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IT Sector In India

INTRODUCTION
What is IT????

As defined by INFORMATION TECHNOLOGY ASSOCIATION OF AMERICA (ITAA) “IT” is the “study, design, development, implementation, support or management of computer based information system particularly software's applications & computer hardware

What is ITES???
ITES is INFORMATION TECHNOLOGY ENABLE SERVICES. It is defined as outsourcing of processes that can be enabled with IT & covers areas like FINANCE, HR , ADMINISTRATION.... etc.

Comparative contribution Of IT & ITeS in different sectors
25%
21% 22%

20%
15%
11% 11%
14% 15%

10%
6%

5% 0%

Indian IT-BPO Industry
• FY2012 is a landmark year – while the Indian IT-BPO industry weathered uncertainties in the global business environment, this is also the year when the industry is set to reach a significant milestone – aggregate revenue for FY2012 is expected to cross USD 100 billion. • Aggregate IT software and services revenue (excluding hardware) is estimated at USD 88 billion.

Impact on India's Growth
• IT-BPO sector has become one of the most significant growth catalysts for the Indian economy. • The industry has played a significant role in transforming India’s image from a slow moving bureaucratic economy to a land of innovative entrepreneurs and a global player in providing world class technology solutions and business services

Domestic IT-BPO
• Domestic IT-BPO revenue (excluding hardware) is expected to grow at almost 17 per cent to reach Rs 918 billion in FY2012. • Strong economic growth, rapid advancement in technology infrastructure, increasingly competitive Indian organizations, enhanced focus by the government and emergence of business models that help provide IT to new customer segments are key drivers for increased technology adoption in India

Global Sourcing
• In the face of the volatility in economic environment and currency, 2011 recorded steady growth for the technology and related services sector, with worldwide spending exceeding USD 1.7 trillion, a growth of 5.4 per cent over 2010. • Software products, IT and BPO services continued to lead, accounting for over USD 1 trillion – 63 per cent of the total spend.

Future Outlook
• Despite 2011 ending in a difficult economic environment, some geographic regions and services are expected to circumvent the situation in 2012. • Global GDP, after growing by 2.7 per cent in 2011, is expected to grow 2.5 per cent in 2012, with developing economies growing thrice as fast as the developed economies.

IT Services
• Over the years, Indian IT service offerings have evolved from application development and maintenance, to emerge as full service players providing testing services, infrastructure services, consulting and system integration.

Engineering & R&D Services (ER&D)
• The engineering design and products development segments generated export revenues of USD 10 billion in FY2012; growing by about 14 per cent, driven by increasing use of electronics, fuel efficiency norms, convergence of local markets, and localized products.

Software Products
• The past few years have witnessed a noticeable shift in the Indian software product business ecosystem which has helped create an enabling environment for the growth of Indian software products. • Increased adoption of IT by enterprises is driving growth. Increasing IT adoption in India has also helped in creating a sizeable product business market opportunity locally.

Quality
• Quality: An increasing number of IT-BPO companies continue to adopt global standards such as ISO 9001 (for Quality Management) and ISO 27000 (for Information Security). India based centres account for the largest number of quality certifications achieved by any single country. • Over the last three years, there has been an 18 percent increase in the number of IT-BPO companies acquiring quality certifications; 30 percent increase in performance certifications; 20 percent increase in security certifications. Most companies who have acquired quality certifications have invested in acquiring level 4 and 5 certifications exhibiting greater sophistication.

The Information Technology sector can broadly be classified into:
• 1. IT- Software – These companies help in developing and implementation of different software for their clients worldwide. These software could be for documentation, security services, banking softwares etc. • 2. ITeS Business process outsourcing (BPO) – Major Corporations across the world outsource their back-office operations to some companies. E.g. Employee payroll for a US company’s global workforce is maintained by an Indian BPO. Slowly the definition is expanding to Human resources, accounting, logistics, legal processes etc.

• 3. IT- Hardware and peripherals - The stuff you can actually see and touch, and would likely break if you threw it out a fifth-story window, is hardware. This would include laptops, desktops, Storage devices, Networking devices, LCD, printers etc. • 4. IT- Education This segment provides training for employment in the other segments. This would include companies providing various certification courses, like Java, Oracle etc. These companies also provide training for employees in corporate sector. Recently, some companies have also expanded this service to cater to schools and colleges.

Domestic Market
• Though the IT-BPO sector is export driven, the domestic market is also significant. The revenue from the domestic Software & Services market is estimated to have grown from US $ 2.6 billion in 2001-02 to US $ 12.4 billion in 2008-09 a CAGR of about 22.2 per cent.

