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IT/ITES Industry

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IT/ITES Industry Brief

The IT industry has also created significant demand in the Indian education sector, especially for engineering and computer science. The Indian IT and ITeS industry is divided into four major segments – IT services, Business Process Management (BPM), software products and engineering services, and hardware. The Indian IT sector is expected to grow at a rate of 12-14 per cent for FY2016 in constant currency terms. The sector is also expected triple its current annual revenue to reach US$ 350 billion by FY 2025, as per National Association of Software and Services Companies (NASSCOM). India, the fourth largest base for new businesses in the world and home to over 3,100 tech start-ups, is set to increase its base to 11,500 tech start-ups by 2020, as per a report by NASSCOM.

Indian IT's core competencies and strengths have attracted significant investments from major countries. The computer software and hardware sector in India attracted cumulative Foreign Direct Investment (FDI) inflows worth US$ 20.42 billion between April 2000 and December 2015, according to data released by the Department of Industrial Policy and Promotion (DIPP). Indian start-ups are expected to receive funding worth US$ 5 billion by the end of 2015, a 125 per cent increase in a year, according to a report by IT Industry association NASSCOM.

Some of the major developments in the Indian IT and ITeS sector are as follows:
  • PurpleTalkInc, a US based mobile solutions company, has invested US$ 1 million in Nukkad Shops, a Hyderabad based uber-local commerce platform that helps neighbourhood retail stores take their businesses online through a mobile app
  • JustRide, a self-drive car rental aggregator, has raised US$ 400,000 in pre-series A round of funding from a group of angel investors, including Redcliffe Capital’s Mr Dheeraj Jain, which will be used to enhance its technology
  • Apple Inc. plans to set up its first technology development centre outside the US in Hyderabad with an investment of US$ 25 million, which is expected to create 4,500 jobs, as per Mr JayeshRanjan, Secretary, IT for the state of Telangana
  • Global PE firm Blackstone Group has acquired a minority stake in an Indian travel, transportation and logistics software firm, IBS Software, for US$ 170 million, by buying the stake from General Atlantic and few other shareholders
  • India’s top-tier IT company, Infosys Ltd, has bought a minority stake worth US$ 3 million in Whoop, which is a US-based start-up that makes activity trackers worn by athletes
  • Microsoft Ventures is planning to incubate 500 start-ups in India in the next five years with a vision to create a viable and profitable business out of the booming start-up sector in India
  • National Association of Software and Services Companies (NASSCOM) plans to open four more tech start-up incubation centres in different parts of India, in addition to existing three, in support of Government of India’s ‘Start-up India’ initiative
  • Nasscom Foundation, a non-profit organisation which is a part of Nasscom, has partnered with SAP India to establish 25 National Digital Literacy Mission (NDLM) centres in 12 cities across India, as a part of Government of India's Digital India initiative
  • US-based Callidus Software Inc, cloud-based sales, marketing, learning and customer experience solutions provider, has opened its centre in Hyderabad and also launched its ‘The Lead to Money’ suite in Indian markets
  • Wipro Ventures, Wipro’s US$ 100 million corporate venture arm, plans to invest in early-stage Venture Capital (VC) funds based in the US to pursue a strategy of investing/partnering country-focussed VCs
  • Reliance is building a 650,000 square feet (sqft) data centre in India—its 10th data centre in the country—with a combined capacity of about 1 million sqft and an overall investment of US$ 200 million
  • Intel Corp plans to invest about US$ 62 million in 16 technology companies, working on wearable, data analytics and the Internet of Things (IoT), in 2015 through its investment arm Intel Capital. The Indian IoT industry is expected be worth US$ 15 billion and to connect 28 billion devices to the internet by 2020
  • Indian e-commerce industry is expected to grow at a CAGR of 35 per cent to reach US$ 100 billion size in the next five years, as per a study by Assocham-PricewaterhouseCoopers