OF (PESTEL ANALYSIS OF INDIAN IT SECTOR)

SUBMITTED BY:Name- Mohammad Abbas Regd. No- 10906034 Roll. No.- RS1904A24

GUIDED BY: Mr.. Vishwas chakranarayn

SUBMITTED TO Department of management Lovely Professional University Phagwara

ACKNOWLEDGEMENT I take this opportunity to present my vote of thanks to all those guidepost who really acted as lightening pillars to enlighten our way throughout this project that has led to successful and satisfactory completion of this study. We are really grateful to our COD Mr.Devdhar shetty for providing us with an opportunity to undertake this project in this university and providing us with all the facilities. We are highly thankful to Mr.vishwas chakranarayan for his active support, valuable time and advice, whole-hearted guidance, sincere cooperation and pains-taking involvement during the study and in completing the assignment of preparing the said project within the time stipulated. Lastly, We are thankful to all those, particularly the various friends , who have been instrumental in creating proper, healthy and conductive environment and including new and fresh innovative ideas for us during the project, their help, it would have been extremely difficult for us to prepare the project in a time bound framework. Name - MOHAMMAD ABBAS Regd.No 10906034 Roll no. RS1904A24

INDEX
ABSTRACT KEYWORDS INTRODUCTION ROLE OF IT INDUSTRY. MARKET STRUCTURE......... IT SERVICES, ENGINEERING SERVICES, R&D AND SOFTWARE PRODUCTS IT INDUSTRY IN INDIA ......... PESTLE ANALYSIS OF IT SECTOR .......... POLITICAL FACTOR ... ECONOMICAL FACTOR SOCIAL FACTOR . TECNOLOGICAL FACTOR .. LEGAL FACTOR . ENVIRONMENTAL FACTOR

CONCLUSION BIBLOGRAPH ..

ABSTRACT :Information Technology is what constitutes the most important sector in the present day trend of carrying out business. It is because you cannot be present everywhere to monitor the work, but with networking and communications, you can always stay in contact with the other business sites of yours. With time and the continuous growth across the world, the country continued struggling and came up as the world leader in Information Technology Sector. The industry has grown up to US $ 5.7 billion (including over $4 billion worth of software exports) in 1999-2000, with the annual growth rate not sliding below 50 percent since 1991. Today, the term information has ballooned to encompass many aspects of computing and technology, and the term has become very recognizable. IT professionals perform a variety of duties that range from installing applications to designing complex computer networks and information databases. A few of the duties that IT professionals perform may include data management, networking, engineering computer hardware, database and software design, as well as the management and administration of entire systems. KEYWORDS:-

Computer-aided engineering (CAE) and Finite element analysis (FEA) Computer-aided manufacturing (CAM) including instructions to Computer Numerical Control (CNC) machines Photo realistic rendering Document management and revision control using Product Data Management (PDM).

INTRODUCTION INFORMATION TECHNOLOGY (IT), as defined by the Information Technology Association of America (ITAA), is "The study, design, development, implementation, support or management of computer-based information systems, particularly software applications and computer hardware." IT deals with the use of electronic computers and computer software to convert, store, protect process, transmit, and securely retrieve information. When computer and communications technologies are combined, the result is information technology, INFOTECH ". Information Technology (IT) is a general term that describes any technology that helps to produce, manipulate, store, communicate, and/or disseminate information. When computer and communications technologies are combined, the result is information technology, or "infotech". Information technology is a general term that describes any technology that helps to produce, manipulate, store, communicate, and/or disseminate information. Presumably, when speaking of Information Technology (IT) as a whole, it is noted that the use of computers and information are associated. Today, the term information technology has ballooned to encompass many aspects of computing and technology. IT professionals perform a variety of duties that range from installing applications to designing complex computer networks and information databases. A few of the duties that IT professionals perform may include data management, networking, engineering computer hardware, database and software design, as well as the management and administration of entire systems. Owing to its easy accessibility and the wide range of IT products available, the demand for IT services has increased substantially over the years. The IT sector has emerged as a major global source of both growth and employment. It exports software and services to nearly 95 countries around the world. The share of North America (U.S. & Canada) in Indias software exports is about 61 per cent

ROLE OF IT INDUSTRY The IT industry can serve as a medium of e-governance, as it assures easy accessibility to information. The use of information technology in the service sector improves operational efficiency and adds to transparency. It also serves as a medium of skill formation.

