Transcript Market and Growth Potential

Indian IT Industry
Vast Growth Potential
March 2005
IT Industry
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
India - An Introduction
Population
Over 1 bn
States/UTs
35
Geographical Area
3.3 mn sq kms
Languages recognised
22
Business language
English
Per Capita Income**
US$ 534
GDP**
US$ 650 bn
**(at factor cost & at current prices)
1USD=43.54 INR (as on July 4, 2005)
March 2005
Source:CSO Statistics
India - Fast pace Growth
 Largest democracy
 4th largest economy by PPP index
 6th largest energy consumer
 ForEx reserves skyrocket from USD 42 bn (2001) to
USD 123 bn (2004)
 GDP growth to continue between 6-8%
 3rd largest economy by 2050: Goldman Sachs
 Leading in IT & BPO
 Oil & Gas and Biotechnology sunrise industries
March 2005
India - Leading the world
 Hero Honda - largest manufacturer of motorcycles
 Moser Baer - 3rd largest optical media
manufacturer in world
 Pharmaceutical Industry - 4th largest in world
 Walmart, GAP, Hilfiger sources more than
USD 1bn worth apparel from India
 100 Fortune 500 have set R&D facilities in India
including GE, Delphi, Eli Lilly, HP, Heinz and Daimler
Chrysler
March 2005
IT Industry
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
Huge and Growing IT Market
Size (2002-03)
Growth rate
US$ 24 billion
28%
CAGR (since 1999)
46%
Share of IT and BPO
2008 projection
1.4% of GDP
7%
Exports projected (2003-04)
to grow at
US$ 12 billion
26-28%
Employment
Over 650,000
(Second largest employer in IT services sector)
March 2005
Future Growth Potential
USD 35 billion domestic
software market
By 2008
17 million people available
March 2005
Growth in Domestic Outsourcing
(USD Million)
4,000
3,800
3,500
3,000
2,300
2,500
2,000
1,340
1,500
900
1,000
500
560
257
0
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
Alignment to domain knowledge needs
March 2005
Moving up the Value Chain
Consulting
Embedded software
Facilities
management
Unix-based
coding
1960
Mainframe
Application
development
Package
Implementation
Migration & Reengineering
Network
Security
Network
Management
Package
Implementation
E-business
applications
Web Enabling
legacy
Maintenance
Maintenance
Client / Server
Internet
Aligned to technology needs
March 2005
Growth of the Offshore Model
100
80
% of
software
export
60
40
20
0
1991-92
Onsite Services
2001-02
2002-03
Offshore Development
Alignment to business needs
March 2005
Potential Domestic Hardware Market 2010
US$ 44 billion
By Product Segment
By Value Addition
50
4.0
40
20.1
US $ Billion
6.7
6.9
5.4
30
20
10.2
37.4
21.8
10
13.4
March 2005
6.6
8.3
-
Total Market: USD 44 Billion
IT Hardware.
Telecom
6.9
Finished Product
Product Manufactured
from subassembly
Consumer Electronics
Others
Locally Manufactured
Imports
Sub-assembly
manufacture
from
components
Value Addition
Potential Hardware Exports
USD 25 billion
Exports manufacture by Value addition
Exports by Value Chain
14
5
1.4
12
11
US $ Billion
10
4.5
8
6
3.2
4
7
2.9
0
Total Exports: USD 25 Billion
March 2005
7.1
2
2
OEM + ODM
Products
1.1
13.0
Design Services
Components
Products &
Assemblies
Local
Products &
Assembly
manufacture
from subassembly
Subassembly
manufacture
from
components
Imports Value Addition
Focus Areas
Utilities
Targeting new
verticals
Transportation
Healthcare
Financial Services
Beyond
traditional sectors
Telecom Equipment
Manufacturing Industries
March 2005
IT Industry
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
Indian Players
TCS
Wold leading IT consulting services and
business process outsourcing company
Infosys
Provides consulting and IT services to
clients globally as partners
Wipro
Serves over 300 global leaders and is
world’s first PCMM, CMMi and CMM
Level 5 company
March 2005
MNC Presence
MNCs contribution
to export revenues
from IT services
March 2005
23.5%
MNC presence in India
Intergraph Corp., USA
Kelton Graphics
Inc., USA
Services
IBM, USA
Capricorn
Systems Inc.,
USA
Manhattan Associates., USA
Dun & BradStreet.,
USA
IBM, USA
Oracle Inc., USA
Products
Deneb Robotics., USA
Microsoft, USA
NOVELL, USA
SUN Micro System Inc, USA
March 2005
MNC presence in India
IBM, USA
CISCO, USA
SUN Micro System Inc, USA
Siemens Nixdorf., Germany
IT Infrastructure
Hewlett Packard, USA
Fujitsu, Japan
Hughes Network Systems., USA
Bull, France
Alcatel, France
