Technologies in cloud, big data, analytics, mobility, social media and the Internet of Things (IoT) have become the order of the day. Indian companies are keeping track of these trends and gearing up to change their products and services to accommodate these areas where clients are looking for more innovations to enhance delivery.
The industry also had to face the headwinds of the economic slump globally in the first half of the year and its effects on the cut in government expenditure. In India, the Narendra Modi government provided a positive momentum to industrial and investment activities with a new policy push. His revised National e-Governance Plan (NeGP), Digital India campaign and development of Smart Cities also added impetus to Indian IT companies with other government-initiated economic measures in European and the US economies.
The Indian IT industry landscape comprises small, medium and large firms, including global services majors like TCS, Infosys, Wipro and HCL, multinational companies captive units and sectors providing software, hardware, process management, engineering, research and development and innovative products. This also includes ever growing startups vying hard to receive global attention with their so-called innovative products and brimming with high valuation expectation.
Indian companies should be very careful and not give the domestic market to foreign companies. “We have new initiatives of the government in sectors like education, healthcare, agriculture, financial services, logistics, infrastructure and manufacturing to implement various programmes with other stakeholders. Here the digitisation campaign, Aadhar, smart cities and industrial corridors will have its impact with the help of IT hardware and software supports,” says PWC analysts Pallavi Singhal.
“Indian startups are witnessing a four-fold increase in access to capital through VCs, angel investment and seed funding. This helps them to work on building tailor-made products for their customers. Simultaneously, we need to also work addressing challenges on creating supportive government policies in terms of ease of doing business, tax incentives, participation in government contracts and availability of risk capital. Nasscom will continue to actively engage with stakeholders across to address these challenges,” he said.
With the world moving towards the Internet of Things, the market for which will surpass the PC and mobile markets combined by 2017, the IT software and hardware industry will have to address the issues related vulnerabilities like hacking and piracy. Here, the industry is also facing the challenges of privacy and security of information.
CRISIL Research forecasts the industry growth rate to remain below 15 per cent annually over the next two years globally. Gartner Senior Vice-President and Global Head (Research) Peter Sondergaard said that the IT services segment is forecasted to grow 15.7 per cent while the software sector may grow 14 per cent in 2015.
This spells good news for Indian software services exporters like Tata Consultancy Services (TCS), Infosys, HCL Technologies, Wipro and Tech Mahindra, which have also reported improved growth and large deal wins from key markets of the US and Europe, which together account for over 85 per cent of their business. “By 2015, we expect that one in three jobs will be connected to software, smart decision-making or robotics. By 2018, digital businesses will require 50 per cent fewer business process workers. However, by 2018, digital business will drive a 500 per cent boost in digital jobs,” said Sondergaard. Gartner said that devices will continue to account for the second-largest part of the Indian information and communication technology (ICT) market, after IT services.