Economies of scale for the information technology industry are high. The marginal cost of each unit of additional software or hardware is insignificant compared to the value addition that results from it. Unlike other common industries, the IT industry is knowledge-based. Efficient utilization of skilled labor forces in the IT sector can help an economy achieve a rapid pace of economic growth. The IT industry helps many other sectors in the growth process of the economy including the services and manufacturing sectors. MARKET STRUCTURE GLOBAL & INDIAN SCENARIO : Global Sourcing Trends The fundamental contribution of information technology is the expansion of knowledge, which is necessarily accompanied by a reduction in uncertainty. This becomes relevant for market structure in several ways. IDC estimates that in 2008, the worldwide IT market growth will be lower at about 5.5-6.0 per cent, mainly due to the economic slowdown in the US and elsewhere. IT-BPO services grew at an above-sector-average rate of nearly 8 per cent and remained the largest category, accounting for an increasing share of the worldwide technology sector revenue aggregate. Outsourcing continued to be the primary growth driver, sustained by gradual shifts in regional spending patterns with increasing traction in Europe and Asia Pacific offsetting a marginal decline in share of the Americas. IT spending in the BRIC countries - Brazil, Russia, India, and China is expected to grow by 16 per cent in 2008, reaching USD 115 billion. Other emerging economies (based on 10%+ growth rates and the greatest net-new IT spending potential in the next four years) include Mexico, Poland and Turkey, followed by Vietnam, Thailand, Saudi Arabia, Argentina, Colombia, and United Arab Emirates. Green IT is expected to be an important highlight during 2008. According to the Green IT Survey conducted by IDC, over 50 per cent consider suppliers greenness when buying IT, almost 80 per cent think the importance of greenness as an IT buying consideration is growing, and over one-third have policies that favor green vendors. 2008 will see the introduction of green products (energy-efficient, spaceefficient, materials efficient, regulatory-compliant) that will create meaningful differentiation and move market share. IT SERVICES, ENGINEERING SERVICES, R&D AND SOFTWARE PRODUCTS IT Services involves a full range of engagement types that include consulting, systems integration, IT outsourcing/managed services/hosting services, training and support/maintenance.

IT services (excluding BPO, Engineering Services, R&D and Software products), contributing to 57 per cent of the total software and services exports, remains the dominant segment and crossed USD 23 billion, a growth of 28 per cent in FY2008. The segment is witnessing a noticeable shift from projects towards multi-year outsourcing-based relationships; remote infrastructure management is emerging as a key growth driver. Future Outlook: With small and midsized businesses driven by the increased use of technology the country's information and communication technology market is estimated to grow 20.3 per cent annually to reach US$ 24.3 billion by 2011. A survey carried out to assist business heads of major outsourcers to identify reliable, innovative and tech savvy firms had listed twenty-nine India based companies amongst the best 100 IT service providers including Tata Consultancy Services, HCL Technologies, Genpact, and WNS Global Services amongst others. According to the global InfoTech analyst International Data Corporation, the Indian IT and ITeS market is estimated to grow at the rate of over 16 per cent to become a US$ 132 billion industry, significantly, the domestic market alone is expected to become over US$ 50 billion, with a CAGR of about 18.4 per cent. Simultaneously, the IT and ITeS exports are estimated to more than double to US$ 78.62 billion in 2012. Sufficient demand, strong fundamentals and a favorable environment support a positive outlook for Indian IT-BPO exports as well as the domestic market, going forward. The Indian IT-BPO industry is on track to reach USD 60 billion in exports and USD 73-75 billion in overall software and services revenue, by 2010. At the aspired levels of growth, the sector would, by 2010, employ around 2.5-3 million Professionals, directly, account for direct investment of about USD 10-15 billion, and contribute 7-8 per cent of the national GDP. However, the scope of the opportunity is significantly larger. At USD 52 billion (excluding hardware), India accounts for around 4 per cent of the worldwide spend on IT software and services. The global sourcing penetration is estimated to be growing at nearly four times the rate of absolute technology spends. Together, these two trends signify a huge opportunity for the Indian IT-BPO industry. In order to sustain Indias edge in the global markets and improve revenues, Indian IT-BPO service providers need to shift towards more market-facing breakthroughs. They could additionally, foray new customer segments in intellectual asset-intensive service lines like engineering and R&D services, creating IP in emerging technology areas, developing and codifying specific domain expertise to target consulting and system integration services, technical innovations to develop their own standards for next generation of technologies. Finally, providers could enhance the role they are already playing in helping improve the quality of education, by working closely with the Government and academia to

