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India may account for $11 Bn of global software market
By siliconindia
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Wednesday, 13 August 2008, 00:45 IST
Bangalore: The ever growing IT industry of India is expected to captivate $11 billion worth global IT products business, which accounts to two percent of the estimated $500 billion global market by 2015. As per 'Nasscom Software Product Study: Outlook for Indian Software Product Businesses,' which consisted of 371 companies, Indian software product business is expected to be in the range of $9.5 billion to $12 billion (
39, 900 crore- 50, 400 crore) by 2015, from $1.4 billion (5, 880 crore) in 2008.
The top 10 companies, who are mostly vertical oriented accounted for around 85 percent of the existing industry revenue, with the top five including Finacle of Infosys Technologies, I-flex, Subex and TCS products division, contributing the most. Subash Menon, Chair, NASSCOM Product Initiative, Founder Chairman, MD & CEO, Subex, said, "The industry seems to be spawning product start-ups at an amazing speed. This much needed momentum will fuel a mass movement in the products business in India. The required growth rate of 30 to 35 percent to take the industry from the current revenue of $1.4 billion in FY08 to about $10 billion in FY15 seems quite achievable, given the fact that the industry has been growing at 44 percent over the past 3 years. India clearly is poised to emerge as a key player in the lucrative and fast growing software products arena within the next few years."
The varied reasons of the gradual upliftment in the position of India as a strong contender for securing a part of the global cake are low cost advantage, domestic market potential, changing VC environment and support ecosystem. Moreover, India as a global hub for product research and development (R&D) activity, especially in the technology industry, currently houses over 600 multinational companies (MNCs) undertaking product R&D in their subsidiaries. Even the annual revenue aggregate of Indian software product businesses has grown at a compound annual growth rate of 44 percent. The study also predicts India's software market to grow threefold and the SMB share of domestic IT spending is forecast to grow from the current 38 percent, to over 50 percent by 2015. apart from it, there is a general tendency of the Indian software product market to be more vertical focused, thus catering to the needs of a specific group, than being horizantal. The study also suggests 10 verticals to be focused for successful results, which includes Business Intelligence, BFSI and telecom.
39, 900 crore- 50, 400 crore) by 2015, from $1.4 billion (5, 880 crore) in 2008.
The top 10 companies, who are mostly vertical oriented accounted for around 85 percent of the existing industry revenue, with the top five including Finacle of Infosys Technologies, I-flex, Subex and TCS products division, contributing the most. Subash Menon, Chair, NASSCOM Product Initiative, Founder Chairman, MD & CEO, Subex, said, "The industry seems to be spawning product start-ups at an amazing speed. This much needed momentum will fuel a mass movement in the products business in India. The required growth rate of 30 to 35 percent to take the industry from the current revenue of $1.4 billion in FY08 to about $10 billion in FY15 seems quite achievable, given the fact that the industry has been growing at 44 percent over the past 3 years. India clearly is poised to emerge as a key player in the lucrative and fast growing software products arena within the next few years."
The varied reasons of the gradual upliftment in the position of India as a strong contender for securing a part of the global cake are low cost advantage, domestic market potential, changing VC environment and support ecosystem. Moreover, India as a global hub for product research and development (R&D) activity, especially in the technology industry, currently houses over 600 multinational companies (MNCs) undertaking product R&D in their subsidiaries. Even the annual revenue aggregate of Indian software product businesses has grown at a compound annual growth rate of 44 percent. The study also predicts India's software market to grow threefold and the SMB share of domestic IT spending is forecast to grow from the current 38 percent, to over 50 percent by 2015. apart from it, there is a general tendency of the Indian software product market to be more vertical focused, thus catering to the needs of a specific group, than being horizantal. The study also suggests 10 verticals to be focused for successful results, which includes Business Intelligence, BFSI and telecom.
