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Domestic IT services market forecast to grow 8.4% in 2014: IDC report

LiveMint logoLiveMint 12-05-2014 Moulishree Srivastava

New Delhi: The information technology (IT) services market in India saw subdued growth in the second half of 2013, as clients spent less on infrastructure such as computer servers, storage systems and networking equipment, researcher International Data Corp. (IDC) said.

The industry is estimated to grow by 8% to Rs47,635.6 crore in 2014 after clocking an expansion of 6.5% in the second half of 2013 and 7.5% in the first half, IDC predicted in its report released on Monday.

The full year data for 2013 is yet to be released, IDC said.

Banking and financial services, manufacturing, telecom and government comprised 82.5% of the total spending in the second half of 2013, the report said.

International Business Machines Corp. (IBM) commanded almost 12.1% of the IT services market in India in this period, while Wipro Ltd. garnered the second-largest market share at 7.4%, up from 6.9% in first half of 2013. Tata Consultancy Services Ltd (TCS), HP (Hewlett-Packard) Enterprise Services LLC and HCL Technologies Ltd had market share of 7.2%, 3.3% and 2%, respectively.

“The growing complexity of enterprise IT environments, combined with the challenge of availability of advanced technical skills, will push organizations to turn to outsourcing services,” said Sachin Chaturvedi, senior analyst for IT services at IDC.

The outsourcing services market in India, which is one of the leading segments in IT services, grew close to 7.1% in the second half of 2013, slightly lower than the growth rate in the corresponding period in 2012.

“Large outsourcing contracts are being replaced by small discrete outsourcing deals, where the contract value and length of contract have come down to 3-5 years instead of 7-10 years,” said IDC.

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