facilitate changes in the curriculum and pedagogy, which directly influence the quality of graduate output. Why India? Inspired by the Indian IT-ITES success story, several other locations have been presented as alternate options for offshore outsourcing. However, feedback received from several MNCs having multi-country operations as well as syndicated analyses comparing the various sourcing locations has revealed that India continues to offer and deliver the best bundle of benefits sought from global sourcing. With significant potential still untapped, it is expected that the global sourcing phenomenon will continue to expand in scope, scale and geographic coverage. As global delivery matures, multi-location strategies will become the norm and most sourcing destinations, including emerging locations, will grow in size. Building on its existing strengths, India will remain the leading destination and will continue to play an important role in most global sourcing strategies. Strengths Large Human Resource:Every year, approximately 19 million students are enrolled in high schools and 10 million students in pre-graduate degree courses across India. Moreover, 2.1 million graduates and 0.3 million post-graduates pass out of India's non-engineering colleges. While 2.5-3 percent of them find jobs in other fields or pursue further studies abroad, the rest opt for employment in the IT industry. If the flow from high schools to graduate courses increases even marginally, there will be a massive increase in the number of skilled workers available to the industry. Even at current rates, there will approximately be 17 million people available to the IT industry by 2008. Indian Education System The Indian education system places strong emphasis on mathematics and science, resulting in a large number of science and engineering graduates. Mastery over quantitative concepts coupled with English proficiency has resulted in a skill set that has enabled the country to take advantage of the current international demand for IT. Quality Manpower Indian programmers are known for their strong technical skills and their eagerness to accommodate clients. In some cases, clients outsource work to get access to more specialized engineering talent, particularly in the area of telecommunications. India also has one of the largest pools of English-speaking professionals. Strengths at a Glance Great history in software development English Language proficiency Government Support and policies Cost advantage Strong tertiary education Process quality focus

Skilled workforce Expertise in new technologies Entrepreneurship Reasonable technical innovations Reverse brain drain Existing long term relationships Creation of global brands BPO & Call center offerings Expansion of existing relationships Chinese domestic & export market Leverage relationships in West to access overseas markets Indian domestic-market growth IT INDUSTRY IN INDIA The Indian information technology sector has been instrumental in driving the nation's economy onto the rapid growth curve. According to the Nasscom-Deloitte study, the IT/ITES industry's contribution to the country's GDP has increased to a share of 5.2 per cent in 2007, as against 1.2 per cent in 1998. Further, the IT and BPO industries are poised to clock revenues worth US$ 64 billion by the end of fiscal year 2008, registering a growth of 33 per cent with exports expected to cross US$ 40 billion and the domestic market estimated to clock over US$ 23 billion, according to a study. Simultaneously, the Indian IT services market is estimated to remain the fastest growing in the Asia Pacific region with a CAGR of 18.6 per cent, as per a study by Springboard Research. India's IT growth in the world is primarily dominated by IT software and services such as Custom Application Development and Maintenance (CADM), System Integration, IT Consulting, Application Management, Infrastructure Management Services, Software testing, Service-oriented architecture and Web services. A report by the Electronics and Software Export Promotion Council (ESC) estimates software exports to register a 33 per cent growth in the current financial year with export figures during FY 2008 expected to reach US$ 45 billion. The country's IT exports have, in fact, come quite far, starting from a few million dollars in the early 1990s. The Government expects the exports turnover to touch US$ 80 billion by 2011, growing at an annual rate of 30 per cent per annum. POLITICAL FACTORS:This is political factors which affect a business which can be government rules and regulation toward that particular business environment. For IT industry the Indian political structure is stable, but there are fears of hung parliament due to a lack of clear majority in parliament creating fear of wrong investing in the minds of investor thereby reducing capital. U.S government has declared that U.S firm that outsource IT works outside the U.S will not get tax benefits, this has caused reduction in U.S BPO contract from the U.S in the last fiscal year thereby reducing revenue from the U.S. Indian government has decided to contract IT job to Indian IT companies creating more opportunities for the company and the industry at large. In software development different countries is configuration rules and regulation are considered since client demand differs because of different system requirement. NASSCOM and DELIOTTE study (impacting economy and society 2007/2008), states that Indian government has strengthened the IT act, 2000 to provide a sound legal environment

for companies to operate related to security of data in transmission and storage etc this has served as a positive factor. Infosys has to put Indian relationship with different countries of business into consideration before investing. Other factors to be considered are customer protection law, competitive regulations, and terrorist attacks. POLITICAL STABILITY: _ India suffered political instability for a few years due to the failure of any party to win an absolute majority in Parliament. However, political stability has returned since the previous general elections in 1999. However, political instability did not change India's economic course though it delayed certain decisions relating to the economy. The political divide in India is not one of policy, but essentially of personalities. Economic liberalisation (which is what foreign investors are interested in) has been accepted as a necessity by all parties including the Communist Party of India (Marxist). Thus, political instability in India, in practical terms, posed no risk to foreign direct investors because no policy framed by a past government has been reversed by any successive government so far. You can find a comparison in Italy which has had some 45 governments in 50 years, yet overall economic policy remains unchanged. Even if political instability is to return in the future, chances of a reversal in economic policy are next to nil. As for terrorism, no terrorist outfit is strong enough to disturb the state. Except for Kashmir in the north and parts of the north-east, terrorist activity is either nonexistent or too weak to be of any significance. It would take an extreme stretching of the imagination to visualize a Bangladesh-type state-disrupting revolution in India or a Kuwait-type annexation of India by a foreign power. Hence, political risk in India is practically non-existent. Likewise the IT sector does not have any influence of political stability on industry. And if the govt. changes there is little effect on the industry of that political step. ECONOMICAL FACTORS These includes factors affecting IT industry ranging from rising working pay, global recession, competition, contract availability and fee. Domestic IT spending grew by 20% and reached $20 billion in 2009. Currency fluctuations caused by the devaluation of the dollar has affected the industry during the last global recession. Real estate prices decline resulted in rental expenditure forcing customer to leave luxuries goods such as electronic and computers that need software to work. Recession cause low attribute rate due to job layouts and job cuts. India economic attraction has helped in convincing investors due to low cost advantage. With Indias global IT spending yet to decline due to entry of new IS companies and the cause of the recession. With clients industry faced with reduction of work force due to job layoffs and unsuitable balance sheet most companies have decided not to make much expenditure in purchase, but make optimum use of existing facilities to make

