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With strong govt at Centre, India’s software market revives

India’s domestic software market showed signs of revival in the first six months of 2014, growing 10.7% over a year ago. 

According to a research by market consultancy firm International Data Corporation (IDC), growth came on the back of a few major deals won by big companies. These deals were in the pipeline since early 2013 but did not materialise earlier because of economic and political uncertainties. 

“With the Bharatiya Janata Party (BJP) forming the government at the Centre after a sweeping win in the general elections, there was some positivity in the market that reflected in the information technology (IT) investments by major verticals like BFSI (banking, financial services and insurance), manufacturing, retail and e-commerce,” IDC said in a note on Monday.
Microsoft, with a 31.8% share, continued to dominate the market in the first half of the year. It was followed by Oracle and SAP, which controlled 12% and 6.5% of the market, respectively. While IBM’s market share was 5.5% share, a little more than 40% was accounted for by numerous small players.

IDC expects the software market to grow at a stable pace in the next five years (up to 2018), with a healthy annual rate of 10.5%. Some of the areas that are expected to see high software uptake are mobile application development & mobile device management, security software (related to third platform), system software, analytics and engineering applications.

Some government initiatives, such as Mobile Seva, Digital India and Pradhan Mantri Jan Dhan Yojana, will be instrumental in triggering adoption of software solutions in the coming years. Over the next two to three years, launch of various other projects is also expected to increase penetration of IT-backed sectors like manufacturing, retail, travel & tourism and BFSI.

“Customers of large as well as small & medium businesses are looking at ways to curb their capital expenditure. They are keen to embark on the cloud journey. So, the vendors are making their licensing policies more flexible and easier, so that existing customers could smoothly transition to a cloud environment,” said Shweta Baidya, senior market analyst (software) at IDC India.

“Some vendors are offering exchange schemes to their customers under which they buy back hardware in exchange for a cloud set-up. These are resonating very well with the small and medium businesses,” Baidya added.

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