The Domestic IT Services market in India is estimated to grow from US$5.7B in 2008 to US$12.8B in 2013, representing a compounded annual growth rate (CAGR) of 18.6% from 2008 to 2013, says Springboard Research.
The new Springboard report predicts the Indian IT Services market to be heavily dominated by Infrastructure Services, which are expected to reach US$7.2B in 2013 reflecting a steady 53% market share, and a CAGR of 18.1% from 2008 to 2013. However, Applications Services with a CAGR of 19.6% is to remain the fastest growing market segment, while IT Consulting Services remains the smallest with the expected market share of 5% and CAGR of 16.4%.
“The Indian domestic IT Services market is at par with international levels in terms of average gross margin and provides immense opportunity to the vendors,” notes Sudip Saha, senior research Analyst for Services at Springboard Research. “However, to meet high consumer expectations, vendors need to strategize around services delivery by implementing efficient processes, reusable tools & templates and replicable models.”
The Springboard report reveals that Infrastructure Hosting Services showed the highest growth over the period among the Infrastructure Services category with a CAGR of 23.4%, closely followed by Enterprise IT Outsourcing, Network Integration and Network Management. Also, Application Hosting enjoys the highest growth momentum in the Application Service market followed by Application Management and Infrastructure Application Integration.
In terms of vertical industries, Banking, Financial Services & Insurance (BFSI) leads the Indian IT Services market with 21.5% market share, followed by the Public Sector (including Education) and Telecom Industry. However Energy & Utilities, followed by Healthcare remain the fastest growing vertical industries.
“With industries such as Public Sector, Healthcare, Energy & Utilities, and Transportation & Logistics stepping up their IT spending, the appeal for the Indian domestic market has increased tremendously and is drawing the attention of domestic and MNC IT Service Providers ,” adds Phil Hassey, vice president of Services Research at Springboard Research. “However, the key challenge remains the disability to convert the potential demand into successful client engagement.”
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