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India Information Technology Report Q4 2012
Business Monitor International, October 2012, Pages: 88
The India Information Technology Report provides industry professionals and strategists, corporate analysts, information technology associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on India's information technology industry.
Indian IT spending is expected to reach US$20.5bn in 2012, up 14%, with government IT procurements at state and federal level helping to generate spending. Following relatively modest PC market growth in Q112, owing largely to exogenous factors, BMI expects slower growth in 2012, with IT Services in the vanguard. However, India's potentially vast IT market appears set to remain one of the region's growth opportunities owing to a growing economy and healthy consumer sentiment. Realisation of the market's long-term potential depends on raising India's low computer penetration and the government's ambitions to connect the vast rural areas to the outside world. The next layer of tier-3 and tier-4 towns, beyond the top 75 cities in India, is expected to be the major growth driver for the next few years, due to rising PC penetration.
Headline Expenditure Projections:
Computer Hardware Sales: US$8.8bn in 2011 to US$9.7bn in 2012, +10.0% in US dollar terms.
Forecast in US dollar terms upwardly revised due to analyst modification despite slower growth in Q112 as consumer demand was constrained by macroeconomic factors.
Software Sales: US$2.2bn in 2011 to US$2.5bn in 2012, +15% in US dollar terms. Forecast in US dollar terms unchanged but enterprise resource planning (ERP) spending will continue to trend upwards, with stronger demand for technology from the small and medium-sized enterprise (SME) segment.
IT Services Sales: US$7.1bn in 2011 to US$8.2bn in 2012, +18.0% in US dollar terms. Forecast in US dollar terms downwardly revised due to analyst modification and macroeconomic factors, but a number of large projects are expected from the government and from other key verticals.
India's score is 42.1 out of 100.0, unchanged from the previous quarter. India still ranks ninth in our latest Asia RRR table, ahead of Thailand and Vietnam but behind China. The country achieved a relatively high IT Market score of 52.5, reflecting the potential returns, but its overall rating was lowered by a Country Structure score of just 15, the joint-second lowest in the region.
Key Trends & Developments:
- In 2012 there are expected to be strong growth opportunities in the next 200-400 smaller cities in India, where vendors are expanding their retail and distribution presence. Around 45% of new PCs sold in the Indian market are now shipping outside the top 75 cities. The government's policy of providing tax breaks and subsidies for hardware manufacturers should help keep prices down and support growth.
- Healthcare is expected to be another major area of opportunity over BMI's five-year forecast period, as the government makes healthcare modernisation a key priority. In its 2012-2013 union budget, the government increased healthcare spending by 14%, to INR307.02bn (US$6.69bn).
The healthcare IT market has more than doubled in the past 10 years, according to estimates, as healthcare players have realised the potential of IT to drive both service and business efficiency.
- Despite an overall low level of government IT/software spending, government programmes, at both state and federal level, are likely to become an increasingly important source of IT contracts over the next few years. At the federal level, programmes such as the five-year e-governance initiative and smart ID project, will generate more IT investment. Meanwhile, education looms large in procurements from state governments such as Tamil Nadu.
Executive Summary 5
SWOT Analysis 7
Indian IT Sector SWOT 7
Indian Telecoms Industry SWOT 8
India Political SWOT 9
India Economic SWOT 10
India Business Environment SWOT 11
Asia Pacific IT Risk/Reward Ratings 12
Table: Asia Risk/Reward Ratings Q412 15
IT Markets Overview 16
IT Penetration 16
IT Growth and Drivers 18
Sectors And Verticals 20
Market Overview 24
Government Authority 24
Industry Developments 39
Table: IT Industry Tax 41
Industry Forecast 43
Industry Forecast Internet 47
Table: Internet – Historical Data And Forecasts, 2009-2016 47
Competitive Landscape 49
IT Services 54
Internet Competitive Landscape 56
Table: Regional Broadband Penetration Overview 57
Macroeconomic Forecast 58
Company Profiles 62
Table: IT Service Line Distribution, 2010-2011 64
Table: Verticals, 2010-2011 65
Table: Geography, 2009-2011 65
Table: Mergers And Acquisitions 65
Table: Customer Size Distribution (TTM), 2009-2011 66
Table: Customer Metrics, 2009-2011 66
Microsoft Corporation 67
Tata Consultancy Services 72
India Information Technology Report Q4 2012
© Business Monitor International Ltd
Table: TCS Revenues By Geography, (US$mn) 74
Country Snapshot 80
Table: India's Population By Age Group, 1990-2020 ('000) 81
Table: India's Population By Age Group, 1990-2020 (% of total) 82
Table: India's Key Population Ratios, 1990-2020 83
Table: India's Rural And Urban Population, 1990-2020 83
BMI Methodology 84
How We Generate Our Industry Forecasts 84
IT Industry 84
IT Ratings – Methodology 85
Table: IT Business Environment Indicators 86
Table: Weighting Of Components 87