Market Trends of India Software Services Export Industry
Increasing Demand For Infrastructure Modernization, Digital Support, and Cloud Services
- Infrastructure Modernization delivers organizations with faster ways to do business. Powerful technologies offer new capabilities and better insights. It enables a company to build and run the applications that underpin its business. It includes computing, network, workplace, and data platform capabilities.
- According to IBEF, in the Union Budget 2023-24, the IT and telecom sector allocation stood at INR 97,579.05 crore (USD 11.77 billion). In addition, the Indian government recently launched the Meghalaya Enterprise Architecture Project (MeghEA) to expand service delivery and administration in the state by leveraging digital technologies to make Meghalaya a high-income state by 2030. Government initiatives may further drive market growth.
- According to official data, India's technology industry revenue is estimated to be USD 245 billion in FY 2023. Technology exports, at USD 194 billion, are expected to grow 9.4% in reported currency terms. Regarding FDI equity inflow, the computer software and hardware sectors attracted the highest FDI in FY 2021-22. Additionally, the BFSI, telecom, and healthcare sectors have been particularly lucrative for IT companies.
- Further, as of March 2022, the Ministry of MSMEs (Micro, Small, and Medium Enterprises) reported India possesses more than 7.9 million MSMEs, compared to about 6.5 million registered previously. This shows how the number of MSMEs increased rapidly in India, making it a highly potential market for IT implementations.
- In addition, in June 2022, Vi Business, a business of telecom operator Vodafone Idea (Vi), launched ReadyforNext, a dedicated program curated to help MSMEs increase their growth potential. The Vi Business ReadyforNext program is based on the perspective of holding hands with MSMEs throughout their digital journey. The product supports MSMEs' digital adoption efforts while helping them digitally secure their businesses in the new era of remote work. Such initiatives leverage the IT and telecom demand in the country.
- Furthermore, according to a poll by Yotta Data Service Pvt. Ltd, approximately 63% of Indian firms had their digital infrastructure in the cloud in 2022. Additionally, on-premise recorded 23% and 14% third-party co-location. Such developments in the studied segments may further prople the market growth.
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IT Services Expected to Capture Significant Market Share
- Many countries have long exported IT work to developing economies like India to save on labor costs. With the country housing many major IT service export players, the demand for IT services export is expected to gain significant momentum in the coming years.
- Further, in the wake of digital transformation worldwide, companies are rapidly upgrading their legacy IT infrastructure, thus creating demand for IT consulting and implementation services. Digital transformation provides companies with a strategic and competitive advantage in determining IT Services and their importance, and further organizes the IT services as an activity of plan-build-run framework and defines IT Service strategy to the organization.
- In addition, companies that choose IT consulting operations can keep 24-hour customer service and technical support lines open and operate with professionals in different time zones than the customer calling in the complaint. The landscape of IT services is changing rapidly. The proliferation of advanced technologies, like big data and machine learning in various end-user industries, fuels the need for updated IT infrastructure. Enterprises across different end-user verticals need help to balance their IT infrastructure and cost management. In addition, the adoption of emerging technologies that are expected to grow exponentially as businesses look to replace outdated infrastructure. The need to replace obsolete hardware is another factor driving the IT services segment's growth.
- Due to advancements in IT operation across the cloud-based platform, IT services have become more data-driven and real-time, creating greater value for the business, especially in operational efficiency, business opportunity discovery, and remote access optimization.
- In addition, IT service providers are indulging in partnerships with various end-user companies to assist them with advanced technology implementation. For instance, in February 2022, Infosys, a global player in next-generation digital services and consulting, collaborated with Qualtrics, the creator of the Experience Management category. Infosys has launched a Qualtrics center of excellence to bring solutions on Qualtrics to the market. These solutions are a part of Infosys Cobalt cloud offerings and help clients improve their customer, employee, and supplier experiences.
- Further, in March 2022, HCL Technologies DRYiCE and LogicMonitor, a SaaS-based observability and IT (information technology) operations data-sharing platform for companies and MSPs, created a strategic partnership (managed service providers). LogicMonitor and DRYiCE from HCL Technologies will offer an end-to-end solution for automated IT incident remediation. It will assist in guaranteeing business service continuity and customer experience innovation in the contemporary digital economy.
- According to Invest India, India's business process management industry is significant because it is one of the most prominent outsourcing destinations for IT organizations worldwide. In the fiscal year 2022, the information technology sector contributed around 7.4 % of the country's GDP. BPM is more of a discipline than a process because it includes methods for improving, analyzing, automating, and improving business processes.
