India slow in adopting modern IT solutions: Zinnov
Despite the hype created on modern IT solutions including Cloud, Big Data, social and mobility, the adoption is only slowly improving in the country. This was revealed on Monday by Zinnov, a market expansion and globalization advisory firm in its Quarterly IT Deal Tracker for India Market with aggregated insights on IT deals in India between Q1 2011 to Q3 2012.
The tracker captured 500 IT deals in the enterprise and SMB segment and highlighted key trends which have shaped the domestic IT spending across industry verticals like Manufacturing, BFSI, Government, Telecom, IT- ITeS, Education, Retail, Travel & Logistics and Energy & Utilities.
While Cloud and managed services deals saw some traction, other forms of modern IT saw a slow response in the last 7 quarters. Foreign multinationals dominated the IT deals market in the last 7 quarters. Oracle, SAP, IBM and Microsoft featured as top principal vendors with 33% share in all enterprise deals and 36% share in all SMB deals. IT services deals were largely driven by systems integration, infrastructure management and managed services as new use cases in verticals like BFSI, telecom, energy/ utilities continued to emerge.
The Manufacturing, BFSI, Government, IT-ITeS and Education featured as top five verticals accounting for 80% of the total IT deals between Q1 2011 to Q3 2012. Verticals such as retail, travel & logistics and Energy saw rapid growth, while telecom companies continued to invest into total outsourcing.
Indian customers increased their focus on IT solution purchase as 44% of all deals during this period were structured as software & solutions deals. Services deals accounted for 44% of share, whereas Hardware specific deals accounted for a small 12% share in the total number of deals. With 31% of all deals, SMB market is starting to evolve in India from an IT consumption standpoint. Nearly 50% of all SMB deals were also structured as solution deals.
“With 30% growth in the number of IT deals every year, India has become a key market of focus for most of the IT companies worldwide. India currently has over 3,500 public listed companies, and about 10 million SMBs which can potentially consume technology which is a very big opportunity to tap into. Accordingly, IT companies are now focusing on account mining for large enterprises and channel restructuring for better penetration in the SMB space. The next few quarters will witness lot of companies design new IT solutions and validate fitment of existing solutions for India market,” said Praveen Bhadada, director, market expansion, Zinnov.
The study further examines the trends across the following industry verticals:
Manufacturing: ERP, CRM and SCM related deals accounted for 39% of all solutions deals in manufacturing. SMBs accounted for 38% of all deals which was higher than the industry average of 31%. SAP, Microsoft & IBM demonstrated leadership in the space with 49% of deal share among foreign MNCs.
BFSI: BFSI deals were largely driven by banking solutions enhancements across the board. Modern IT deals formed a significant share in all BFSI capturing a 44% deals share. Cloud and managed services accounted for 35% of all deals in BFSI. IBM, Oracle & VMware demonstrated leadership in this space with nearly 30% share among foreign MNCs.
Government: IT adoption push in the government is currently driven through large ministries and government bodies, which contribute to around 87% of all deals. Managed services in Data Centre Setup, large government projects such as UID etc., emerged in modern IT consumption. Hardware firms such as Acer & Lenovo were key vendors in the Government departments, while Oracle & IBM won IT infrastructure deals in this space.
IT-ITeS: IT/ITeS was another key vertical for Modern IT consumption, with 46% of all deals being Modern IT deals. A majority of new applications and solutions adopted by IT/ITES have been on the Cloud with CRM, E-Mail solution being the fast movers. Contact Centre Solutions, CRM/ERP, HR and Testing solutions were some of the other fast moving categories. Microsoft and Oracle emerged as key leaders in the IT-ITeS industry with 54% of all deal share among foreign MNCs.
Education: Both the K-12 Education sector as well as Higher education, witnessed a good number of deals. While school management / e-classroom solutions were the most prevalent deals in the K-12 sector, cloud offerings saw traction in the higher education segment. Microsoft, Oracle and Educomp emerged as clear leaders in the education space controlling more than 2/3rd of all deals
Retail: Modern IT was key IT consumption area for retail firms, constituting almost 45% of all retail deals. Cloud based customer experience solutions emerged as the key theme of investments. HR solutions, BPM and ERP/ CRM were the other popular solution categories in retail. Oracle, Microsoft and Kronos emerged as key leaders in this space
Energy & Utilities: A large share of all solution deals was focused on ERP/ CRM/ SCM related solutions. Interestingly, business analytics also was a popular solution segment in this vertical. SAP, IBM and Dassault Systems emerged as key MNC players, while Newgen featured as the key Indian ISV in this space
Travel & Logistics: Significant push was observed from midsized logistics firms for business management solutions such as ERP/CRM and also niche logistics & freight management software. On the infrastructure side, ports & airports also modernized IT systems in security, business process streamlining & customer handling. Softlink Global along with SAP & IBM emerged as key leaders in this space
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