Digital transformation powers India software industry growth: IDC

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Digital transformation initiatives will help India’s software market grow 13.5% year on year to $5.6 billion by the end of 2018, according to IDC.

IDC’s latest Semiannual Software Tracker 2H 2017 covering Asia Pacific excluding Japan (APeJ) reports that India is currently amongst the top three software markets in APeJ, and – with an estimated CAGR of 16.6% for 2017-2022 – would also account for the highest growth rate amongst APeJ countries for the above-mentioned forecast period.

That growth rate is thanks in no small part to digital transformation initiatives in Indian enterprises, which are fueling the growth story across a number of industry verticals and customer segments. said Ranganath Sadasiva, director of enterprise solutions at IDC India.

“One of the major areas that have received thrust because of these initiatives is modernization of core applications,” Sadasiva said. “This has boosted the India software market and is expected to continue driving the market for the next three to five years.”

IDC classifies the software market into three primary categories: applications, application development and deployment (AD&D), and system infrastructure (SI) software. Applications contributed the bulk of the spending with a 58% share, followed by AD&D and SI software with shares of 23.5% and 18.6%, respectively, in 2H 2017.

For the forecast period from 2017 to 2022, IDC predicts that the five fastest growing software categories will be collaborative applications, enterprise resource management (ERM) applications, customer relationship management (CRM) applications, security software, and data access, analysis, and delivery software.

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Sandeep Kumar Sharma, associate research manager for software and services at IDC India, noted that going ahead, Indian enterprises would lay strong emphasis on collaboration and digitization of business processes.

“These would render tremendous business potential for collaborative applications, ERM and CRM in the next three to five years,” Sharma said. “Simultaneously, organizations would also increasingly invest in business analytics (DAAD) software to enable businesses with actionable insights. All these technology initiatives would involve security software investments at the core in the future.”

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