Indian IT Market Overview - Peripherals

Since the fortunes of the peripherals industry are closely linked with that of the PC

industry, peripherals also recorded a healthy growth rate in 1998-99, at least in unit

terms. However, rapid cuts in prices put the revenue growth at only a little over 11

percent.

Almost 60 percent of total peripheral revenues came from printers. There was a distinct

trend towards inkjet printers, with the share dot matrix printers falling below the half

way mark for the first time. Heavy competition between vendors led to a significant drop

in the average sales value of printers, because of which growth rate by value was much

lower than that by units. Colour printing gained widespread acceptance as almost all

inkjet printer vendors made colour the default choice.

Among other peripherals, scanners recorded the maximum growth, with unit shipments

increasing more than three times. The growth rates for peripherals like monitors and hard

disk drives has moved closely in sync with that for PCs and systems.

Datacom Products



The size of the Indian datacom market during 1998-99 was
Rs.913 Crore, which represents a healthy 34 percent growth over 1997-98. A major share

(about 43 percent) of this revenue came from LAN products i.e. Network Interface Cards

(NICs), hubs, switches and routers. It was an exceptionally good year for LAN products,

which grew by 45 percent over 1997-98.

The Indian datacom market seems to be coming of age. Excitement is building up in the

WAN and remote connectivity areas. The Remote Access Server market got a shot in the arm

with the opening up of the Internet in November 1998. The RAS hardware revenues jumped up

more than six times in 1998-99. The market for WAN switches also looked promising in terms

of revenue growth rate, although their overall value is still very small.

Packaged Software



The Indian packaged software market grew 14 percent in
1998-99, with revenues crossing Rs.1300 Crore. Elimination of duties, increased usage of

legal software, growth in usage of ERP solutions and increased adoption of suites and

RDBMSs were the main drivers for growth in the packaged software market.

Currently Application Development Tools account for the largest share in the Indian

packaged software market. However, the fastest growth is being exhibited by Application

Solutions. In the coming years Application Solutions are slated to become the largest

segment of the packaged software market. The boom in the ERP market will fuel this growth.

The share of System Level Software is expected to decline due to falling prices and

increase in bundling of operating systems with PCs.

Services



Growing at over 20 percent in 1998-99, the Indian IT Services
market is slowly gaining momentum. Nevertheless, most Indian corporates continue to be

slow at changing their attitude towards IT services. Many of the users continue to take

services for granted and are unwilling to pay for them. IDC believes that the attitudes of

users are slowly but surely changing.

With a share of over 38 percent, Hardware/ Software maintenance is the largest

component in the IT Services market in the country. Customised software development and

LAN/WAN implementation are the other important components. An important area, whose market

size is currently small but has tremendous potential, is that of IT Consulting