>INFORMATION TECHNOLOGY INDUSTRY OUTLOOK: Key growth drivers and threats

In the face of the volatility in the economic environment and currency, 2011 recorded steady growth for technology and related services sector, with worldwide spending surpassing USD 1.7 trillion, a growth of 5.4% over 2010. Software products, IT and BPO services continued to lead, accounting for over USD 1 trillion - 63% of the total spend. IT-hardware spend of USD 645 billion, accounted for the balance 38% of the worldwide technology spend in 2011. The year saw renewed demand for overall global sourcing, which grew by 12% over 2010, nearly twice the global technology spend growth.


India’s share in global sourcing stood at 58% in 2011, up from 55% in 2010. Indian IT-BPO exports continued on the growth path in FY12, as it is estimated to have grown by 16.3%. IT services has been exhibiting the robust growth at 19%, BPO growing by 13% & ER& D by 15%. Transformation, new business models are driving organization wide efficiencies


While the growth in IT-BPO spend is expected to be gradual over the next three years, global sourcing spend is seen to outpace this growth. IT outsourcing market is set to grow at a CAGR of about 8% over 2011 to 2013, while BPO off shoring is expected to grow at a little over 7% during the same period. Costs still remain essential for global sourcing, industry expertise and innovation is expected to drive future sourcing requirement. In addition, rate of introduction of new technology is much faster now and is expected to continue to be even faster in future. There is a strong correlation between technology adoption rate and investment rate. The year 2011 was the year of mobile adoption, where tablets and smartphones sales growth, by volume and by percentage, outpaced the shipment of desktop and laptop market. This mobile revolution witnessed spending by organizations in developing both consumer apps and enterprise apps.


From IT industry perspective - the market for enterprise mobility solutions alone is expected to grow to USD 17 bn by 2015, presenting a huge opportunity to increase revenue from this segment at a pace of triple-digit growth. Clearly, the future of technology services industry is beyond services - it will be a combination of services, solutions and platforms. Indian IT
organizations are investing in building platforms to drive future growth opportunities. These domain solutions and technology platforms will offer improved revenue leverage versus talent employed in the industry and will also significantly increase the intellectual property base of the Indian IT industry. The industry can take a clue from the fact that public cloud services
spending is expected to outpace growth of the overall IT spend by about four times between 2012 and 2015.


To read report in detail: IT INDUSTRY
RISH TRADER