profits. Most debtors with financial crisis have been granted more time to pay up causing large debt deficit. With the decline of banking and financial sectors, the revenue from there is expected to decline, hurting the bottom line of IT majors DOMESTIC IT SPENDING:India's domestic IT market will grow around 14% this year, showing a minor decline as compared to last year's growth of 16-18%. Hence, it is expected that the country will see a minor decline in IT budget coming from its domestic market. "Compared to other countries, India is in a better position. Its domestic market is expected to grow around 14% this year. We also expect that IT spend in India will see a minor decline as compared to last year. There could be some 2-3% decline as compared to last year's budget," commented Arup Roy, senior research analyst at Gartner. GLOBAL IT SPENDING:Indian enterprises spending on information communications and technology (ICT) in 2005 is expected to grow at more than twice the rate in the Asia Pacific region. Enterprise spending in the Asia Pacific (APAC) on hardware next year will rise 6.3 per cent to $36.9bn, with software increasing 12.4 per cent to $5.6bn while telecom will grow 7.5 per cent to $132.5bn and IT services will gain 8.4 per cent to $33.6bn. In India, of the $22.88bn spend in 2005 on enterprise ICT, $3.34bn is the projected spend on hardware, an increase of 21.1 per cent over 2004; $0.52bn (16.4 per cent increase) on software; $16.7bn (15.5 per cent increase) on telecom and $2.32bn (18.3 per cent increase) on IT services. India will remain the highest growth market for telecommunications with around 35 million new subscribers in 2005, an 18 per cent increase from 2004, with the growth occurring in selected technologies mainly mobile. This accounts for almost one fourth of the new subscribers forecasted in Asia Pacific. Consumer segment is rapidly gaining importance, driven by adoption of mobile services. This is reflected in their increased contribution towards spending for telecommunication services, from 35 per cent in 2002 to 43 per cent in 2005. By 2008 the consumer segment will account for more than half of telecommunications spending, the report said. Gartner also said that open source and offshore IT services will continue to grow, while it warned global IT vendors to take emerging competition from China seriously with at least three Chinese IT companies becoming significant global competitors by 2010. The growth in offshore BPO services outpaces the growth in global sourcing of IT services. Offshore component of global BPO services spend is expected to grow from $3 billion (2.4 per cent of total markets spend of $124 billion in 2004) to $24 billion (15 per cent of the total markets spend of $161 billion in 2007). REAL STATES PRICES :Decline in real estate prices has resulted reducing the rental expenditure thus the industry will grow if the real estate price goes down. ATTRITION:-\ Almost every sector in India is facing high rates of attrition these days. A recent

study revealed that employees leave either because of compensation reasons or due to better growth opportunities. According to NASSCOM, Indian IT-ITES industry recorded US$ 39.6 billion in revenues in 2006-07. The revenue of US$ 49-50 billion has been projected in 2007-08 at a growth rate of 24-27 per cent. The IT industry's contribution to GDP was 4.8 per cent in 2005-06 Though the IT/ITES sector is booming, it is constantly facing high attrition rates of 25% - 30%. Even the big brands are also facing the same problem. Below are the details of attrition rates of various players in IT sector. According to the survey conducted by BES and Data Quest, Sierra Atlantic recorded highest attrition rate (29%) followed by Kanbay with 25% and Accel Frontline with 20 per cent. ECONOMIC ATTRACTION:There is a lot of economic attraction towards IT sector due to low cost advantage and other factors. India, with its low cost advantage and emergence of several private players, represents the fastest growing market. Further the geographical location of India serves it the advantage of being exactly halfway round the world from the US west coast, which is another reason why India is preferred destination of many big brands. Indias development and contribution in worlds information technology sector is of highest reputation. Cities like Bangalore have become the favorite(most preferred) destinations of all the big banners like HSBC, Dell, Microsoft, GE, Hewlett Packard, and several Indian multi national firms like Infosys Technologies, Wipro, and Microland who have set up their offices in the city. It is because the city offers good infrastructure, with large floor space and great telecom facilities. This can be judged on the basis of the high growth statistics of India and the changing outlook of the companies towards India. It is because of this growth many popular brands that have not yet build up there rigid offices in the country are making it fast to have a destination in India too. For example, Sun Microsystems, a global IT major, announced in Bangalore to double the present workforce of the company's Sun India Engineering Center (IEC) from the present 1000 to 2000 in the next two years time. IEC, which is the largest R&D center for Sun outside the US, would also focus on developing products in India to suit the needs of the Indian market, which would be benchmarked globally. Also, the presence of a large number of Indians, especially engineers, in the US gave India an easy entry into the US software market. SOCIAL FACTORS These are social factors affecting IT industry which ranges from employee right, language barriers, race nationality of company or other issues. English language being widely spoken in India has help in fostering the industrys relationship and interaction in India and on the global stage. India is one of the few countries to have an increasing share of working population, since there is great availability of both skilled and unskilled labour force. Great number of institute and universities offer IT

