Software market likely to see 10%-plus growth from 2016: IDC report

Investments coming in from the government, manufacturing and retail have helped with this surge


The growth was driven by major projects kick-started by the government, including Digital India, Make in India and Pradhan Mantri Jan Dhan Yojana. Photo: Namas Bhojani/Bloomberg News
The growth was driven by major projects kick-started by the government, including Digital India, Make in India and Pradhan Mantri Jan Dhan Yojana. Photo: Namas Bhojani/Bloomberg News

New Delhi: The Indian software market is likely to see a steady 10%-plus growth from 2016 owing to investments coming in from the government, manufacturing and retail, said a new report by International Data Corporation (IDC) on Thursday.

The software market saw 10% growth in the second half of calendar year 2014 as compared to the previous year, which was slower than expected due to prolonged economic slowdown.

The growth was driven by major projects kick-started by the government, including Digital India, Make in India and Pradhan Mantri Jan Dhan Yojana. The initiatives “pushed adoption in other sectors” as well, the report noted adding that the small and medium enterprises (SME) segment is “the new sweet spot for most of the vendors who are trying to push their software-as-a-service (SaaS) offerings among SMEs through their various partnerships”.

IDC researchers expect the software market to grow at a CAGR (compounded annual growth rate) of 10.6% between 2015 and 2019. Some of the software categories that will trigger the uptake include mobile applications, in-memory analytics, database security and privacy, open source applications, data loss prevention, encryption and application security, they said.

Microsoft Corp, Oracle Corp, SAP SE, International Business Machines (IBM) Corporation and Synopsys, Inc. collectively account for more than 60% of the total share of the global software market.

While operating system (OS) upgrades by customers along with bundled Office offerings and Office 365 uptake contributed to Microsoft’s growth during the review period, Oracle gained a steady foothold across verticals which adopted cloud solutions to manage their workforce and integrate their CRM (customer relationship management) applications with ERP (enterprise resource planning) to get a holistic view of their customers.

SAP, according to the report, registered a robust growth owing to migration of its existing customers to SAP Cloud, powered by its in-memory platform, SAP HANA.

“Some of the larger software vendors restructured their organization in line with the emerging technologies and re-aligned their strategies to capture the mindshare in growth markets such as SMB (server message block), cloud, analytics and mobility. This has worked quite well for them and they have managed to grow in spite of the uncertainty in the market,” said Shweta Baidya, senior market analyst, Software, IDC India.

“Application developers are becoming a strong part of the larger ecosystem and vendors are working closely with the developer and partner community to offer best-in-class solutions to their target customers,” she added.

The industry segments which invested in next-generation solutions to gain a competitive edge in the market in the second half of the last year included manufacturing, banking, finance, securities and investment services, IT/ITeS, communication and media. Meanwhile, sectors such as retail, government, entertainment and hospitality showed strong inclination towards IT adoption.

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