Indian services to hit US$12.8B by 2013

Driven by infrastructure services, country's domestic IT services market set to double between 2008 and 2013, according to Springboard report.
Written by Victoria Ho, Contributor on

India's IT services market is set to double over a five-year period, between 2008 to 2013, to hit US$12.8 billion, according to a new research note released Wednesday.

According to Springboard Research, the country's domestic IT services industry is expected to grow at a CAGR (compound annual growth rate) of 18.6 percent from 2008 to 2013, driven primarily by India's infrastructure services segment, worth US$7.2 billion, which will account for 53 percent of the overall market.

Within infrastructure services, hosting is marked for the highest growth rate over the predicted period, followed by enterprise outsourcing, network integration and network management.

The report also highlighted the application services segment as the fastest-growing, at a CAGR of 19.6 percent. IT consulting services will account for the smallest share at 5 percent, growing at a CAGR of 16.4 percent.

Sudip Saha, Springboard's senior research analyst for services, noted in the report: "[India's overall IT services market is] on par with international levels in terms of average gross margin, and provides immense opportunity to the vendors."

Saha added that vendors should focus on raising efficiency through reusable tools, templates and replicable models, in order to meet customer expectations.

Top verticals to be served by the country's services market are the banking, financial services and insurance (FSI) sector, followed by the public sector and telecoms.

Phil Hassey, vice president of services research at Springboard, added in the report: "With industries such as the public sector, healthcare, energy and utilities, and transportation and logistics stepping up their IT spending, the appeal for the Indian domestic market has increased tremendously and is drawing the attention of domestic and multinational IT service providers."

According to a recent Ovum report, fellow Asian powerhouse, China, may not be able to catch up with India in the IT services industry for the near future.

The lack of big Chinese IT services players to rival the likes of India's Tata Consultancy Services or Infosys would see the country's sector dominated by Western and Indian outsourcing vendors, Ovum said.

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