The Future – Outlook: 1999 – 2000 and beyond

By : |June 23, 1999 0

The future

Outlook: 1999-2000
and beyond
The forecast for 1999-2000 and beyond is based on IDC’s outlook for the future as
highlighted below:

 Economy

  • Industrial growth rate will improve. Early indicators for the year clearly point
    in that direction. In the first two months of 1999-2000, there has been an improvement in
    diesel consumption, steel output, cement consumption and railway freight. IDC believes
    that these four indicators are a good measure of the state of the economy.
  • Exports will also pick up during the year with the global economy expected to recover.
    The worldwide GDP is expected to improve from 2 percent in 1998 to 2.5 percent in 1999.

 Political Scenario

  • The political scenario in the country will remain uncertain for a major part of the
    year. The elections due in September-October 1999 will lead to a temporary slowdown.
    However, some stability is expected on the political front thereafter.

 IT Spending

  • Banks and financial institution will continue along the path of rapid computerisation.
    However, the directive issued by the Central Vigilance Commission will have only a limited
    impact till 2000 and hence proliferation among smaller banks will take some more time.
  • Corporate buying will improve in 1999, due to the expected improvement in industrial
    growth. The year 2000 will see a further spurt in corporate buying.
  • Spending by Government departments and agencies will begin to pick up from 2000.
  • Home, Small Office and Small Business segments will continue with their spending on IT
    products like PCs and peripherals. Although these segments will continue to grow at rates
    above than the overall average, IDC believes that the growth rates might taper off a bit
    from 1999.
  • Due to low current penetration, the Internet subscriber base will show dramatic growths
    in the short term. However, access charges are unlikely to change dramatically, thus
    curbing the growth of Internet subscribers to an extent.

IT Market Forecast,1999-2000 and 2000-01 (Rs. Crore)

Segment 1999-2000 Annual Growth (%) 2000-01 Annual Growth (%)
Personal Computers 4901.2 22.2% 6246.3 27.4%
Servers (Other than PC
Servers)
394.0 -6.4% 414.2 5.1%
Traditional Workstations 104.5 -4.4% 96.8 -7.3%
Peripherals 1317.8 7.1% 1513.0 14.8%
Datacom Products 1255.8 37.6% 1706.3 35.9%
Hardware 7973.3 19.3% 9976.6 25.1%
Packaged Software 1554.7 16.5% 1824.5 17.4%
Services 4012.5 20.7% 4863.3 21.2%
Others* 1685.8 22.1% 2076.9 23.2%
Total IT Market 15226.3 19.7% 18741.2 23.1%
* includes consumables and
individual training

Source: IDC (India) Limited, 1999

The Future

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