Better Days Ahead For Indian IT Software Market
The Indian software market witnessed a much improved growth trajectory in the second half of this year compared to a slow and sluggish period last year, owing to political stability and economic revival, says research firm IDC. The market registered a year on year growth of 10.7 percent in the last six months of 2014. The sweeping win of the BJP Government in the 2014 elections resulted in some amount of positivity in the market which reflected in the IT investments by major verticals like BFSI, manufacturing, retail and e-commerce, says IDC.
Few big vendors closed major deals which were in the pipeline since early 2013, but did not materialize owing to economic and political uncertainties. This led to overall growth of the market from June 2014, says the research firm.
IDC expects the software market to grow at a stable pace in the next five years (2014-2018) with a healthy CAGR of 10.5%. Some of the areas which are expected to witness software uptake are mobile application development and mobile device management, security software (related to 3rd Platform), system software, analytics and engineering applications.
Virtualization and cloud players such as VMware, Salesforce and Red Hat generated good business owing to greater market awareness while database and analytics players such as Teradata, Informatica, Oracle, Qlik and others registered strong double digit growth due to widespread demand for customer insights and analytics.
Banking, Finance, Securities & Investment Services (BFSI), Manufacturing and Communication & Media were the top verticals which invested in upgrades and new licenses. Some of the sectors to watch out for in the future includes Entertainment, Retail & Ecommerce, Education, Hospitality etc. There has been a shift in the mindset of users across these industries. IT investments are now made not only for process improvements but also for growing business opportunities and improving customer experience.
The software market started to revive since Q2 2014 post elections. Some of the solutions which were readily accepted across verticals included customer analytics, mobile solutions, cloud solutions, customer management solutions, omni-channel management systems, data loss prevention etc.
Government initiatives such as Mobile Seva, Digital India, Pradhan Mantri Jan Dhan Yojana and the likes will be instrumental in triggering adoption of software solutions in the coming years. Launch of various schemes and policies is expected to catalyze software uptake by Manufacturing, Retail, Travel & Tourism and BFSI in the coming 2-3 years, says IDC.
“Large as well as SMB customers are looking at ways to curb their capital expenditure and are keen to embark on the cloud journey. This has led the vendors to make their licensing policies more flexible and easier so that existing customers could smoothly transition to a cloud environment,” says Shweta Baidya, Senior Market Analyst, Software, IDC India.
“Some vendors are offering exchange schemes to their customers to buy back their hardware in exchange of a cloud setup which is resonating very well with the SMB market,” adds Baidya.
The researchers see a rise in adoption of open source software especially among the SMB segment which is shying away from blocking its capital on expensive proprietary software. Small and co-operative banks, retail and telecommunication sectors are looking at customized solutions based on open source platform for greater flexibility and cost reduction. The evolution of third platform is expected to fuel the uptake of open source solutions further in the times ahead, it says.
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