WAZIR

INDUSTRY
O ERVIE
INFORMATION TECHNOLOGY

© Wazir- The Strategy & Consulting Club, IIM Rohtak

 Industry Overview - IT
In November 2021, Mr. Piyush Goyal, Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles lauded the Indian IT sector for excelling its
competitive strength with zero government interference. He further added that service exports from India had the potential to reach US$ 1 tn by 2030

Industry Insight
Market size of IT industry in India (US$ billion)
20 The IT industry added 4.45 lakh new employees in India’s IT export revenue rose by 11.4% in constant E R&D and SP **

19.93 FY22, bringing the total employment in the sector currency terms to US$ 194 bn in FY23. The export 23%

to 50 lakh employees of IT services has been the major contributor,

accounting for more than 51% of total IT export
15

By 2025–2026, India is expected to have 60–65 mn BPM engineering and R&D (ER&D) and software
jobs that require digital skills. Additionally, the IT- products exports accounted for 20.78% each of
10
BPM* services revenue reached US$ 194 bn in FY21 total IT exports during FY21. ER&D market was

54%
expected to grow to US$ 42 bn by 2022
6.96
5 Spending on information technology in India is BPM
expected to reach US$ 144 bn in 2023. Software exports by the IT companies connected 23%

Additionally, India’s digital economy is estimated to it stood at US$ 16.29 bn in the first quarter of
0 to reach US$ 1 tn by 2025 FY22
2021 2025
Sector-wise breakup of export revenue
*Business Process Management ** Engineering Research & Development and Software Products (FY19)

Giant Companies

Source: India Brand Equity Foundation © Wazir- The Strategy & Consulting Club, IIM Rohtak
 Industry Overview - IT
The cloud market in India is expected to grow three-fold to US$ 7.1 bn by 2022 with the help of the growing adoption of big data, analytics, artificial intelligence, and Internet of
Things (IoT). Additionally, Artificial Intelligence (AI) is expected to boost India's annual growth rate by 1.3% by 2035

BFSI and IT demand around the world

RoW
Revenue share of IT majors from BFSI (FY20) APAC
40% BFSI is a key business vertical for the IT and The US has traditionally been the biggest 7.6%
2.2%

Business Process Management (BPM) industry. A importer of Indian IT exports, as it absorbed over
major share of revenue of IT majors comes from the 61.73% of Indian IT & BPM exports during FY21 Europe
30% 11.5%
BFSI business vertical
The adoption of new technologies is expected to The US and the UK were the leading customer
20% accelerate the growth of the BFSI vertical. For eg., markets with a combined share of nearly 79%.
HDFC Bank has partnered with Flywire to enable However, there is a growing demand from APAC,
15.3% 20.4% 29.7% 29.7% 31.3% 27.6% their customers to make fee payments digitally to Latin America, and MEA regions
10% UK
USA
overseas colleges and universities 16.9%
61.7%

The need for undertaking investment in IT will also Being the low-cost exporter of IT services, India is
0%
be required to gain a competitive advantage going to attract more markets in other regions in
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instead of solely reducing operational costs

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Geographic breakup of export revenue in

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FY21 (%)

Market Segmentation & Accelerating demand for cloud

India data centre market investment (US$

Market Segmentation The pandemic has driven the demand for 8 billion)

cloud services worldwide. This has accelerated 8

hyper-scale data center investments, which are
6
Service Development Size End Use Region expected to exceed US$ 200 bn per year by 2025

The cumulative investments in data centers in

BFSI 4
India are estimated to reach US$ 28 bn between
Tele-
Managed Services communication North America 2019-25, at a CAGR of 5%, 2x faster than 3.4
Small and Medium
Project Oriented Cloud Healthcare Europe the global average
Enterprises 2
Services On-premise Retail Asia-Pacific
Large Enterprises
Support Services Manufacturing Rest of the world
The demand for cloud technology professionals is
Government
Others expected to reach 2 mn by 2025 0
2019 202
5

