New Delhi / Bangalore, December 31, 2009 - Domestic IT-ITeS market will revive in 2010 to grow at 15%, after a moderate growth of 5.4% in 2009. The year-end India Domestic ICT Market Top 10 Predictions 2010 report by leading ICT market intelligence firm IDC India suggests that important structural changes, brought about by the impact of economic slowdown will accelerate industry transformation towards a new ‘market order’.

This new phase of market growth and development, termed as ‘Growth Phase 2.0’ is evolving along trends that are quite different from the earlier phase, Growth Phase 1.0 (2003-08), during which the domestic market witnessed unprecedented growth, almost tripling the market size from Rs. 34,000 crore in 2003 to Rs. 99,564 crore in 2008, a CAGR of 24.0%.

According to IDC the four major trends in 2010 are:

• Transformation of the consumer IT space: the metamorphosis of ‘Consumer 1.0’ to ‘Consumer 2.0’
• ‘Consolidation’ and ‘Leveraging’ of IT and telecommunications infrastructure built in Growth Phase 1.0 to realise greater business efficiencies and launch innovative product / solution offerings for their end-customers development of new business models in Growth Phase 2.0 by both large and mid-size business enterprises
• Increased adoption and acceptance of ‘game changing’ technologies such as x-as-a-Service (where ‘x’ could stand for Software, Infrastructure or Platform) delivered through the Cloud and Green Tech and 3G/BWA telecommunications networks
• Government intervention in providing economic stimulus to lagging end-use sectors, most notably through the launch of large scale public infrastructure projects to unlock hitherto untapped market potential

Fig 1: India Domestic IT-ITeS Market Transformation: Timeline 2003-2013

Growth Phase 2.0, which started in 2009, will be built on the back of innovative services and solutions sought by consumers and enterprises alike. The technology behind these services—infrastructure, applications and connectivity—will need to orchestrate and re-orient completely in order to support their mass adoption.

IDC expects the annual growth rate of the India domestic IT-ITeS market growth rate to reduce down from an average of 24% recorded during 2003-08 (Growth Phase 1.0) to 14.6% over the next five-years to 2013 (Growth Phase 2.0). This relatively slower growth, albeit on a higher base, will witness enhanced competition leading to a rapidly changing strategy and continuous market re-alignment on the part of ICT vendors and suppliers.

"In 2010, changes that started last year will take concrete shape. As the economy recovers both consumers and enterprises would demand services and solutions that allow them to ‘do more with less’. The key business concerns through 2010, will be business model innovation, improved productivity, faster return on investment and cost savings,” said Mr. Kapil Dev Singh, Country Manager, IDC India.

“These business concerns will mean that IT implementations in 2010 and beyond will have to deal with two paradoxical realities – higher business effectiveness and innovation through IT and secondly, greater efficiency of IT investments. Businesses will have to embrace such paradoxes more and more moving forward,” Mr. Singh added.

2010 Domestic IT-ITeS Market to grow at 15% (against 5.4% in 2009)

IDC expects the combined India domestic IT-ITeS market to grow at 15.0% in 2010 to achieve revenues of Rs. 1,20,666 crore compared to Rs 1,04,906 crore in 2009.

The domestic IT market is expected to grow at 13.0% in 2010 to touch Rs. 1,07,655 crore, while the domestic ITeS market is expected to post revenues of Rs. 13,011 crore, a growth of 35.0 %.

The combined India domestic IT and IT-enabled Services grew by 5.4% in 2009 to touch revenue of Rs. 1,04,906 crore (compared to Rs. 99,654 crore in 2008).

Table 1: India Domestic IT-ITeS Market Size (in Rs. Crore)

Notes to Editors:
IDC’s India Domestic IT-ITeS Market Top 10 Predictions 2010 report covers only the domestic Indian Information Technology (IT) and IT-enabled Services (ITeS) markets. IT-ITeS exports from India are not covered as a part of this study.

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IDC India 
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For industry inquiries, please contact:  

At IDC India
Mukesh Jain 
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