He also forecasts India’s rise from being the third-largest IT market in the Asia-Pacific to the second-largest, after China, in the next three years.

So where do the opportunities lie? The Digital India initiative, MyGov citizen portal, the Self-Employment and Talent Utilisation (SETU) program for startups, Smart Cities – they will all come into play. Digital India is centred around three areas – digital infrastructure as a utility to every citizen, governance and services on demand, and digital empowerment of citizens. Overhauling the underlying core applications and infrastructure to support the breadth of digital initiatives will help boost spends on technology.

The government, according to analysts, spent $7 billion in 2015 on IT and $869 million was for software alone. With the impetus on implementation this year, and as more services are rolled out, it is expected that public sector spending on IT will increase significantly in 2016.

Demand for some services such as having an enabling cloud platform will be ubiquitous across the public and private sectors. Software as a service (SaaS) model will start to gain real scale which demonstrates the demand for cloud applications. Despite the continuous fall of transactional costs the volume of transactions should deliver reasonable returns for providers.

While we can see the last few years as laying the groundwork, the true impact and benefits of cloud-based services and the software as a service (SaaS) model will start paying off from this year. By 2017, about 90 per cent of Indian IT organisations are expected have open source software (OSS) embedded in their mission critical platforms, which translate into greater flexibility and eventual cost reduction.

The next phase of Digital Transformation would see the continuing rise of Cloud, integrated devices, algorithms, and IoT; and India will be at the forefront of this global change. Not just the IT industry, but businesses in India will become more digital as they compete in the global world – and this change is an opportunity for investors.

IT companies can not only sell to Indian corporates and consumers but also innovate in India to sell to the world.

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