Silicon Graphics Inc., USA
Embedded systems
Cadence Design Systems Inc., USA
Motorola Inc., USA
March 2005
Texas Instruments Inc., USA
IT Industry
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
Invest in India
Skills
Quality
Domain
Policy
Infrastructure
Risk
March 2005
Invest in India
2,000
Japan
1,858
India
1,800
South Korea
1,600
1,400
1,200
Singapore
1,105
1,054
1,000
800
600
Australia
China
965
Hong Kong
548
Taiwan
393
263
400
200
0
1
Malaysia
172
36
22 17
8
7
Sri Lanka
New Zealand
Philippines
Thailand
Source: NASSCOM
India attracts second highest private
equity investment in Asia
March 2005
Invest in India
Advancing on the value chain
 Package Software Implementation
 System Integration
 R& D Engineering
 Network Management
March 2005
Partner with India
Venture funding activities
2001 - 02
USD 1,100 million
2007 - 08
USD 10,000 million
Venture funding activities to increase 9 folds by 2007-08
March 2005
Export from India
Product Services
20%
80%
Hardw are
Support and
Installation
Packaged S/W
support and
Im plem entation
March 2005
Export from India
Professional Services
3%
7%
90%
IS Consulting
System Integration
Custom er
Applications
March 2005
Export from India
Outsourcing Services
46%
54%
Application
m anagem ent
Netw ork and
desktop
outsourcing
March 2005
IT Outsourcing - Expanding Opportunities
Software development outsourcing
Product development outsourcing
March 2005
Destination India
75%
73%
50%
25%
20%
4%
4%
4%
2%
2%
2%
Offshoring of outsourcing
March 2005
O
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Ph
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H
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az
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Br
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Ch
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In
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0%
IT Industry
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
The India Advantage
Quality
manpower
Pro active
policy framework
Specialised
organisations
and facilities
State-of-the-art
infrastructure
High quality
services
March 2005
The Intellectual Advantage
Skill surplus
End-user countries
Regional Hubs
Human Sophistication: Number of
workers, labour cost, worker skill level
High
USA
UK
India
China
Germany
Indonesia
France
Philippines
Ireland
Singapore
Low
High
Vendor sophistication: Number of vendors, vendor quality
India is today a mature region for IT offshore work
March 2005
The Knowledge Advantage
Highly qualified pool of IT professionals
Knowledge Professionals Strength
650000
700000
522250
600000
430114
500000
400000
284000
300000
200000
160000
56000
100000
0
19901991
19961997
19992000
20002001
20012002
20022002
Large pool of highly talented software professionals
March 2005
The Cost Advantage
Costs for offshore work
30-50% lower than in US/Europe
March 2005
The Infrastructure Advantage
 Standardisation Testing and Quality Certification
(STQC) programme
One-stop solution to all quality requirements of electronics
industry
 Software Technology Parks
Exemption
from local
duties
and taxes
Up to
100%
foreign
equity
permitted
March 2005
Single point
No
Single
custom
corporate
window
bonding
income tax
government
and
up to
export
March 2010 clearance
certification
The Policy Advantage
Evolving regulatory regime
 IT Act 2000
 EOU status extended to hardware
manufacturing units
 USD 2580 mn to be spent on e-Governance
initiatives
 Priority sector status given by banks
 Export processing zones established
 487 information communication centres
March 2005
IT Industry
India - An Overview
Market and Growth Potential
Players
Opportunities
Why India?
Contact in India
March 2005
Contact in India
National Association of Software and
Service Companies (NASSCOM)
International Youth Centre
Teen Murti Marg
Chanakyapuri
New Delhi - 110021
Tel 91 11 23010199
Fax 91 11 23015452
Email [email protected]
March 2005
Contact in India
MAIT
4th Floor, PHD House
Opp. Asian Games Village
New Delhi 110 016
Tel 26855487/26866976/26866976
Fax 26851321
Email [email protected]
March 2005
Contact in India
Confederation of Indian Industry (CII)
23, Institutional Area
Lodi Road
New Delhi – 110003
Tel 0091 11 24629994-97
Fax 0091 11 24626149/24615693
E mail [email protected]
March 2005