Source: India Brand Equity Foundation © Wazir- The Strategy & Consulting Club, IIM Rohtak
 Industry Overview - IT
Technology is developing at an extreme pace and according to Gartner, global IT investment would increase by 5.1% from 2022 to US$4.6 tn in 2023. Traditional IT components such
as communications services, IT services, devices, software, and data centre infrastructure are all included in Gartner's assessment, with the service categories making up the largest
portion of the market

Key Trends Key Drivers

Combat Cyber-security
The Indian Computer Emergency Response Team (CERT-In) released directives in April 2022 to improve the nation's
cybersecurity
Data annotation and Global delivery
Cloud Platform New technologies Talent pool
labelling hub model




In a report released by Microsoft, the consulting firm Bain & Co., and the industry group Internet and Mobile Association
In FY20, the market for data

was valued
annotation in India
By 2025, it is anticipated that

products
the Indian software

To get a competitive edge

over other industry players,
Disruptive technologies like

cloud computing, social media,

of India (IAMAI), India is ranked third in the world for the percentage of AI talent it creates, at 16%
at US$ 250 mn, with the US

for over market would be worth US$

key firms concentrate on

and data analytics are giving IT

market accounting 100 bn. Indian businesses are differentiating their cloud companies new opportunities Policy Support

Due to an
60% of the total. concentrating
on making products and
platforms.

for expansion across industries.

increase in local demand for
AI, the industry is anticipated
to reach US$ 7 bn by 2030
investments abroad to
broaden their worldwide reach
and improve their global
delivery hubs
By 2026, significant cloud use
could create 14 million new
jobs and boost India's GDP
US$ 380 bn
In 2020, the market for SMAC
(social, mobility, analytics, and
cloud) was valued at US$ 225
bn
Policy support has created a system that is more open to new ideas, seed money, and ease of doing business. The
Indian government announced plans to establish a national AI portal and to start a national AI programme. The
amount allotted for the IT and telecom sector in the Union Budget 2022–23 was US$11.58 bn
The government established the Software Technology Park (STP) Scheme, a 100% export-oriented programme
for creating and exporting computer software, including exporting expert services via physical or electronic medium

Global Uncertainities Government Initiatives

China's supply chain threat
China is the primary source of hardware for large computer companies' servers, storage, and networking devices. Tech
CEOs should think about looking into other nations for manufacturing and sourcing due to the supply chain threat
posed by China's COVID issues and ongoing trade tensions
Global economic instability
The issues facing the IT industry will probably get more difficult due to the unpredictability of the global economy. Due
to conflicts like the Russian invasion of Ukraine and geopolitical unrest in Asia, the IT sector may experience service
interruptions, the insolvency of key suppliers, elevated product costs, and decreased global sales in the months to come
AI workforce scaling
The industry cannot fulfill the tremendous demand created by the rapid expansion of AIML while using its current
approach of employing new hires, training them, and then deploying them on a big scale
Environmental, Social, Governance (ESG) transparency
Customers and investors are demanding greater transparency from businesses on ESG issues. The Indian IT industry is
under pressure to improve its sustainability and ethical practices
The "Synergy" Cyber Security Exercise for 13 countries to strengthen network resilience
"Synergy" Cyber Security against ransomware attacks was successfully planned and executed in August 2022 by the
Exercise Indian Computer Emergency Response Team (CERT-In) and the Cyber Security Agency of
Singapore (CSA)
To improve the quality of internet services in the state of Uttarakhand, the government
Internet Exchange
introduced Internet Exchange in November 2021
The Ministry of Electronics and Information Technology (MeitY) hosted a workshop in
Connecting all Indians September 2021 on the topic "Connecting all Indians" to encourage public and private
stakeholders' interest in the nation and increase internet connectivity in rural regions
In order to improve service delivery and governance in the state and turn Meghalaya into a
Meghalaya Enterprise
high-income state by 2030, the Indian government launched the Meghalaya Enterprise
Architecture Project
Architecture Project (MeghEA) in September 2021

Source: India Brand Equity Foundation, Hindustan Times © Wazir- The Strategy & Consulting Club, IIM Rohtak
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