Opportunities in IT/ITeS Sector in
Gujarat
Vibrant Gujarat 2013
Colonel Naveen Bhasin,
CEO, Sai InfoSystems (India) Ltd
Contents –IT/ITeS
1
Overview – India Scenario
2
Gujarat scenario
3
Investment Opportunities
Overview
1
Vibrant Gujarat 2013 • IT
India – IT/ITeS Scenario
GROWING INDUSTRY
IT / ITeS industry is expected to be USD 320 billion
by 2020. The CAGR for the decade (2011-2020) is
pegged at 15%
Domestic BPO market would increase to USD 2.5
billion by 2014
The Indian electronics turnover is expected to be
USD 400 billion by 2020.
TRAI is targeting a 10-fold increase in broadband
subscribers to 100 million by 2014 from existing
10.3 million
Industry has also started to impact rural areas –
rural BPO organizations employed more than
5,000 people in FY2009
80
IT/ITeS exports in USD billion
70
60
50
40
70
30
20
31
40
46
50
2008-09
2009-10
59
10
0
2006-07
2007-08
2010-11
2011-12 (e)
India – IT/ITeS scenario
Industry characteristics
• Major segments: 1. IT Services, 2. ITeS – BPO,
3. Software products and Engineering Services, 4.
Hardware
 Segment-size: IT services is the biggest in
size (the revenue from IT services
constitutes about 50% of the total industry
revenues)
 Segment growth: Software products &
Engineering services are fastest growing
(CAGR – 27.5%) and slowest growing
segment is Hardware (CAGR – 17%)
• Larger companies depend more on export and
smaller ones more on domestic market – hence,
larger companies would prefer an SEZ over other
IT space (such as an IT Park) because of export
incentives provided in SEZs.
• In the future, domestic market would be the
growth driver for the IT industry – even the top 10
companies’ revenue dependency on domestic
market would increase.
Revenues of different components of IT/ ITeS Industry. CAGR
for FY05 to FY 10.
CAGR 10.5%
CAGR 21.8%
Hardware.
13%
Software
Products &
Engineerin
g Services.
17%
IT
Services.
50%
CAGR 27.5%
ITeS BPO. 20%
CAGR 23.1%
Export and domestic % aggregate revenue of top
100 software vendors (FY10)
100%
80%
32.80%
59.20%
60%
40%
74.80%
67.20%
40.80%
20%
0%
Top 1-10
Top 11-50
Export
Source: NASSCOM
IT services
form
the
largest
portion of
IT/ITeS
revenues
Domestic
25.20%
Top 51-100
Future outlook
The total IT / ITeS industry in India should be USD 230 billion to USD
320 billion compared to about USD 90 billion today
• We have projected the Indian IT sector demand for four different scenarios as tabulated below.