course creating room for availability of IT professional at lower cost since there is job competition. India has to produces great numbers of IT professional each year to meet its demand. India continue to produce IT professionals each year, this has help industry for IT professionals inwards. Industries have to consider the type of services the software is meant for, age difference of users, life style of the different countries of supply. It should be noted that there will always be difference in client behaviours which is supported by the fact that different customers have different taste. SOCIAL ISSUES;Should Industry be concern with the issue of global warming? Yes it is affected by many government laws regarding it like in china, where company with great amount of carbon emission are charge great amount of tax. Likewise being a major player in the global IT market Infosys has introduces measure to help in the reduction of carbon emission by trying to reduce its water consumption, electricity utilization, carbon emission and partnering with other companies in troubleshooting this global dilemma.. EDUCATION:There are large number of universities and institutes in India offering IT education. And there are large numbers of students which everyear passed these courses and join the IT industry. The Indian labor is not only cheap but is technically skilled too to the world class level. It is due to the Indian Education System that includes in its course curriculum the practical knowledge of the latest technology that is developed in world along with the fluency in English Language that imparts compatibility in an Indian technician to communicate and work throughout the world.

CAREER PROSPECTS In the year 2006-07, the industry hired approximately 3, 80,000 people. Out of these, the ITeS sector hired 2, 00,000 people and the rest were taken by IT sector. The recruitment trends of some IT giants are given below: TCS- 35,000 Infosys30,000 Wipro-28,000 Satyam-20,000 Some of the areas of specialization in the IT Industry areDesigning Research and Development in Peripheral Integration Product Quality Control and Reliability Testing Computer Manufacturing Maintenance Service System Developing /Programming /Software Engineering Networking Application Programming EDP/ E- Commerce Enterprise Resource Planning (ERP) Database Warehousing and Management

Operating jobs, Computer operators, Data Entry WORKING AGE POPULATION:Working age population also affects the industry a lot because every person has different value, lifestyle, attitude, and also the satisfaction level. TECHNOLOGICAL FACTORS;TELEPHONY Cellular mobile telephony tariffs in India are the lowest in the world. A comparison of Indian cellular tariffs vis--vis the tariffs prevailing in comparative emerging economies in South America & Asia-Pacific region, clearly brings out the affordability of Indian cellular mobile telephone services. The airtime tariffs have plunged by over 75% in the last three years alone. According to the TRAI, the average monthly rental and airtime being realized for cellular services stands at Rs. 202 and Rs. 1.99 per minute respectively. Prepaid services have been introduced by all operators at an extremely affordable tariff of Rs. 300 per month. Roaming charges have been cut by 70% down from Rs.10 to Rs.3 in early 2002 and now to as low as Rs. 1.50 by several service providers. EXPECTED TO HAVE TOTAL SUBSCRIBER BASE OF ABOUT 500 MILLION BY 2010. APRU FOR GSM IS USD 6.6 MONTH. INDIA HAS THE SECOND LARGEST TELEPHONE NETWORK AFTER CHINA. TELEDENSITY - 19.86 % ENTERPRISE TELEPHONE SERVICES, 3G, WI-MAX AND VPN ARE POISED TO GROW. INTERNET India had as on September 2008 45.3 million active internet users. This is an internationally accepted benchmark for enumerating internet users. Urban users continue to dominate internet use contributing to 42 million of the 45 million odd users. In September last 2007, the number of active internet users in urban India was 32 million showing a year on year growth of a little more than 30 per cent. NEW IT TECHNOLOGY:With the evolution of SOA and semantic web services, enterprise solution heeds to the limitations of conventional enterprise systems by providing data convergence and concept reutilization with intelligence. Web2.O represents the next transition in the evolution of web applications; they promise to restore the richness, interactivity and usability lacking in many web applications. As with any technological transition, for an enterprise this implies that