Segment wise Domestic Revenue Trends in IT – ITES Industry
Year/ Item IT Service ITeS-BPO

2001- 02 2002- 03 2003- 04 2004- 05 2005- 06 2006- 07 2007- 08 2008- 09 CAGR 2.1 0.1 2.4 0.2 3.1 0.3 3.5 0.6 4.5 0.9 5.5 1.1 7.9 1.6 8.3 1.9 19.5 44.5

Software Products, 0.4 Engineering Services

0.4

0.4

0.7

1.3

1.6

2.2

2.2

23.7

Total IT-ITeS 2.6

3.0

3.8

4.8

6.7

8.2

11.7

12.4

22.2

Employment • The total IT Software and Services employment is estimated to touch 2.20 million in 2008-09, as compared to 0.52 million in 2001-02. This represents a net addition of 1.68 million to the industry employee base since 2001-02

Employment in IT-ITeS Industry
Year/ Item 2001- 02 2002- 03 2003- 04 2004- 05 2005- 06 2006- 07 2007- 08 2008- 09

IT Services & 0.17 Exports

0.21

0.30

0.39

0.51

0.69

0.86

0.92

BPO Exports 0.11 Domestic Market

0.18

0.22

0.32

0.42

0.55

0.70

0.79

0.25

0.29

0.32

0.35

0.38

0.38

0.45

0.50

Total 0.52 Employment

0.67

0.83

1.06

1.29

1.62

2.01

2.21

Related Organizations
• National Association of Software and Services Companies (NASSCOM) The National Association of Software and Services Companies (NASSCOM) established in 1988 is a not-for-profit Indian consortium with more than 1200 members created for promoting and espousing the cause of the country's Information Technology and BPO industries. The members include both Indian and MNCs with a presence in India. NASSCOM's initiatives include maintaining India's leadership position in the global sourcing IT industry, plan and sustain continued IT industry growth by enabling industry to tap into emerging areas and to strengthen the domestic market in India. For ore information visit http://www.nasscom.org/

• Software Technology Parks (STPs) Software Technology Parks of India was set up in 1991 as an Autonomous Society under the Department of Information Technology. STPI renders statuary services for the Software exporting community with incubation facilities, training and value added services, etc. Exports made by 51 STPI registered units during 2008-09 is INR 215571 Crores about 90% of total software exports from the Country. For more information visit http://www.stpi.in/ • MAIT Manufactures Association of Information Technology MAIT, set up in 1982 for scientific, educational and IT industry promotion has emerged as an effective, influential and dynamic organisation, representing actively Hardware, Training, Design/R&D and the associated services sectors of the Indian IT Industry, The organisation's special focus is on domestic market development and attracting foreign investment in the Indian IT Industry.

TOP 10 IT Companies
1. Tata Consultancy Services TCS - The largest IT company in India with revenues over USD 10 billion and profits surpassing USD 2.2 billion, Tata Consultancy Services (TCS) is a global IT giant. It has close to 250,000 employees and is one of the top three global IT companies. 2. Cognizant American multinational IT company has become one of the power houses of the Indian IT industry scene with revenues of USD 6.1 Billion 2011 and 2012 first quarter USD 1.71 Billion.

3. Wipro With a global presence in over 54 countries and a revenue crossing USD 7.2 billion, Wipro is undoubtedly one of the leading IT services and outsourcing companies. Under the leadership of Azim Premji, the company has galloped to become one of the biggest IT companies. 4. Infosys A USD 7 billion revenue company, which has offices in over 30 countries, Infosys is easily one of the top IT companies in India. It offers business consulting, IT consulting solutions and has a workforce strength of over 150,000 employees

5. HCL Technologies With revenues of over USD 3 billion, HCL Technologies is one of the biggest names in the Indian IT sector. It offers engineering, BPO, EAS, IT infrastructure etc services to Indian as well as global clients
6. Tech Mahindra With a net income of over USD 128 million, Tech Mahindra is a leading networking and BPO solutions provider based in India. The company has a strong workforce comprising of over 42,000 employees

7. Mphasis A USD 1 billion company, Mphasis is a part of HP. Founded by Jaithirth Rao and Jeroen Tas, Mphasis has its presence in over 14 countries providing IT solutions to businesses. 8. iGate Patni IGate Patni based in Bangalore, is now a subsidiary of iGate having its international presence in India, Australia, US, Mexico, Brazil, UK, Germany and many more. It boasts of revenues of around USD 430 million

9. L&T infotech With a strong revenue of around USD 650 million, Mumbai based Larson and Tubro Infotech is one of the leading IT companies and BPO solutions provider. Alliances with Microsoft, SAP, Oracle etc make it a force to reckon with. 10. Oracle Financial Services iFlex Oracle Financial Services, formerly known as iFlex Solutions, it a major IT player in the Indian market. With a revenue of nearly USD 520 million, and a strong backing of Oracle, it is undoubted one of the strongest companies in the IT solutions for the banking sector