The Indian information technology (IT) services and business market is projected to achieve revenues of $14.2 billion by December next year, a 6.8% growth over the current year, said a report by technology market research firm International Data Corporation (IDC).
According to IDC, system integrators or traditional IT services firms will lead the growth. Revenues for this year are projected at $13.3 billion, a 6.9% growth from last year. The report was published as part of IDC's half-yearly Worldwide Semiannual Services Tracker - 1H19.
The IT services market, which includes project-oriented, managed services, and support and training, contributed 77% of the overall IT industry’s revenues during the first six months of the year. This market is expected to be $10.2 billion by December 2019, growing at 7.2%. Project-oriented services was the largest segment, followed by managed services, and support services.
However, IDC expects the services market to grow faster in the coming years with the compounded annual growth rate (CAGR) projected at 8.2% between 2019-2023, to be valued at $14 billion by the end of 2023.
During the first six months of 2019, the highest revenue-generating segment in the market continued to be systems integration. This was chiefly on account of the shift towards modernised infrastructure and applications, IDC said. Hosting infrastructure services and hosted application management continued to register high growth rates during the first half, followed by IT consulting and application management.
“Vendors are leveraging emerging technologies such as AI (artificial intelligence), advanced analytics, ML (machine learning) to position themselves as the trusted digital transformation partner. They are investing heavily on re-skilling and upskilling their workforce to gain confidence and drive more business across major verticals such as BFSI, government and manufacturing among others," said Shweta Baidya, senior research manager, software and IT services at IDC India
The half-yearly report noted that vendors and startups are also partnering with each other to create innovation hubs, share ideas and collaborate to achieve greater synergy, through new digital projects.
Baidya said that owing to the implementation of GDPR in May 2018, IT players saw a strong uptick in demand for cybersecurity and enterprise governance, risk and compliance (eGRC) services from enterprises, which had significant exposure to European Union clients.
During the first half of the year, a lot of organisations adopted agile methodologies, DevOps, and open source, resulting in a higher adoption of emerging technologies, IDC said.
"The need of the hour is a quick and effective adaptation to the new digital environment, which can be achieved through the development of new skills for executing complex models in IoT, AI, ML, blockchain, data science and robotics,” said Garima Goenka, market analyst, IT services at IDC India.