there are new opportunities to be explored and new challenges to be negotiated. To maximize the benefits of Web2.O, an enterprise should assess. SOA has benefited enterprises with benefits such as standardized patterns, interoperability, centralized governance, easy integration etc. Almost all industry domains have benefited from SOA strategy in order to build more flexible and malleable IT architecture involving re-usable services. On the other hand, Web 2.0 practices like communities and folksonomy are much centered around end-users. They involve frequent communication among large consumers dispersed all around the world over the Internet. They have become extremely popular among internet users. This brings the interesting idea of bringing enterprise products i.e. services and consumer-savvy applications from Web 2.0 together. CAD:Computer-aided design (CAD) is the use of a wide range of computer-based tools that assist engineers, architects and other design professionals in their design activities. It is the main geometry authoring tool within the Product Lifecycle Management process and involves both software and sometimes special-purpose hardware. Current packages range from 2D vector based drafting systems to 3D solid and surface modellers. CAD is sometimes translated as "computer-assisted", "computer-aided drafting", or a similar phrase. Related acronyms are CADD, which stands for "computer-aided design and drafting", CAID for Computer-aided Industrial Design and CAAD, for "computer-aided architectural design". All these terms are essentially synonymous, but there are a few subtle differences in meaning and application. CAD was originally the three letter acronym for "Computer Aided drafting" as in the early days CAD was really a replacement for the traditional drafting board. But now is the term is often interchanged with "Computer Aided Design" to reflect the fact that modern CAD tools do much more than just drafting. Current Computer-Aided Design software packages range from 2D vector-based drafting systems to 3D solid and [[Freeform surface mo |surface]] modellers. Modern CAD packages can also frequently allow rotations in three dimensions, allowing viewing of a designed object from any desired angle, even from the inside looking out. Some CAD software is capable of dynamic mathematic modeling, in which case it may be marketed as CADD computer-aided design and drafting. CAD is used in the design of tools and machinery and in the drafting and design of all types of buildings, from small residential types (houses) to the largest commercial and industrial structures (hospitals and factories). CAD is mainly used for detailed engineering of 3D models and/or 2D drawings of physical components, but it is also used throughout the engineering process from conceptual design and layout of products, through strength and dynamic analysis of assemblies to definition of manufacturing methods of components. It can also be used to design objects.

CAD has become an especially important technology within the scope of computeraided technologies, with benefits such as lower product development costs and a greatly shortened design cycle. CAD enables designers to lay out and develop work on screen, print it out and save it for future editing, saving time on their drawings. The people that work in this field are called: Designers, CAD Monkeys, Automotive Design Engineers and Digital Innovation Engineers. Computer-aided design is also a common work activity for the traditional engineering professions Software technologies A CAD model of a mouse originally software for Computer-Aided Design systems was developed with computer languages such as Fortran, but with the advancement of object-oriented programming methods this has radically changed. Typical modern parametric feature based modeler and freeform surface systems are built around a number of key C (programming language) modules with their own APIs. A CAD system can be seen as built up from the interaction of a graphical user interface (GUI) with NURBS geometry and/or boundary representation (B-rep) data via a geometric modeling kernel. A geometry constraint engine may also be employed to manage the associative relationships between geometry, such as wireframe geometry in a sketch or components in an assembly. Unexpected capabilities of these associative relationships have led to a new form of prototyping called digital prototyping. In contrast to physical prototypes, which entail manufacturing time and in the design Hardware and OS technologies Today, CAD systems exist for all the major platforms - CAD systems like QCad, NX provide multiplatform support including Windows, Linux, UNIX and Mac OS X; ArchiCAD and Vectorworks work on both Windows and Mac OS X, but not on Linux; and, for example, AutoCAD works on Windows only. For more information on OS compatibility, see Comparison of CAD editors for AEC, Comparison of CAD editors for CAM and Comparison of CAD editors for CAE. Catia V5 is supported on Sparc Solaris but not x86 Solaris, HPUX, and AIX, but not Linux. It has been announced that Catia V6 will only be supported on one proprietary operating system. Right now, no special hardware is required for most CAD software. However, some CAD systems can do graphically and computationally expensive tasks, so good graphics card, high speed (and possibly multiple) CPUs and large amounts of RAM are recommended. The human-machine interface is generally via a computer mouse but can also be via a pen and digitizing graphics tablet. Manipulation of the view of the model on the screen is also sometimes done with the use of a spacemouse/SpaceBall. Some systems also support stereoscopic glasses for viewing the 3D model. The Effects of CAD

