A report recently published by the International Data Corporation (IDC) talks about favourable signs in the IT industry of India. According to IDC’s report “India IT Market Overview Report – 2012”, the total IT market in India is expected to grow to $43.57 billion in 2012 from $37.46 billion (Rs 2.09 lakh crore) in 2011.
‘IDC estimates the Indian IT market to be in the region of $38b in 2012, with double digit growth forecast for the next 5 years. It is thus a market difficult to ignore for technology companies as well as global and Indian venture capital and private equity funds seeking alpha returns,’ says the report.
The reason behind this growth, the report goes on to say, are the twin factors of increased spending by Small and Medium Enterprises (SMEs) and a shift in the landscape of demand across the world. Investors are fully willing to back people in their ventures, seeing the current favourable climate. However, the prevailing financial and economic conditions will mean that any investment will be subject to the most stringent of checks.
According to the report, 38 per cent of the enterprise IT spending in 2011 was by the SME segment, which is expected to grow to 43 per cent by 2015.
“Market driven policies pertaining to e-Governance, financial inclusion and youth-driven entrepreneurship are enabling rural development,” says Ravi Sharma, IDC India Research Manager (Consulting Group). “Political initiatives are increasingly driving demand for IT hardware.”
What does this all mean?
Basically, the implication of the report is that enterprises, particularly SMEs, are in a position to exploit the market to its fullest despite the recession. Various mavericks are founding companies dealing with providing services to Indians. Investors have realised the potential behind these initiatives and have begun to put their money behind them.