The India IT and Business Services market is expected to achieve 12.5 percent growth to $12.1 billion in 2017 – mainly driven by digital transformation.
IT Services that contributed around 78 percent of the overall services market in H1 2017 is expected to reach $9.3 billion in 2017.
Despite a decline in the country’s GDP in H1 2017, digital transformation initiatives and core IT systems modernization by organizations in verticals such as banking, manufacturing and telecom added to the growth story of the IT Services market.
Project Oriented services constituted the largest segment with 38.9 percent share, followed by Outsourcing (37.8 percent), and Support and Training (23 percent) in H1.
“The demand for services such as systems integration and hosting infrastructure was in high demand in H1 2017 as a significant number of small and medium businesses tuned into the technology requirements stemming out of the Government’s GST drive,” said Jaimadhav Senapati, market analyst – IT Services, IDC India.
Systems Integration led the Project Oriented services market in H1 2017. The demand was led by investments in core infrastructure upgrades (e.g. core banking, ERP systems) by larger enterprises across banking, insurance, manufacturing, and telecom industries.
IDC estimates that the IT Services market will advance at a CAGR of 9.6 to $13.4 billion by the end of 2021.
“Digital Transformation spend will lead the growth in IT Services market over the next 3-4 years. Cloud, Information Management, and Security would be the three pillars of growth for this period, as organizations would leverage such technologies to accomplish their business objectives,” said Sandeep Kumar Sharma, associate research manager – Software and Services, IDC India.