Starting in the late 1980s, the development of readily affordable Computer-Aided Design programs that could be run on personal computers began a trend of massive downsizing in drafting departments in many small to mid-size companies. As a general rule, one CAD operator could readily replace at least three to five drafters using traditional methods.[citation needed] Additionally, many engineers began to do their own drafting work, further eliminating the need for traditional drafting departments. This trend mirrored that of the elimination of many office jobs traditionally performed by a secretary as word processors, spreadsheets, databases, etc. became standard software packages that "everyone" was expected to learn. Another consequence had been that since the latest advances were often quite expensive, small and even mid-size firms often could not compete against large firms who could use their computational edge for competitive purposes.[citation needed] Today, however, hardware and software costs have come down. Even highend packages work on less expensive platforms and some even support multiple platforms. The costs associated with CAD implementation now are more heavily weighted to the costs of training in the use of these high level tools, the cost of integrating a CAD/CAM/CAE PLM using enterprise across multi-CAD and multiplatform environments and the costs of modifying design work flows to exploit the full advantage of CAD tools There are many producers of the lower-end 2D systems, including a number of free and open source programs. These provide an approach to the drawing process without all the fuss over scale and placement on the drawing sheet that accompanied hand drafting, since these can be adjusted as required during the creation of the final draft. 3D wireframe is basically an extension of 2D drafting. Each line has to be manually inserted into the drawing. The final product has no mass properties associated with it and cannot have features directly added to it, such as holes. The operator approaches these in a similar fashion to the 2D systems, although many 3D systems allow using the wireframe model to make the final engineering drawing views. 3D "dumb" solids (programs incorporating this technology include AutoCAD and Cadkey 19) are created in a way analogous to manipulations of real world objects. Basic three-dimensional geometric forms (prisms, cylinders, spheres, and so on) have solid volumes added or subtracted from them, as if assembling or cutting realworld objects. Two-dimensional projected views can easily be generated from the models. Basic 3D solids don't usually include tools to easily allow motion of components, set limits to their motion, or identify interference between components. 3D parametric solid modeling require the operator to use what is referred to as "design intent". The objects and features created are adjustable. Any future modifications will be simple, difficult, or nearly impossible, depending on how the original part was created. One must think of this as being a "perfect world" representation of the component. If a feature was intended to be located from the center of the part, the operator needs to locate it from the center of the model, not, perhaps, from a more convenient edge or an arbitrary point, as he could when using "dumb" solids. Parametric solids require the operator to consider the consequences of his actions carefully.

LEGAL ASPECTS AND POLICIES This speedy growth of IT Sector is undoubtedly due to the efforts of Indian government and the other developments that took in the other parts of the globe. IT Act 2000: The arrival of the Internet and the World Wide Web made it possible for people to communicate and transact over cyber space. It was a revolutionary step for humanity, but it also created a significant need for the regulation and governance of these activities, a requirement that lead to the creation and implementation of cyber laws across the globe. India became the 12th nation in the world to adopt a cyber law during 2000. From the perspective of e-commerce in India, the IT Act 2000 and its provisions Contain many positive aspects. Firstly, the implications of these provisions for the ebusinesses would be that email would now be a valid and legal form of communication in our country that can be duly produced and approved in a court of law. Companies shall now be able to carry out electronic commerce using the legal infrastructure provided by the Act. Digital signatures have been given legal validity and sanction in the Act. The Act throws open the doors for the entry of corporate companies in the business of being Certifying Authorities for issuing Digital Signatures Certificates. The Act now allows Government to issue notification on the web thus heralding egovernance. The Act enables the companies to file any form, application or any other document with any office, authority, body or agency owned or controlled by the appropriate Government in electronic form by means of such electronic form as may be prescribed by the appropriate Government. The IT Act also addresses the important issues of security, which are so critical to the success of electronic transactions. The Act has given a legal definition to the concept of secure digital signatures that would be required to have been passed through a system of a security procedure, as stipulated by the Government at a later date. Under the IT Act, 2000, it shall now be possible for corporate to have a statutory remedy in case if anyone breaks into their computer systems or network and causes damages or copies data. The remedy provided by the Act is in the form of monetary damages, not exceeding Rs. 1 crore.

Indian Copyright Act: The copyright of computer software is protected under the provisions of Indian Copyright Act 1957. Major changes to Indian Copyright Law were introduced in 1994 and came into effect from 10 May 1995. Copyright Act clearly explained: The rights of a copyright holder Position on rentals of software The rights of the user to make backup copies Most importantly the amendments imposed heavy punishment and fines for infringement of copyright of software. Income Tax Deduction under sections 10A/ 10B of Income tax Act, 1961 (IT Act) in respect of profits derived from export of computer software. Following undertakings are eligible to claim deduction in respect of profits derived from export of computer software under the provisions of sections 10A/ 10B of the IT Act: Existing units which commenced operations prior to April 1, 2000 and claimed deduction under the provisions of erstwhile sections 10A/ 10B, can continue to claim such deduction under the provisions of newly substituted sections 10A/ 10B for the unexpired period of ten consecutive assessment years. Deduction would continue to be available in case of corporate re-organisations by way of amalgamation or demerger. Depreciation on computers and computer software at 60 percent As per the provisions of the IT Act, annual depreciation on computers and computer software can be claimed at the rate of 60 percent of written down value at the beginning of the relevant financial year for income tax purposes. Therefore, under the written down value method, 84 percent of cost of computers and software can be depreciated in first 2 years. IT SEZ REQUIREMENTS :IT companies can set up SEZ with minimum area of 10 hectares and enjoy a host of tax benefits and fiscal benefits. Software Technology Parks of India (STPI), is a society set up by the Department of Communication & Information Technology, Government Of India in 1991, with the objective of encouraging, promoting and boosting the Software Exports from India. Companies operating in software technology park (STPI ) Scheme will continue to get tax benefit till 2010. STPI maintains internal engineering resources to provide consulting, training and implementation services. Services cover Network Design, System

