After Nasscom cuts IT growth estimate, Gartner says India's software market to jump 13%

Buoyed by the emerging digital business strategies that Indian firms are fast adopting, the country's software revenue is set to reach $5.8 billion in 2017 -- a 12.8 percent increase from 2016, a new report said on Thursday.

According to the market research firm Gartner, infrastructure software spending in India is projected to surpass $3.4 billion in 2017, a 10.2 percent increase from 2016 and enterprise application software spending is forecast to grow 16.8 percent in 2017.

Representational image. Reuters

Representational image. Reuters

"Emerging digital business strategies are changing enterprise organisations' buying behaviours in India and accelerating the demand for technology innovations and outcome-based solutions," said Bhavish Sood, Research Director, Gartner, said in a statement.

The computer software and hardware vertical had a foreign direct investment inflow of $5.9 billion from April 2015 to March 2016 -- an increase of nearly 150 percent compared to the same period last year, the finding showed.

Gartner expects these investments to gather further momentum towards the year end.

"Make in India" is set to boost the manufacturing sector, as well as make it easier to attract investment and "Digital India" is focused on creating digital infrastructure, digital delivery of services and increased digital literacy, the report added.

On the contrary, Naasscom today slashed India's software export growth outlook to 8-10% for the current fiscal year ending 2016-17, as against 10-12 percent estimated earlier.

According to Nasscom, the Indian IT Industry has been battling global macroeconomic and political headwinds over the last few quarters, and all these uncertainties have reflected in the muted earnings outlook of Indian IT majors.

The Indian IT Industry has been battling global macroeconomic and political headwinds over the last few quarters, and all these uncertainties have reflected in the muted earnings outlook of Indian IT majors.

Wipro has registered a drop in the second quarter net profit and warned that revenues in the October-December period could be impacted by a "mixed demand environment".

Wipro's third quarter guidance of 0-2 percent sequential growth reflected sentiment similar to that of larger rivals, Tata Consultancy Services and Infosys.

TCS and Infosys posted muted growth numbers for the second quarter as well and said they are witnessing softness in the banking and financial services sector and client spending.

Infosys, in fact, slashed its annual revenue guidance for the second time this year to 8-9 percent.

With IANS input


Updated Date: Nov 17, 2016 14:40 PM

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