ITeS market set to cross Rs 1 trn in 2008: IDC

With a growth of 27 per cent in 2007, the IT-enabled services (ITeS) sector in India is set to cross the Rs 1,00,000 crore mark in 2008.

This would result in a market growth of 24 per cent. The year 2008 promises to be the beginning of Growth Phase 2.0 of the Indian IT sector, said IT research company IDC (India).

"By posting a substantial jump in the domestic IT/ITeS sector since 2002, the industry is on a new growth trajectory. IDC India expects a significant transition in the Indian IT market as part of Growth Phase 2.0," said Kapil Dev Singh, country manager, IDC India.

Growth Phase 2.0 will leverage the IT infrastructure and technical capability built up to offer a new-age services to the Indian enterprises and consumers, he added.

According to the IDC study, the level of maturity reached by the Indian consumer will be measured by better internet and telecommunication services such as fixed-mobile convergence, tele-presence, Web 2.0, social networking sites, online and mobile gaming.

Broadband will emerge as a favoured choice in 2008. Mobile and internet will continue to grow as an alternative internet access medium, according to the IDC fixed-line.

In the first-half of 2008, all major operators will be offering broadband up to 8 Mbps to consumers in metros and some other key cities.

Bandwidth-hungry applications such as IPTV, online gaming and VoIP will ensure a healthy uptake of VHSB in 2008, and beyond. According to the study, the Web 2.0 market in India is set to take off in 2008 with shakeouts and a possible string of consolidations to follow.

Virtualisation is also poised to become mainstream in 2008, as it gains wide-scale adoption. IDC India estimates the share of virtualised servers to double from the current 22 per cent to 45 per cent by the year-end.

IT solutions, which include hardware, software and services, delivery will witness change in 2008, with pockets of success and growing awareness setting the stage for wider market adoption, for which the small and medium enterprise (SME) segment will be a key driver, according to IDC.

Despite the high growth rate predicted for the Indian market, IDC expects a decline in the worldwide IT spend, with a significant US market downside risk. The worldwide IT market growth will be lower, at a moderate 5.5-6 per cent, down from 6.9 per cent last year, the study stated.

According to IDC's Global Research Operation (GRO) team, the earliest impact from economic downturns is felt, historically, in the hardware sector, with software impact lagging by one or two quarters and services impact more gradual.

Even though there is a growing interest of vendors in new geographies (beyond BRIC nations i.e. Brazil, Russia, India and China), India would continue to remain the centre of attraction.

As the BRIC nations move towards IT maturity, vendors are scouting for new emerging geographies to maintain sustainable growth. IDC India expects India revenues to grow the fastest during 2006-2011, amongst all BRIC nations, even if the focus moves beyond the BRIC countries. India currently contributes to about one-fifth of the total BRIC revenues.