India's $100-billion IT industry in 2012 saw the emergence of new
companies to serve global and local markets and sustained growth,
despite tough business conditions.
For the bellwethers, the year was a
turbulent one with Infosys and Wipro struggling to stay afloat while
numero uno TCS withered headwinds to stay ahead even as distant
competitor Cognizant challenged their dominance.
sustained its growth trajectory despite technology challenges and tough
market conditions by adopting new business models, driving
organisational efficiencies and offering a host of new services around
cloud, mobility, analytics, social media and collaboration in a
multi-device connected world.
"European debt crisis, change of
guard in China, US presidential elections and slowdown in world economy,
including India, have affected the industry's growth rate as
discretionary spending and investments for expansion or innovation have
been put on hold," said a top industry representative.
lessons learnt from previous cycles of ups and downs, especially during
the tech meltdown in 2008-10, the industry and especially its
bellwethers have consolidated operations, forayed into new domains and
diversified service offerings to create multiple revenue streams in
traditional and emerging markets.
"A paradigm shift in technology
trends and application is leading to emergence of new companies from
India to serve global and local markets," Som Mittal, National
Association of Software and Services Companies (Nasscom) president, told
"The domestic market is also witnessing increasing
technology adoption in the government sector and the small and medium
enterprise (SME) sector for efficient and faster delivery of services
The domestic market is expected to grow 13-16
percent this fiscal as against 17 percent last fiscal to Rs.91,800 crore
(Rs.918 billion) from Rs.78,600 crore (Rs.786 billion) in 2010-11.
exports are expected to grow 11 percent this fiscal to $77 billion
despite currency volatility from $69 billion in 2011-12, according
The year has, however, been most challenging to global
software majors Infosys and Wipro, which have gone through a change in
top management and facing the heat of competition from global peers,
including TCS and US-based non-resident Indians (NRIs) funded Cognizant
Technology Solutions Corporation.
First time in many years,
Infosys halved its annual revenue forecast to five percent in July in
April. Also, its strategic shift to 3.0 version is yet to make impact on
its marquee clients for cutting big deals.
It bought the Zurich-based consulting firm Lodestone for $349 million (Rs.1,932 crore) September 11 for strategic fit.
in the same boat, Wipro too went through a management rejig and in the
process took time to get its act for clinching new deals and driving
In a strategic move in November, the company
decided to hive off its non-IT business into a separate entity from next
In contrast, TCS has been able to maintain
double digit growth on annualized basis with better pricing and flexible
billing. It also became the first IT major to cross the $10-billion
revenue milestone early this year.
The industry as a whole managed
to grow in double digit this fiscal (2012-13) so far though less than
16 percent last fiscal (2011-12), unlike the global financial crisis in
2009-10 when the sector's export growth rate slumped to single digit
"We feel the worst is behind us and hope for a
turn-around of the global economy in 2013 to fuel higher growth in the
industry, as technology is increasingly becoming an integral part of
every industry," said Mittal.Industry highlights in 2012
- Global and local factors affect industry growth rate as IT budgets pared
- Industry to maintain double digit growth despite slowdown
- Domestic market to grow better than export markets due to steady demand
- Infosys & Wipro most affected while TCS & Cognizant breathe easy
- TCS first IT firm to cross $10-billion revenue mark