The Hindu Business Line : IBM upbeat on Indian services market

Hyderabad March 25 The domestic IT market is much larger than current estimates and poised for accelerated growth. Risk mitigation, disaster recovery and IT infrastructure and services management would be significant growth drivers, says IBM.

The Director, Global Technology Services, South Asia, IBM, Mr Nipun Mehrotra, said a deeper insight into the domestic market shows that it is much larger than most of the estimates put out by research firms.

For the year 2006-2007, the total market size is expected to cross $15.9 billion, reflecting a growth of 21 per cent over 2005-2006. However, this could be much more.

Mr Mehrotra told Business Line that services contributes to more than 50 per cent of the India's gross domestic product (GDP) and this is poised to account for a much larger chunk of business. All this means that the technology investments would see greater momentum.

Illustrating the case of multi-million dollar Bharti infrastructure management and recent Idea Cellular wins, Mr Mehrotra said all their investments in the technology were not reflected earlier. The fact that they would now be investing millions of dollars shows that their earlier investments were not reflected in estimates. So is the case with many sectors where technology investments are made.

During his visit to Hyderabad, he said that the IBM business in India across two areas application development and global technology services is poised for growth. The company employs over 50,000 people in India, and there is hectic pace.

Enterprises in India have taken to investments in infrastructure to stay competitive. There are two aspects to these investments. One relates to managing risk and protecting the already existing infrastructure and the other to expand. And in many instances, including in the case of Reserve Bank of India, they are building Tier IV data centre.

In such a scenario, enterprises want risk management, services management and better governance of technology. Even within large deals like the Bharti and Idea, there are two aspects, one relates to infrastructure management the other concerns consultancy and innovation for new services.

IBM invests about $6 billion per annum in R&D and draws up from its expertise in providing necessary consultancy and support for businesses. In many instances, the R&D is aligned with the customer requests.

Within the domestic market, small and medium sized enterprises are looking to concentrate on their core competencies and are innovating for better management of their IT infrastructure be it by outsourcing their entire IT management or data centres or even opting for software as a service or in many cases pay as you go. For IBM, which brings deep insights into the business for enterprises, areas of risk mitigation, IT services management and innovation to improve productivity were three key growth drivers in the marketplace in the country, he said.