Indian IT services segment set to grow at 12%
May 11th 2011 - Wednesday
Pent-up demand and a slowly improving economy is driving recovery in the global IT services market, which will grow at a compound annual growth rate (CAGR) of 4.4% during the next four years, to hit US$756 billion, according to IT research firm Ovum.
In a new forecast, Ovum has said that although 2011 growth is still not back to pre-recessionary levels, the market will return to healthy growth of more than 4.5% in 2013, when the recovery will begin in earnest. This is a significant increase on growth in 2010, which did not even reach 2%.
Meanwhile, Ovum has also released a new market share analysis of the top 50 global IT services vendors, to paint a picture of the companies that are dominating the space. IBM continues to be the world's No. 1 provider of IT services, followed by HP and Fujitsu.
On a regional level, the picture in India and the Middle East and Africa is also positive. The Indian IT services market will grow by a CAGR of almost 12% during the next four years to reach US$16.8 billion. The market will cross pre-recessionary growth rates in 2012, when growth will reach 10%.
The market in the Middle East and Africa, which fell into negative growth in 2010, will demonstrate a slower CAGR of 4.5% during the next four years and will begin to cross pre-recessionary growth rates in 2014.
Hansa Krishnamurthy Iyengar, Ovum IT services analyst, said: "The global recession affected the IT services market in India as it did the rest of the world, and the curtailing of investment caused a sharp decline in IT spending from the enterprise sector.
"However, with the public sector looking at major e-governance projects, the market for IT services will see a return to growth in 2011, with pre-recessionary growth rates returning by 2012 and robust growth continuing to the end of 2015.”
He added: "In the Middle East and Africa, the market was hit much more severely by the recession, with growth slipping into the red and the market shrinking marginally due to the region's heavy reliance on the US and “European economies.
“We will see growth returning, albeit slowly, driven mainly by the infrastructure and application-led outsourcing sectors as governments invest in developing first-generation infrastructure and systems."