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Software Market To Grow With A CAGR Of 10.6% In Next 5-yr: IDC
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India software market registered a stable year-on-year growth of 10.0 per cent on India Software Tracker for 2H 2014, revealed International Data Corporation (IDC).
However, the market is expected to gain a steady momentum starting 2016 and beyond as deals would have closures and implementation would start. Some of the reasons for the stable growth include a steady double digit growth for the top vendors such as SAP, Microsoft, Oracle, IBM and Synopsys cornering more than 60 per cent of the total share. More investments are expected to pour in from sectors such as government, manufacturing and retail among others.
“Some of the larger software vendors restructured their organisation in line with the emerging technologies and re-aligned their strategies to capture the mindshare in the growth markets such as SMB, cloud, analytics and mobility. This has worked quite well for them and they have managed to grow inspite of the uncertainty in the market," says Shweta Baidya, Senior Market Analyst, Software, IDC India.
The Indian IT Software market is segregated into three primary markets which include Application Development Deployment (AD&D), Applications and System Infrastructure Software (SIS). The total AD&D market grew by 9.5 per cent year on year while applications market pegged a growth of 10.8 per cent year-on-year and SIS market grew by 8.5 per cent yyear-on-year during the second half of calendar year 2014.
Some of the major transformational projects kick-started by the Government, including Digital India, Make in India, Pradhan Mantri Jan-Dhan Yojana etc. have already pushed the adoption in other sectors too. Further, Small & Medium Enterprises (SME) segment is the new sweet spot for most of the vendors who are trying to push their Software-as-a-Service (SaaS) offerings among SMEs through their various partnerships.
IDC expects the software market to grow at a healthy pace in the next five years (2015-2019) with a CAGR of 10.6 per cent. Some of the software categories that will trigger the uptake include mobile applications, in-memory analytics, database security and privacy, open source applications, DLP, encryption, application security among others.
Operating System (OS) upgrades by customers along with bundled Office offerings and Office 365 uptake contributed to Microsoft growth during the review period. Oracle gained steady foothold across verticals which adopted cloud solutions to manage their workforce, and integrate their CRM applications with ERP to get a holistic view of their customers. SAP registered a robust growth owing to migration of its existing customers to SAP Cloud powered by its in-memory platform, SAP HANA
Manufacturing, Banking, Finance, Securities and Investment Services (BFSI), IT/ITeS and Communication & Media were the top verticals which invested in next generation solutions to gain a competitive edge in the market. Some other sectors that have shown strong inclination towards IT adoption includes retail, government, entertainment and hospitality sector.
The Union Government has a clear focus on leveraging technology for transformational projects and help improve infrastructure, build smart cities, address urbanization, revive manufacturing sector among others.
Manufacturing companies are making an effort to integrate social media platform with the back end systems to implement feedback during the production stage itself and enhance customer offerings. Telematics and Robotics are some of the other areas where the Manufacturing sector is beginning to display interest and discussions have started with the vendors for long term gains.
Use of big data analytics in the retail industry has helped companies to track information generated across multiple platforms such as CRM, Supply Chain Systems, Sensor Data, e-mails, Adsense Analytics and the likes to identify the latest trends and buyer sentiments and re-align their inventory levels accordingly.