The economy of India, the world’s IT powerhouse, witnessed temporary stagflation last year. The continuous wave of COVID-19 and the increase in infections are deteriorating the economy and forcing companies to adopt cost-cutting measures in their IT departments as well. The sector witnessed a high turnover rate of 8.03% between April and June this year.
However, despite the slowdown in the financial ecosystem, there were some positives to the blockade by state. With the pandemic, companies around the world have increased their investment in their digital infrastructure. The IT sector will account for 8% of India’s GDP in 2020, a significant increase from the 1.2% contribution in 1998. In 2019-20, India occupied the position of the world’s largest supplier in the IT-BPM industry.
Increasing demand
Gartner predicts that IT spending in India will reach up to $ 98.5 billion by 2021. With the imposition of pandemic isolation of homes, more and more people began to access digital services from their homes. IT departments have always responded to these demands by providing enterprises with online services to achieve their goals.
“India is trying to create large-scale employment opportunities in the IT / BPM sector with technologies such as civil development, AI and cloud.”
— Ram Singampalli, COO, Hexaware Tech
As a result, the demand and confidence in this sector has enabled companies such as Cognizant, Infosys, Wipro, Tanla Solutions and HCL Tech to achieve digital expansion and increased revenue. In addition, Tech Mahindra grew by 39.2%, with net income of Rs 1,353.2 in the first quarter of 2021-202. Wipro saw Tata Consultancy Services grow 18.5% and revenue growth 22.3%.
According to the latest Naukri JobSpeak report, India’s employment market grew 57% year-on-year as of September. In particular, the IT / software sector grew 138% (year-on-year). In addition, employment increased by 82% and 70%, respectively, in the retail and hospitality industries, with increased technical intervention and a gradual resumption after Covid. As digital innovation grows, so does the scope of job creation and acquisition.
Global expansion
With one of the largest developer communities in the world and diversification across sectors such as BFSI, retail and telecommunications, India has received significant investment from other countries as well. According to the Software Technology Parks of India (STPI), software exports also increased by 7% from $ 62.82 billion in 2020 to $ 67.40 billion in 2021. The computer software and hardware sector finally received an FDI influx worth $ 71.05 billion. 20 years. In addition, it accounted for 44% of the total FDI inflow of $ 81.72 billion in 2021. Leading Indian companies also provide blockchain and artificial intelligence to innovation hubs and research centers.
“For tech companies, the key to success will continue to be their ability to respond to market needs in real time.”
— Cygnet Infotech, Founder and Director, Niraj Hutheesing
Some notable international cooperation includes Infosys’ recent partnership with renowned providers of US-based natural gas compression services, Archrock and Inc. Infosys plans to increase the efficiency of field service technicians through the assimilation of digital tools. Separately, Tata Consultancy Services has also decided to collaborate with Virgin Atlantic Airlines in the United Kingdom for 17 years to digitize the airline’s operations.
SaaS outlook
In addition to the digital services and cloud computing that lead IT innovation, the growth of the software industry as a service in India has been predicted to have immense potential in promoting our economic development. rice field. According to reports from McKinsey and Saas Boomi, the industry is projected to be worth $ 1 trillion by 2030. Indian Saas companies such as Freshworks and Salesforce are just two such many Indian Saas companies, startups and unicorns.
“SaaS start-ups need to develop solutions for underserved segments. Instead of focusing solely on technology elements, they need to invest in the right GTM strategy.”
— Precision Infomatic, CEO, Mathew Chacko
Last year, Saas companies received an investment worth about $ 1.5 billion. With relatively low hiring costs in India, a growing preference for software engineering, and a wealth of developers in this area, India could dominate the sector in the next few years. However, given that the Indian startup community has a long way to go when compared to foreign startup ecosystems like Silicon Valley, the commitment to build discipline remains. We sought.
According to a Bain & Company report, some Indian SaaS companies such as Browserstack and Chargebee are comparable to US SaaS companies in terms of capital efficiency. Obviously, Indian SaaS companies have a great deal of interest in diverse VCs.
Policy support
Growth in the IT sector needs to be supported by encouraging government initiatives and policies. The government has already taken various steps in this direction with the introduction of industry-focused skills development. In 2020, we published the Simplified Other Service Provider (OSP) guidelines to ensure the smooth operation of the IT industry, as well as BPO and IT-enabled services. In 2021, we launched an innovation platform that drives the growth of globally competitive manufacturing and AI construction.
“India is a region that benefits from computing power. From farmers to pharmaceutical companies, the SAAS-based model is the answer to many of India’s needs.”
— Sumit Sood, GVP and MD-APAC, Global Logic
Advanced Computing Development (C-DAC) also introduces technologies such as automated parallelization compilers, cyber security operations centers, and parallel development environments (ParaDE). Apart from these, the Government of India is planning to develop Biotech-PRIDE (Promotion of Research and Innovation through Data Exchange), and MoU with the Government of Japan is also directed to further development of 5G and communication security.
“By accelerating the transition from campus to enterprise and making capital investment tax cuts easier and clearer, governments can further drive industry growth.”
— Expleo Solutions CEO, Balaji Viswanathan
Digital intervention in the telecommunications sector has already plummeted towards increasing technological potential. Telecom organizations are committed to operational integration of business intelligence and analytics, automation of customer experience and relationship management, adoption of IoT, ML, and big data for smart infrastructure, and migration to the cloud. As seen during the Covidian wave, technical interventions in medical infrastructure and fintech are also immeasurable. Against the backdrop of such interim development, IT companies can only accelerate this transition to digitalization.
Future outlook
“The pandemic has thrown out some sectors that are steadily rising. Technology companies need to focus on these sectors.”
— Marshall Correia, Vice President, India, South Asia, Red Hat
As McKinsey said, India’s information technology industry has the potential to generate $ 300-350 billion in revenue by 2025. In addition, we can assume that BPM will account for $ 50-55 billion of this total revenue. As the pace of vaccination increases and the economy follows a rapid path to recovery, IT departments must maintain this progress and innovation. The IT industry exemplifies its commitment and readiness, despite the turmoil caused by two consecutive COVID-19 waves. Even if a possible third wave could slow this momentum, it could become more dependent on digitalization, prolong sector growth and help create more jobs.
Source: indianewsrepublic.com
