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Vertical Research

August 3, 2009
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Vertical Research:
The business environment around us is changing rapidly and business leaders are under increasing pressure to cope with this dynamic macro-environment. The IT strategies of companies are also witnessing corresponding shifts, realignments and modifications in order to stay competitive, gain market share or reach out to new markets.

INDIA Industry Verticals:

India Overall Trends in IT Spending by Industry Vertical 2007-2011:

IT usage has gradually moved from simple product sales to solution sales, which encompass hardware, software & services built together to meet a particular objective of the organization. This space is growing faster than the average industry growth rate. With time, the maturity of solutions specific to a particular industry segment is only going to increase.
The total IT spending in India was estimated to be US$13,879 million in 2006 and this is expected to increase at a compound annual growth rate (CAGR) of 16.2% during the forecast period to reach US$29,362.1 million by 2011. Banking, financial services, and insurance and manufacturing are the two highest-contributing sectors in the IT market in India in 2006. However, the government and education, retail, telecommunications, utility, and healthcare sectors are fast catching up and are going to be the biggest drivers of the IT market in India throughout the forecast period. This trend is forecast after analyzing the expansion and automation phase that these verticals are currently in India.

India manufacturing Trends in IT Spending by Industry Vertical 2007-2011:

The total manufacturing IT spending in India was US$1,922.5 million in 2006 and is expected to increase at a compound annual growth rate (CAGR) of 15.6% throughout the forecast period to reach US$3,975.7 million by 2011. The manufacturing IT market will get a major boost from the software segment, which is forecast to increase at a CAGR of 18.2% from US$234.6 million in 2006 to US$540.7 million by 2011. The software segment’s share (12.2%) of the total manufacturing IT market in 2006 is forecast to grow to 13.6% by 2011. On the other hand, the hardware market is forecast to increase at a CAGR of 16.4% from a market share of 38.6% in 2006 to 39.9% by 2011. The India manufacturing industry considers IT as an enabler. It is looking to leverage IT to increase investments in innovations, infrastructure improvement, distribution channel development, and research and development (R&D) to match current and future growth prospects. The key IT solutions that are finding increased usage in the India manufacturing industry are networking, supply chain management (SCM), enterprise resource planning (ERP) solutions, storage solutions, customer relationship management (CRM), sales force automation (SFA), product life-cycle management (PLM), data warehousing (DW), and business intelligence (BI). These are the technologies on which the maximum IT spending is expected to focus on throughout the forecast period.

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