EVOLUTION OF INDIAN IT INDUSTRY

If we were to describe India’s IT evolution over the last few years in just two words’– it would be penetration & evolving online culture. There’s no doubting that the Indian PC industry is on a roll. As per IDC estimates at the beginning of the year, it was well documented that the Indian IT industry will continue to be largest growing market in the Asia’– Pacific, growing at 19% - compared to growth of 12% even in markets such as China. 

The latest IDC reports, for the third quarter of 2006, match up to these expectations. The total PC shipments crossed 1.4 million units in just a single quarter – registering a growth of 24% over Q3, 2005. While the desktops registered a growth of 15%, the notebooks market once again registered strong growth of more than 79% y-o-y: reflecting the maturing market in terms of technology adoption. And equally surprising are the facts that SME and the education sector – proved to be the biggest growth engines in the current quarter. 

Looking more deeply, you would witness more encouraging figures such as almost three fold increase in PC penetration in the nation – from 6.3 per 1000 people in 2000-01 to 18 per 1000 people in 2005-06 (as quoted by Business Standard). Looking back at days of mid 1980’s – wherein PC adoption was made possible only because of government policies of harnessing the power of IT–– the industry has finally arrived in India within a short span of 20 years. 

There have been several factors behind this silent change happening. And this is a combination of several factors initiated by key manufacturers such as HCL, technological changes and evolution of the digital lifestyle. 

What one is seeing is primarily the beginning of a movement called the “IT Virtuous Cycle””– a term which reflects at three key factors in adoption of IT– increasing affordability, connectivity and content.

Increasing affordability 
The first factor is the increasing affordability of personal computers. Combined initiatives by various players in the ecosystem saw HCL launching low cost PCs. Making the PC ownership even simpler, HCL led the way in discussions with key financial institutions to launch India’s first attractive EMI based packages to customers. Today, around 20% of consumer PCs are sold through these offers. We have seen computers become more affordable and richer in features.

Internet is here!

The second factor for PC adoption is connectivity. A study by comScore networks has put India as the 10th largest nation amongst internet users. As per recent reports from Internet & Mobile Association of India (IAMAI), the total internet users by end of 2005 were 38.5 million – registering an increase of around 54% from 2004-05 statistics. Around 1 out of 8 internet subscribers today are using broadband connection. It is estimated that by end of next two years, India’s internet population will cross 100 million’– making India one of the most prolific internet users across the world. We are seeing roll out of broadband connectivity across the country with telecom majors take fiber to the taluk level and further. We will see rapid adoption of wireless technologies such as Wi-Max that solves the hurdle of high speed last mile connectivity. As per a recent study by global research groups – Maravedis Research & Tonse Telecom – India will have 13 million WiMAX subscribers at the end of 2012.

There is huge potential for broadband wireless Internet and voice-over-IP services in India because there are still more than 600,000 villages with no basic communications services. The broadband growth will match India’s mobile phone subscriber growth. From a mere 1.5 million connections currently, Indian broadband market will grow manifold in the next six years to become potentially one of the top broadband wireless markets on the planet. The resulting eco-system and opportunities are a vendor / investors dream destination. 

Content is getting local…and consumed! The third key factor is content or in other words the reason to buy computers. Today, both PC manufacturers as well as software developers are taking aggressive initiatives to enable PCs to support multi-lingual applications making possible development of locally relevant content in vernacular languages. A recent study has concluded that almost 44% of internet users prefer a local language site/content. 

While HCL had always propagated & pre-loaded its products with multi-lingual capabilities, today leading players like Microsoft have embedded support for English, Hindi & Tamil in their recently released OS for India – Windows XP Starter Edition. Further, digitization of content and technology marks the movement of PC towards the center of the digital home. 

Other factors: 
E-governance is today not an esoteric definition, but a reality, which is gradually changing Indian landscape. From projects like e-choupal, which was recently awarded the revered Stockholm Award for best-governed global e-governance project, to HCL’s initiatives of rendering hardware training to rural youth – its this space which would witness the most aggressive IT revolution India would see in years to come. 

Conclusion: 
But then, this is just the beginning, the Indian PC market will in time to come transform India into one of the biggest global PC markets. While the government plays a significant role through progressive taxation & policies to encourage an ecosystem for PC manufacturing in our country and promoting IT adoption in the country. We already are witnessing adoption of IT for citizen centric services in areas like telecom, medicine, education, agri-markets and rural empowerment.