Software market revives from shackles of slump

Until 2013 the IT stalwarts were looking for a better growth and prospects in 2014 which proved viable after the historic win of BJP that changed the face of the nation on a positive note. The recession struck nation got a new lease of life when the new government announced slew of measures for the IT industry.

With the economic revival, India Software market witnessed an improved 1H 2014 compared to a slow 1H 2013. According to International Data Corporation IDC, the software market registered a y-o-y growth of 10.7% in 1H 2014. Verticals like BFSI, Manufacturing, Retail and E-commerce became promising verticals for the market as there were major IT investments witnessed. Few big vendors closed major deals which were in pipeline since early 2013, but did not materialize owning to economic and political uncertainties.

IDC expects the software market to grow at a stable pace in the next five years (2014-2018) with a healthy CAGR of 10.5%. Some of the areas which are expected to witness software uptake are mobile application development and mobile device management, security software (related to 3^rd Platform), system software, analytics and engineering applications.

Virtualization and cloud players such as VMware, Salesforce and Red Hat generated good business owing to greater market awareness while database and analytics players such as Teradata, Informatica, Oracle, Qlik and others registered strong double digit growth due to widespread demand for customer insights and analytics.

Banking, Finance, Securities & Investment Services (BFSI), Manufacturing and Communication & Media were the top verticals which invested in upgrades and new licenses. Some of the sectors to watch out for in the future includes Entertainment, Retail & Ecommerce, Education, Hospitality etc.

Some of the solutions which were readily accepted across verticals included customer analytics, mobile solutions, cloud solutions, customer management solutions, omni-channel management systems, data loss prevention etc.

Government initiatives such as Mobile Seva, Digital India, Pradhan Mantri Jan Dhan Yojana and the likes will be instrumental in triggering adoption of software solutions in the coming years. Launch of various schemes and policies is expected to catalyze software uptake by Manufacturing, Retail, Travel & Tourism and BFSI in the coming 2-3 years.

“Large as well as SMB customers are looking at ways to curb their capital expenditure and are keen to embark on the cloud journey. This has led the vendors to make their licensing policies more flexible and easier so that existing customers could smoothly transition to a cloud environment,” says  Shweta Baidya,  Senior Market Analyst, Software, IDC India.

There has also been a rise in adoption of open source software especially among the SMB segment which is shying away from blocking its capital on expensive proprietary software. Small and Co-operative banks, Retail and Telecommunication sectors are looking at customized solutions based on open source platform for greater flexibility and cost reduction. The evolution of 3^rd platform is expected to fuel the uptake of open source solutions further in the times ahead.