NEW DELHI: Indian vendors have only been able to tap a market share of 2 percent of the global IT Services market and need to tap new service lines to capture a market share 4.6 percent of the worldwideIT services market by 2008. In the ITES-BPO segment too, India has a market share of 2 percent currently and will need to target new service lines such as Engineering/R&D, logistics and sales to capture a share of 4.8 percent by 2008. Speaking at the media briefing Arun Kumar, chairman, NASSCOM, said, "India’s presence in the global IT Services market is today more focused to custom application development and application outsourcing, which forms only 10 percent of the global IT services market. Significant potential also exists in service lines such as Network infrastructure management; IS outsourcing; IT Training and Education; Hardware support and Installation; and Network consulting and integration where Indian vendors have negligible presence currently." "With Off shoring becoming more mainstream, Indian IT companies are expected to penetrate new service lines such asSystems integration (accounting for 22% of global IT services market); Packaged Software Support and Installation (13%) and IT Outsourcing (18%)," he added. Kiran Karnik, president, NASSCOM, said, "Historically the new service lines have been difficult to penetrate by Indian vendors from an offshore base. But increased customer willingness to disaggregate service lines in order to maximize offshore leverage and also Indian vendors building onshore skills, augur well for India’s foray into these service lines. Many leading vendors already have a strong presence in package software installation and support market and upto 40-50 percent of the activities involved can be offshored." As per the recent NASSCOM research on IT services scenario, Indian vendors can tap the systems integration market, which is expected to reach US$ 142 billion in 2005. India currently has a market share of 0.5 percent in the global market, which can reach 2-3 percent by 2008. To successfully capitalize on this opportunity, Indian companies will need to build a network of best-of-breed partnerships, attract world-class talent and develop best-in-class project management skills. The study further forecasts opportunity in the Enterprise Application Integration market, which is expected to grow significantly from an estimated $6 billon in 2001, to $18 billion in 2005. The large Indian software companies have significant advantage in undertaking EAI projects, given their experience with various enterprise applications, as well as various technological platforms. With increasing cost pressures, global packaged software vendors are offshoring implementation, customization and support of packaged applications. The share of Indian software industry is currently 1.5 percent and has the potential to increase to 4-5 percent by 2008 in this segment. As Indian software vendors have been involved in the implementation of IT solutions designed by established consulting firms, large Indian companies have built significant domain knowledge in the vertical market segments, especially financial services, telecom and manufacturing. Indian companies can utilize this knowledge to move up in the software development value chain through recruiting overseas talent, investing in building their brand or acquiring niche consultancies. According to the NASSCOM survey in the ITES-BPO segment, Customer Care and Administration continues to be the fastest growing segment in the ITES-BPO space. Revenues in the segment are projected to grow from 400 crore in 2001-02 to 700 crore in 2002-03 which marks a growth of 75 percent over last year. Other segments which are also witnessing growth include, Finance which is projected to grow from 300 crore in 2001-02 to 450 crore in 2002-03, Payment Services from 110 crore in 2001-02 to 190 crore in 2002-03, Administration from 185 crore in 2001-02 to 350 crore in 2002-03, Content Development from 450 crore in 2001-02 to 650 crore in 2002-03 and HR from 30 crore to 35 crore. Kiran Karnik said, "Significant opportunity exists for Indian ITES vendors in new areas in the ITES-BPO segment such of Sales, Legal, Engineering/R&D and Logistics. Worldwide ITES-BPO spending for 2006 is projected to be US$ 165 billion for Sales, US$ 163 billion for Legal, US$ 123 billion for Engineering/R&D and US$ 308 billion for Logistics."
Source: IANS