The software market growth in the second half of calendar year 2014 turned out to be slower than expected owing to prolonged economic revival. As per International Data Corporation (IDC) India Software Tracker for 2H 2014, the India software market registered a stable year on year growth of 10.0%. However, the market is expected to gain a steady momentum starting 2016 and beyond as deals would have closures and implementation would start. Some of the reasons for the stable growth include a steady double digit growth for the top vendors such as SAP, Microsoft, Oracle and the likes. More investments are expected to pour in from sectors such as Government, Manufacturing and Retail among others.
Some of the major transformational projects kick-started by the Government, including Digital India, Make in India, Pradhan Mantri Jan-Dhan Yojana etc. have already pushed the adoption in other sectors too. Further, Small & Medium Enterprises (SME) segment is the new sweet spot for most of the vendors who are trying to push their Software-as-a-Service (SaaS) offerings among SMEs through their various partnerships.
IDC expects the software market to grow at a healthy pace in the next five years (2015-2019) with a CAGR of 10.6%. Some of the software categories that will trigger the uptake include mobile applications, in-memory analytics, database security and privacy, open source applications, DLP, encryption, application security among others.
Top Vendors
Microsoft, Oracle, SAP, IBM and Synopsys retained their dominant position in the market collectively cornering more than 60% of the total share.
Operating System (OS) upgrades by customers along with bundled Office offerings and Office 365 uptake contributed to Microsoft growth during the review period. Oracle gained steady foothold across verticals which adopted cloud solutions to manage their workforce, and integrate their CRM applications with ERP to get a holistic view of their customers. SAP registered a robust growth owing to migration of its existing customers to SAP Cloud powered by its in-memory platform, SAP HANA Manufacturing, Banking, Finance, Securities and Investment Services (BFSI), IT/ITeS and Communication & Media were the top verticals which invested in next generation solutions to gain a competitive edge in the market. Some other sectors that have shown strong inclination towards IT adoption includes retail, government, entertainment and hospitality sector.
Manufacturing companies are making an effort to integrate social media platform with the back end systems to implement feedback during the production stage itself and enhance customer offerings. Telematics and Robotics are some of the other areas where the Manufacturing sector is beginning to display interest and discussions have started with the vendors for long term gains.
“Some of the larger software vendors restructured their organization in line with the emerging technologies and re-aligned their strategies to capture the mindshare in the growth markets such as SMB, cloud, analytics and mobility. This has worked quite well for them and they have managed to grow inspite of the uncertainty in the market," says Shweta Baidya, Senior Market Analyst, Software, IDC India.
"Application developers are becoming a strong part of the larger ecosystem and vendors are working closely with the developer and partner community to offer best-in-class solutions to their target customers", adds Baidya.