Integration, Installation, Operations and maintenance of application networks and facilities in varied areas ranging from VSATs to ATM based networks. Setting up of the Software Technology Parks of India (STPI), by the Ministry of Information Technology, Government of India and the International Technology Park in a joint project by the State Government, the TATA Group and the Singapore Consortium to promote and facilitate the software exports is another major step towards the growth of Indian Information Technology Sector. Similarly an industrial park, known as Electronic City , was set up in 1991 takes more than a hundred electronic industries including Motorola, Infosys, Siemens, ITI, and Wipro, in an area of around 330 acres. The Export Promotion Industrial Park , built near International Technology Park , gives an exclusive 288 acres of area for export oriented business. GE has its India Technology Center located at this park and employs hundreds of multi disciplinary technology development activities. The other promotional activities that brought up India to this position include the IT Corridor project. Conceptualized by Singapores Jurong Town Corporation Private Ltd, the IT corridor Project was initiated by the Department of IT and the Bangalore Development Authority in order to develop state of the art facilities for the development of knowledge based industries. Thus India is a perfect solution for all those companies which seek for cheap, yet technically skilled labor who have innovative minds and state of art to work over a project. The ample of facilities provide in a perfect working conditions. For rest, cyber laws are there to monitor and safeguard everyone's interest related to IT sector. All these reasons contribute for India to be as the most adored destination to many companies.

ANTI MONOPOLY LAWS: _ From the 1950s, IBM had a virtual monopoly of computers in India. The 360 series release in 1960s was the major workhouse of the large organizations. They even maintained a chain of programmers who could write down software's for their machines. However in 1978, when George Fernandes, ministry of industries at that time, commanded IBM to take local shareholders into its subsidiary, the company refused strictly and went back after winding up its all operations in India. Its exemployees then set up Computer Maintenance Corporation, with the primary object of maintaining IBM computers. IBM puts India on cloud computing map Global computing giant IBM on September 24, 2008 launched a "cloud computing" centre in Bangalore, putting the country on the world map in an emerging area that takes information technology one step closer to being a utility service like electricity

or water with users sharing a common set of hardware and software and paying only what they use. What add more to the dominance of India in Information Technology Sector is the government policies like the enactment of cyber laws to protect and safeguard the interest of software companies in India. In the latest in Indian IT Sector, a five-city security seminar hosted by Microsoft Corporation India Pvt. Ltd is scheduled to take place around mid 2005. It will concentrate on representatives from the IT professional, developer, government, academic and the system integrator and ISV community. The basic motivation behind it will be to help them to systematize and standardize a comprehensive security framework that is essential for the protection of their IT investments. ENVIRONMENTAL FACTORS:Environmental conservation and protection is an issue which has gained prominence because of deteriorating environmental balance which is threatening the sustainability of life and nature. Largely, business is also held responsible for such situations as emissions from industries polluting the air, excessive chemical affluents drained out in water making it poisonous and unfit for use, usage of bio nondegradable resources affecting the bio-chain adversely and exposure of employees to hazardous radiations bring their life in danger. All these have been taken very seriously by different stakeholders in the society including the government and legislations and movements are creating pressure for an environment friendly business. These have far reaching implications for business ranging from the kind of business, the product being manufactured, how it is manufactured and how friendly it is for mankind and nature. ENERGY EFFICIENT PROCESS AND EQUIPMENTS:Companies are focusing on reducing the carbon footprints, energy utilization, water consumption etc. CONCLUSION:Information technology (IT) or information and communication technology (ICT) is a broad subject which deals with technology and other aspects of managing and processing information, especially in large organizations. Particularly, IT deals with the use of electronic computers and computer software to convert, store, protect process, transmit, and retrieve information. Over the past 20 years, its prevalence has dramatically increased so that it is now a part of nearly every aspect of daily life.

REFERENCES;http://www.financialexpress.com/news/domehttp://en.wikipedia.org/wiki/Information_t echnology http://www.economywatch.com/business-and-economy/information-technologyindustry.html http://www.lotsofessays.com/viewpaper/1689137.html http://www.scribd.com/doc/13886309/Information-technology-IT-sector-INDIA-Indirainstitute-of-management-Pune http://www.nasscom.org/Nasscom/templates/NormalPage.aspx?id=54612 http://www.nagsoft.com/Why_India.asp http://www.nasscom.org/Nasscom/templates/NormalPage.aspx?id=6169 http://www.afact.org/include/getfile.php?fid=596 http://www.nasscom.in/Nasscom/templates/NormalPage.aspx?id=6250stic-it-marketto-grow-lower-at-14/486332/ http://www.imrbint.com/media/45..pdf