Scenario Description
Projected
CAGR
(Exports)
Projected
CAGR
(Domestic)
Scenario 1
If assumed that future growth will be same as last 5 years’ CAGR (FY07-FY11)
17%
15%
Scenario 2 (Base case)
If NASSCOM projections are used
13%
14%
Scenario 3 (Optimistic)
If CAGR is 2% more than NASSCOM projection
15%
16%
Scenario 4 (Pessimistic)
If CAGR is 2% less than NASSCOM projection
11%
12%
Export Revenue Projections in billion USD
300
120
250
100
200
80
150
60
Domestic Revenue Projections in
billion USD
40
100
20
50
-
-
Scenario 2
Source: PwC analysis
Scenario 1
Scenario 3
Scenario 4
Scenario 1
Scenario 2
Scenario 3
Scenario 4
Top 10 Sectors in India – FDI Inflows in 2010-11
SN
Sector
Net FDI
1
Services (Financial and Non-Financial) $26.67 b
2
IT (Hardware and Software)
$10.82 b
3
Telecom
$10.61 b
4
Housing & Real Estate
$ 9.65 b
5
Construction (Roads & Highways)
$ 9.49 b
6
Automobile
$ 6.19 b
7
Power
$ 6.15 b
8
Metals and Metallurgy
$ 4.28 b
9
Oil & Natural Gas
$ 3.16 b
10
Chemicals (Other than Fertilizers)
$ 2.92 b
Source: FDI in India, 2011 Report
Growth drivers-National Policy on IT 2011
100
Targeted
revenue in
USD billion
by 2020
29
Current
revenue in USD
billion in 2011
Enabling IT
Policy 2011
59
200
Domestic
Exports
Strategies formulated in the Policy to achieve targets
• Creating ecosystem for a globally competitive IT/ITeS Industry
• Human Resource Development
• Promotion of Innovation and R&D in IT Sector
• Enhancing productivity and competitiveness in key sectors through ICT
• Creating an ecosystem for Internet and mobile driven Service Industry
• Enabling Service Delivery through e-Governance
• Mobile based Value added Services
• Development of Language Technologies
• GIS based IT Services
• Security of Cyber Space
Source: Department of Electronics and Information Technology, GoI
Gujarat scenario
2
Vibrant Gujarat 2013 • IT
IT/ITeS – Gujarat scenario
IT exports from Gujarat in Rs. crore
1400
1268
1150
1200
1,035
1000
800
600
The stretch between Ahmedabad and Gandhinagar is
now being developed as a knowledge corridor. Land
has been allotted and several IT parks and centres of
excellence are taking shape here.
681
564
400
200
0
2006-07
2007-08
2008-09
2009-10
Gandhinaga
r
Ahmedabad
2010-11
More than 1,000 ICT & BPO companies are operational
in Gujarat.
Vadodara
127 new companies are registered with the
Commissionerate of Information Technology.
More than 1,250 companies are registered with Gujarat
Electronics & Software Industries Association (GESIA)
IT units in Gujarat are spreading their markets from the
US to other regions like Europe, Middle East and Africa
Infrastructure available at Infocity - Gandhinagar,
GNFC Infotower - Ahmedabad, Astron IT Tech Park Ahmedabad and another one is coming in Baroda
Valsad
14 Special Economic Zones have
been planned specifically for
IT/ITeS – 7 are notified and 7 have
secured formal approval
Source: http://www.gnr.stpi.in, GIL; Gujarat Electronics & Software Industries Association (GESIA), Commissionerate of Information Technology
Why Gujarat?
Land Bank
availability
and
Business relatively
lower real
friendly
governanc estate
e and
investor
friendly IT
Policy &
initiatives
Skilled human
resource
advantage and
lower cost of
manpower.
Lowest BPO
attrition rate
Robust
Physical,
Social and
industrial
infrastructure
Lowest startup and
operational
costs
Investment opportunities
3
Vibrant Gujarat 2013 • IT
Investment opportunities
During the Vibrant Gujarat Investment Summit 2011,
115 MoUs were signed for the IT/ITeS sector as against
20 MoUs in the 2009 Summit.
Urban Living and Emergency Management
Services
The proposed investment amounted to Rs. 68,565
crore and could provide employment to 320,000
people.
Cloud based services and solutions
Foreign Investments proposed in the sector by USA
were about Rs. 5300 crore employing 14000 people.
350000
320,000
E –Governance Initaitives
Video Telephony and Unified
Communications
300000
Urban and rural planning – using GIS,
remote sensing
250000
200000
142992
150000
100000
50000
Knowledge Process Outsourcing
68,565
46507
IT based education and trainings
0
Investment in Rs.
crore
2009 VG Summit
Employment
2011 VG Summit
Urban Living – Products and Services
Smart Grids
Smart City
Power, Water,
Communication,
Public Safety etc.
Aggregation of all
modules
Intelligent
Buildings
Disaster
Management
EOC, Alert and
Messaging, UC, Planning
etc.
