Let me begin with a poser—what does Indian IT mean to you?
Chances are that you’ve already started thinking about our
successes in the software exports arena. Amid all the applause for Indian
software exporters, achievements in the domestic market tend to get sidelined.
Agreed that software and services exports from the country have been growing at
an enviable pace, but the domestic IT market can also boast of impressive facts
and figures. Consider this. India is one of the fastest growing IT markets in
the world, the fastest growing PC market in the Asia-Pacific region, and also
the country with the fastest growth in Internet usage in this region.
It was in the last fiscal (1999-00) that domestic IT spending
bounced back after three years of slowdown. And what a revival it was. A 12
percentage-point improvement in annual growth rate is no mean achievement, after
all. IDC believes that there is tremendous momentum in the domestic IT market
today, which will help the industry tide over the minor slowdown being predicted
for the economy in the current fiscal. Over the next five years, the domestic IT
industry is predicted to grow at a CAGR (Compound Annual Growth Rate) of 28
percent, which is among the highest in the world.
Personal Computers
What drives the Indian IT market? As is the case with most
nations in the early stages of the IT maturity curve, the Indian market is
primarily hardware driven. The hardware sector currently accounts for around 56
percent of total IT spending and is growing faster than other sectors of this
industry. Looking at the frenzy in the PCs marketplace, it’s fairly obvious
that PCs are fueling growth in the hardware market.
PC shipments crossed the million mark in the last fiscal and
are likely to shoot beyond two million in the next. That makes India the fastest
growing PC market in the Asia Pacific region. If the Indian market continues to
grow at this pace, which it certainly will, we’re slated to become the second
largest PC market in the region by 2003.
Perhaps the single largest contributor to this impressive
growth is the burgeoning home segment. Today, more than a third of all PCs
shipped in a year make their way to the home segment; and the way things are
moving, this share will only improve in future. This obviously means that no
vendor can afford to neglect this segment. The winners of the future will be the
ones who have in place a focused consumer strategy to address the home segment.
IDC’s "Millennium Home" study reveals that the
most important reasons for purchasing a home PC revolve around enhancing the
family’s computer skills. In an era where people have realized the importance
of being IT literate, this finding springs no major surprises. Another important
finding is that while the chief wage earner of a household is the primary
decision-maker insofar as PC purchase is concerned, family and friends play an
important role in influencing the decision. The survey also reveals that the
average home PC user is around 28 years old—however, IDC believes that as
computer education in schools becomes more widespread and more children start
using PCs at home, the average home PC user of the future might be younger.
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