IT industry needs to reach out to domestic market

S Mohini Ratna Editor VARINDIA

It is very much to the point to underline the fact that India is well on its way to becoming a hub for the digital industry and in the process creating an ecosystem of start-ups which itself will create new avenues of growth.

As the US and European economies improve with the passage of time, the IT industry in India is expected to add $15–17 billion of incremental revenue in 2013-14. It is also expected that the nature and scope of future demand would be different, with the social media, mobility, analytics and cloud (SMAC) suite of technologies ruling the roost when it comes to clients’ demand.

The overall computer market in India, including desktops and laptops, was pegged at 3.24 million units in the September quarter of 2013. In comparison, last year, the Indian tablet market was estimated to sell 1 million units per quarter. The reason for the falling demand for PCs has been the rise of tablets. This has forced many Indian companies to stop making computers.

Though, in all likelihood, the demand for PCs may grow in the next few years, affordable tablets could come to the rescue of the branded PC vendors in stemming some of their losses.

Satya’s elevation to the top post at Microsoft and Mr. Gates staying on as an advisor at Microsoft to catch up with Apple and Google show the shift from personal computers to mobile devices. Satya’s rise may be in part attributed to India's reputation as a technology powerhouse. These days, Indian talents are being considered for the top positions at the global level. Days are not far off when more Indians will find themselves in the topmost positions at Fortune 100 or 500 companies on a larger scale.

As 2014 will be the sunshine year for the ICT industry, it is anticipated that several mergers and acquisitions (M&A) are going to happen for technology consolidation.  At the start of the year, we have seen Lenovo’s acquisition of Motorola handset business from Google for $2.91 billion and IBM selling its entry-level server business to Lenovo for $2.3 billion. Comcast acquired TWC for $45 billion and recently Sophos acquired Cyberoam Technologies for Rs.430 crore. Many more mergers and acquisitions are expected during this year.

In the Union Budget presented by the Finance Minister, the outlook of the economy is reflected. The Budget has, however, no specific impact on the IT industry. Chidambaram’s promise to contain fiscal deficit at 4.6% of GDP is a good step from the macroeconomic point of view.

As economy improves and technology spending increases, we may look forward to positive outlook in the coming period in which adoption of disruptive technologies and the machine-to-machine(M2M) communications will create opportunities resulting in the overall Industrial growth.