Homeland Security
Turnkey projects involving
command and control centres,
info gathering, analytics etc.
Analytics
Homeland
Security
Energy Mgmt, Home
Automation, security
etc.
HLS Spend Forecast: Break-up
Source: “Homeland Security Assessment – India; Expansion and Growth” by ASSOCHAM; June 2011
Data Centres / Cloud Services – Market Size and Potential
•
Current data center capacity in India at approx. 2.8 million sq. ft. (Service Providers
have 55% Market Share and Captive has 45%). The same capacity is projected to
increase to 6.6 million sq. ft. (Service Providers capturing 70%)
•
•
•
•
Median Data Center size today is 2500 – 3000 sq. ft.; the industry may see consolidation
of space in near future
PUE of 2.0 may become industry standard
Outsourcing will drive growth rather than captive data centers
Current Revenue streams from Colocation (for space and Power only) and Hosting
stands at $487 million. Out of this, hosting and managed services account for < 25%.
The revenue from these streams is expected to cross $1.3 billion by 2016 (Hosting
and managed services to have 35% Market Share)
•
•
•
Disaster Recovery could become a must have service for organizations
Hosting / Managed service will experience higher growth trajectory (26% CAGR)
Growth in Internet and online content will leverage Hosting services
Data Center Capacity in India (‘000
sft)
Colocation & Hosting Revenue (USD
Millions)
1400
7000
14%
6000
1200
5000
1000
4000
800
3000
600
2000
400
1000
200
22%
0
0
2010
2011
2012
2013
Service Provider
Source: Gartner Research
2014
Captive
2015
2016
2010
2011
Colocation
2012
2013
2014
2015
Hosting / Managed Services
2016
Healthcare Segment – Products / Services
Hospital Applications
EMR
HMIS, Custom
Development, Other
Enterprise Level Software
Inter-operability, Database
development etc.
Info. Exchange
Tele-Medicine
Bringing all the
stakeholders in one
open exchange
Software, Physical
Infra etc.
Mobile Apps
Portable EMRs, NFC
enabled interfaces, QR
etc.
Mobile Applications
Energy Segment – Products / Services
Distribution Franchise
SCADA
Would provide the basic
know-how and
operational experience
Inherent part of any
distribution operations
Smart Meters
Smart Grid
Heavy demand
projected, can be for
captive use or for
B2B selling
IT systems, turn key
deployment and
operations
Sensors
Niche Market, usage in
multiple verticals
SCADA: Supervisory Control and Data Acquisition
Sensors
Agriculture Segment – Products / Services
Soil Mgmt. Services
Based on sensors,
advisory services for
seeds, fertilizers,
farming etc.
Mobile Applications
For farmers, market, govt.
agencies etc.
GIS Mapping
GPS Solutions
GIS Mapping
services, land records
and databases
GPS solutions to
government and
private agencies
Sensors
Data capturing devices
for all applications
Sensors
Sum-up – Products and Services
Health
• Hospital Applications
• EMR
• Mobile Applications
• Information Exchange
• Tele-Medicine
Energy
• SCADA
• Smart-Grid
• Distribution Franchise
• Smart Meters
• Sensors
Education
• E-Learning
• ICT Solutions
• Devices
• Information Exchange
• Cloud Services
Agriculture
• Mobile Applications
• GPS Solutions
• GIS Mapping
• Sensors
• Soil Management Services
Urban Living
• Disaster Management
• Homeland Security
• Smart City
• Smart Grids
• Intelligent Buildings
Enablers
Data Centre / Cloud Services
IP Surveillance
Event Management System
IP Communications
IT Hardware
Block No. 18, 2nd Floor, Udyog Bhavan,
Sector 11, Gandhinagar, 382 017, Gujarat, INDIA
Phone: 079-23256009, 23250492/3
Fax: 079-23250490
E-mail: indextb@indextb.com
www.indextb.com
Visit us at www.vibrantgujarat.com