Stats and Insights of Indian IT and Software
Industry in 2019
FY19: Indian IT and Software Industry 5 min.
|
13th Feb., '19
History of IT and Software Industry in India
In existence since the 1960s, software potential rise with Personal Computers (PC) in
1970s and expanded its reach with the growing market for application, games and utility
development, and in the 21st century with the rise of Software as a Service (SaaS) the
software market is ever expanding. Today, Indian software companies are contributing
to the growth of the Indian economy with a compounded growth of 60% each year
offering IT services to more than 95 countries all around the globe.
India is an abundant house of technical manpower being home for the world's finest IT
service provider companies from major cities of India such as - Bangalore, Delhi,
Mumbai, Kolkata, Chennai, Pune, and Hyderabad. Today, India is the 3rd faster-growing
market for software enterprise.
Overview of Indian IT and Software Industry
Technology has rapidly evolved for the past decade and so is the demand for
Information Technology services and products leading to the industrial revolution in the
Indian market. IT helped represent India as a big player in the global market is one of
the finest growing economies in the world providing the high-end business solution and
opening new export verticals.
Today, with 75% of global technological skilled profession India has become a global
hub for the digital sourcing market and IT solutions.
IT and Software Services
IT Sector is broadly categorized into Software, IT Services, and Information Technology
enabled services (ITeS) and IT Hardware segment.
I. Software
Software industry comprises of software products, engineering and R&D services
serving Small, Medium and Large organization with simplified business solutions.
Software Products:
Infrastructure Software
serving to connect the people with systems to efficiently execute
business processes, such as Business Intelligence (BI) Tools, Security software,
Application Development, Database Management Systems, IT Operations, OperatingSystem Software, etc.
designed to solve business problems, such as Consumer Relationship
Management (CRM), Human Resource Management (HRM), Enterprise Resource
Planning (ERP), Supply Chain Management, Content Management System, Project
Management System, etc.
Enterprise Software
Software Engineering (SE):
SE services deals in finding the application of engineering to the development of
software products.
Research and Development (R&D):
R&D service concerns to creating new software product innovation targeting cost cutting,
efficiency, strategies formulation, participation, etc.
II. IT Services
IT Services are oriented into two segments:
Project-Oriented Services:
Services catered towards clients requirement, onsite or offshore.
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IT consulting focusing on advising organization toward the use of Information
Technology (IT).
System Integrations to deploy various system according to the client's need, such
as integration of the business process, database management, logistics, software
or hardware, etc.
Software Testing to ensure the quality of the service following response testing,
security testing, and load testing.
IT Outsourcing:
One organization serves another for the need for deploying or managing its IT
architecture and systems.
Training and Support:
Services to install, configure and maintain hardware and software solutions into the
client's system or to educate the process of the IT system.
III. IT-enabled Services (Web-enabled/Remote/Tele)
These services are delivered offshore using a means of software and internet
transmissions covering the whole range of IT for refining productivity such as - Financial
& Accounting, Human Resource, Knowledge Process Outsourcing, Business Process
Outsourcing, etc.
Insights of Indian IT and Software Industry
The software industry has faced major disruption in traditional business modal with the
introduction of digital transformation technologies like artificial intelligence, internet of
things (IoT), cloud computing, big data and so forth. However, the Indian IT industry
scaling up to the value chain offering more end-to-end solutions, digital revenues and
government's scheme like Make in India, Start-Up India, and Digital India.
The digitally skilled manpower is also increasing rapidly with wage level being lower than
most countries resulting in the unmatched value proposition. The highly qualified pool of
technical manpower, government's initiative, and digital technologies have shown a
greater impact in the software market with a revenue of 5.8 billion US dollars in FY2018
[1].
Key Insights:
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India has become one of the largest global outsourcing destination across the
globe with a 55% market share.
IT industry contributes to 3rd ranking Foreign Direct Investment (FDI) share.
India has a 35% share in Business Process Management (BPM) share.
IT sector contributes to 7.7% to India's GDP.
India has more than 5000 startups with 1200 startups being added in 2018.
Characteristics of Indian IT and Software Industry
India is considered to be one of the major IT force in the global software market with
advancement in education, government initiatives, investment opportunities, and skilled
manpower charactering following:
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Young and skilled IT Development manpower attributes to Indian software
development growth.
Indian IT wages are lower as compared to other countries.
The quality of work form India is more robust and efficient as compared to others.
Indian education and global exposure contribute to a high-quality IT professional.
Software industries are backed by Government initiatives.
Academics and institute contributing to the research and development of IT.
Banking and financial services aiming toward new investment opportunities.
Threats to Indian IT and Software Industry
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Increased demand for IT and Software causes a shortage of skilled
professionals.
Increasing competition from other nations.
Over-dependency of Indian IT and Software industry on the USA (62%), UK
(17%), Continental Europe (11%), Asia Pacific (8%) and 2% rest of the world.
India specializes in IT-enabled Services and losing its focus on IT and Software
products.
Companies neglecting Engineering and R&D services.
Emphasizing too much on low-end ITeS services.
No focus on the hardware manufacturing sector.
Summary and Conclusion
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India has become one of the topmost investment destinations in the IT industry.
Indian IT industry has grown five-fold in FY17-18.
Cost competitiveness is India’s USP in the global market.
India holds a 55% share as an outsourcing destination.
IT industry contributed more than 7.9% in Indian GDP in FY17-18.
India has more than 1000 deliveries center in about 200 cities and 80 countries
for IT services.
Market Sector Breakup for FY18: IT Services ($86bn), BPM ($32bn), Software
Products and Engineering services ($33bn) and Hardware ($15.40bn).
Indian IT Industry Market Size for FY18: Domestic ($41bn) and Export ($126bn).
IT industry contributes to 37% of venture investment and equity funds in India.
IT industry is expected to add another 100k job in FY19.
Indian IT industry is expected to grow up to US$350bn by 2025.
References
[1] Indian enterprise software market revenue from 2013 –
2018: https://www.statista.com/statistics/328203/indian-software-market-revenue/