India to be world’s third fastest growing enterprise software market through 2016

Despite challenging economic conditions, the enterprise software market in India is projected to grow 13 per cent in 2012, as revenue reaches $$3.22 billion USD in 2012, according to Gartner, Inc. India’s enterprise software market is forecast to maintain its strong performance, with an estimated compound annual growth rate (CAGR) of 13.6 per cent from 2009 to 2016 – the third highest growth rate in the world. The increasing globalization of the Indian economy is leading to a growing need for modern software with the latest features and improved functionality.

“With Indian enterprises continuing to embrace IT to improve productivity and drive growth, penetration of ICT infrastructure has been growing rapidly during the past decade. The primary drivers of growth have been domestic demand, the growing maturity of users and incremental enhancements in the technology,“ India also enjoys a rich presence of all international software and hardware vendors, backed by a very strong ecosystem of system integrators, service providers and business partners. A combination of high domestic demand, presence of global vendors and entry of new small vendors with innovative products have made the overall ecosystem apt for robust growth.” [Asheesh Raina, principal research analyst at Gartner]


In 2012, India will be the fourth largest enterprise software market  in Asia/Pacific. The country is forecast to account for 11 per cent of the region’s total revenue of $29.33 billion USD for Asia/Pacific this year, the equivalent to 1.15 per cent of the total worldwide software of market share of $280 billion USD billion.

By 2016, India’s share of the software market in Asia/Pacific is expected to reach 12.1 per cent, representing $5.4 billion in revenue, or 1.5 per cent of total worldwide software market revenue of $361 billion. In comparison to other countries in the Asia/Pacific region, such as China (with 27 per cent share of regional spending in 2011), the software market in India is still relatively small and evolving.

As per Gartner, priority areas of software spending include operating systems, DBMS, AIM and Application Development. However in the next five, the fastest-growing segments will be Web conferencing and team collaboration, enterprise content management, CRM and ERP. According to Gartner, Indian enterprises are lagging behind in terms of adoption of these tools, resulting in the fast growth of these markets.

[Image credit: Chris Devers/Flickr]

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