One industry, three surveys and a few findings

Past the first quarter of the financial year is review time for the infotech industry. Here we attempt to study the general trends of the Indian IT industry as laid out in three surveys -- the annual roundup by Dataquest (DQ, the Indian computer magazine), the Indian IT Market Overview, 1998-99 by IDC and the annual roundup by Computers Today (CT).

Although this article uses the three sources, it is meant only to provide the different perspectives. Any differences are best left to the sources themselves. We look at the larger perspectives that these surveys give us.

The macro picture for 1998-99
The infotech industry grew about 18 per cent in the year ended March 1999. That does not tell you much, even if we say it had grown by about the same (17.8 per cent) the previous year, 1997-98 or that a growth rate of about 17 per cent was projected for the industry (all IDC figures).

The fact is that the domestic industry has had a tough time the last two years, and this growth rate is nothing to crow over. Dataquest estimates domestic growth at a slightly healthier 21.8 per cent while Computers Today puts it at the other end, at 12.6 per cent. That reflects a bad year for the domestic infotech industry? Then consider this:

GDP growth rate was 5.8 per cent (up from 5 per cent in 97-98) and, most importantly, industrial production and exports fell from 6.6 per cent and 1.6 per cent to 4 per cent and -1.1 per cent. (as per CMIE -Centre for monitoring Indian economy-figures).

IDC values the domestic market at Rs.12,724.2 crore while Dataquest''s estimate is Rs. 13,204.3 crore and Computers Today''s is Rs.8,772 crore.

Given that the previous year saw too many distractions like the Asian currency crisis, the slowdown in the domestic economy, adverse global reactions to India''s nuclear bomb, and the political situation that spoilt the macro picture, this performance must be seen as a minor miracle.

But a few silver linings emerge from the year gone by. The new policy on Internet service providers is in place, and is beginning to show its worth (see article '' '' and ''? '' ).

The home, small office and small businesses have begun to come into their own and have shown higher growth rates and market shares, taking over from the large and medium companies as the growth segments. These must be the segments which pulled the graph upward from the parallel that the IT market was beginning to make with the GDP and the economy.