India 2011 basks in 'solidification' of 2010

India will see major IT trends from 2010 such as green IT and cloud computing continue to gather momentum amid optimism that the 2011 will bring new innovation and growth, industry players say.

"We are optimistic about 2011," Sudip Nandy, CEO of communications technology vendor Aricent, told ZDNet Asia in an e-mail. As the macroeconomic environment further improves, Nandy expressed hopes to see significant spending on innovation and new applications of technology.

Ananadan Jayaraman, chief product and marketing officer at Connectiva Systems, concurred. "It will be a year of rapid growth for the business with significant activity in emerging markets, particularly, India, Southeast Asia, Eastern Europe and Latin America."

"We believe the U.S. market will continue to be soft and will take longer to return to robust growth," Jayaraman added. He noted that Connectiva, a revenue management software vendor, expects customers to be increasingly demanding and to expect vendors to take full responsibility for business outcomes and work with them on risk-reward models.

Surajit Sen, director of channels, marketing and alliances for NetApp India, said: "We'll see the same economic conditions and the same major IT themes in 2011. It will be a year of solidification and increased adoption of some key trends that began in 2009 to 2010."

For instance, Sen noted, most, if not all, companies would have adopted a "virtualize first" policy for new applications.

Green IT is also likely to gather momentum with businesses in India continuing to energy-efficient technologies to reduce costs and provide various environmental benefits.

"This trend will grow further in 2011, alongside increased use of business efficiency solutions and asset and infrastructure consolidation," said Vipin Tuteja, executive director of marketing and international business, Xerox India. He also expects businesses to develop more collaborative work environments which seek to optimize the use of cloud.

Sen added: "There will be even more talk about cloud IT services, though, buyers are still cautious. There will be a lot of talk about hybrid clouds."

He noted that over the last couple of years, Indian IT companies also have begun to explore opportunities in markets such as Mexico, Ireland, Netherlands, Philippines and Brazil. This trend will continue in 2011 as companies continue to diversify their business from core markets such as the United States and United Kingdom.

According to Dun & Bradstreet (D&B), service providers are expected to sharpen their focus on India's domestic market to tap imminent growth opportunities offered by the country's booming economy.

"The rapid growth in the domestic market is likely to be driven by major government initiatives such as increased spending on e-government and increased thrust on technology adoption, and upgrades across various government departments to bridge the digital divide," the D&B statement said.

The business research firm noted that the Indian IT-BPO (business process outsourcing) industry is expected to adopt the inorganic growth route in order to widen its service offerings and enter new geographical markets.

It added that several third-party and captive BPO units are likely to acquire small companies to ramp up revenue, acquire clients and expand business segments and geographical reach. "Consolidation will also be driven by international M&A (merger and acquisition) deals, propelled by robustness of the Indian players," it said.

Growth driven by 3G, BWA
According to research firm IDC, the launch of 3G and BWA services is expected to boost the demand for more gadgets across India.

Sumanta Mukherjee, lead PC analyst at IDC India, said the PC market this year will be redefined by the introduction of 3G services and service bundling with existing and new PC form-factors, increase in functionalities in mini-noteboook PCs and wider adoption of IT in the education sector.

Aricent's Nandy said: "I am very upbeat about communications since operators are rapidly adopting technologies like LTE, and devices and application vendors are constantly competing to deliver compelling user experiences to the consumers."

Jayaraman also pointed to telecommunications, media and entertainment to provide continued growth, driven by innovation in mobile, tablets and on-demand video. "Utilities is another segment where we expect to see increased IT investments driven by smart grids," he said. "We also expect banking and insurance sectors to come back very strongly this year.

End of tax holiday may hit firms
However, the uncertainty over whether tax holiday will be extended after March 2011 could slow down expansion plans of several Indian IT companies.

D&B said: "Large companies would be able to alleviate the tax burden arising from the expiry of tax holiday by moving into SEZs (special economic zones). However, small companies, which form the bulk of the companies registered with STPI (Software Technology Parks of India, will find it hard to survive as they are still struggling post-global recession and do not have the financial resources to face this challenge."

Swati Prasad is a freelance IT writer based in India.