PROJECT REPORT

ON
IT INDUSTRY

By (Group No-7):
Akansha Aggarwal
Shabana Ibrahim
Simran Kaur Kalra
Somesh Mittal
Sushant Singhal
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 TABLE OF CONTENTS
S.NO TOPIC PAGE NO.
1. CHAPTER 1: INTRODUCTION 3-6
1.1 IT INDUSTRY OVERVIEW AND KEY
SERVICES

2. CHAPTER 2: IT INDUSTRY IN INDIA 7-12

2.1 MAJOR INFORMATION TECHNOLOGY
HUBS IN INDIA
2.2 TOP IT COMPANIES IN INDIA
2.3 PEER COMPARISON OF SOME TOP IT
COMPANIES IN INDIA
2.4 FINANCIAL STRENGTHS AND
LIMITATIONS OF COMPANIES
2.5 ANALYSIS OF TOP IT COMPANIES
3. CHAPTER 3: EVOLUTION OF THE IT 13-16
INDUSTRY
4. CHAPTER 4: MARKET ANALYSIS OF IT 17-24
INDUSTRY
4.1 IT INDUSTRY SWOT ANALYSIS
4.2 PEST ANALYSIS OF IT INDUSTRY
5. CHAPTER 5: CUSTOMERS OF IT 25-28
INDUSTRY
5.1 INDIAN IT COMPANIES DISCLOSES
THEIR CUSTOMER NAMES AFTER POST
COVID-19
5.2 TCS TO THEIR CUSTOMERS
6. CHAPTER 6: FUTURE OF IT INDUSTRY 29-33
6.1 CURRENT MARKET SIZE AND
DEVELOPMENTS TO COME IN THE IT
AND ITES INDUSTRY:
6.2 IT ADVANCEMENTS THAT WILL
TRANSFORM THE INDUSTRY IN THE
NEXT 20 YEARS:
6.3 MAJOR CHALLENGES THAT THE IT
INDUSTRY IN INDIA WILL BE FACING IN
THE FUTURE ARE:

7. CONCLUSION 34
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 INTRODUCTION
Information Technology (IT) is the use of computers to store, retrieve or
manipulate data or any other information. In Context of Business Operations, IT
is used as collection of information systems, communication systems and
computer systems which includes- hardware, software and peripheral
equipment’s.

1.1 IT Industry Overview and Key Services:

The information technology (IT) industry is comprised of companies that produce
software, hardware or semiconductor equipment, or companies that provide
internet or related services. Three major IT Key Services are:

a) Software and Services:

The software and services industry group are made up of companies that provide
internet services, as well as companies that provide software and IT services.
Internet services include companies that provide online databases or interactive
services, such as search engines or social networks. IT services includes
companies that provide IT consulting or data processing services to other
companies. Software, thus consists of any kind of software which can be used for
commercial use, like enterprise software and system software.
Examples of companies that provide software and services include Google, eBay,
Facebook, Accenture, PayPal, Adobe, Microsoft, and Electronic Arts (EA).

Industry Sub-Industry Description

Internet Software & Services Such Companies provide
internet software and
Internet Software internet services,
& Services supporting e-commerce
and other types of
industry over the
internet.

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 IT Consulting & Other Such Companies provide
Services IT consulting to various
clients to enable them in
using IT Services with
respect to their work.
Data Processing & Such Companies provide
Outsourced Services data processing or
IT Services outsourcing services,
including back-office
automation services to
deliver IT enabled
business solutions,
processes and best
practices to companies.
Application Software Companies that develop
and produce software for
business or consumer
use, including enterprise
applications and
technical software.
Systems Software Companies that
Software produces such software
which provides platform
for other software. For
example: Microsoft
Windows, macOS, etc.
Home Entertainment Companies that produce
Software home entertainment
software, such as video
games, and educational
software for consumer
use.

b) Technology Hardware and Equipment

Technology hardware and equipment is broken down into three industries:
communications equipment, technology hardware, storage and peripherals and
electronic equipment, instruments, and components. Communications equipment
includes routers, telephones, and switchboards. Technology hardware, storage
and peripherals includes computers, printers, and cell phones. Electronic

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equipment, instruments and components include companies that make equipment
like barcode scanners, transformers, and security systems, as well as companies
that are distributors or Original Equipment Manufacturers (OEM). An OEM is a
company that makes parts or components that are used in another company’s
product. For example, many Dell computers use Intel processors and have
Windows pre-installed--Intel and Microsoft could be considered OEMs for Dell.
Examples of companies that produce technology hardware and equipment include
Apple, HP, Dell, Motorola, Cisco Systems, SanDisk and Western Digital.

Industry Sub-Industry Description

Communications Equipment Companies that produce
such equipment’s which
Communications helps in smooth flow of
Equipment communication. Such
as, local area networks
(LAN), routers,
telephones, and
switchboards. This
excludes companies that
make cell phones.
Technology Hardware,
Companies that produce
Storage & Peripherals
cell phones, PCs,
Technology
servers, electronic
Hardware, Storage
computer products and
& Peripherals
peripherals. This also
includes motherboards,
audio and video cards,
monitors, keyboards,
and printers.
Electronic Equipment & Companies that produce
Instruments electronic equipment,
including
scanner/barcode
products, lasers, point-
of-sale machines/cash
registers and security
Instruments & systems.
Components Electronic Components Companies that produce
electronic components,

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 including transformers,
electronic capacitors
resistors, electronic coils
and connection devices.
Electronic Manufacturing Companies that produce
Services electronic equipment as
an Original Equipment
Manufacturer (OEM).
An OEM is a company
that makes a part or
component that is used
in another company's
end product.

c) Semiconductors and Semiconductor Equipment

Semiconductors are substances that can conduct electricity under some
conditions, but not others, making them ideal for controlling electrical currents.
Silicon is a material that is frequently used as a semiconductor. This industry
group includes both companies that make semiconductors and companies that
make peripheral equipment for semiconductors.
Examples of companies that make semiconductors and related equipment include
Intel, Microchip Technology, Nvidia, QUALCOMM and Texas Instruments.

Industry Sub-Industry Description

Companies that produce

semiconductor
equipment, including
Semiconductor Equipment manufacturing raw
materials and creating
Semiconductors & equipment used in the
Semiconductor solar power industry.
Equipment
Companies that create
semiconductors,
Semiconductors including companies
that make solar modules
and cells.

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 IT INDUSTRY IN INDIA
IT Services in India played a major role in changing and shaping business
standards and processes. Major services include software development,
consultancies, software management, online services, and business process
outsourcing (BPO).
According to NASSCOM, aggregated revenue of this sector in the year 2019 was
US$180 , with export revenue standing at US$99 billion and domestic revenue
at US$48 billion, growing by over 13%. As of 2020, India's IT workforce
accounts for 4.36 million employees. The United States accounts for two-thirds
of India's IT services exports.

2.1 Major Information Technology Hubs in India

1. Bengaluru
2. Hyderabad
3. Chandigarh
4. Kolkata
5. Chennai
6. Pune

2.2 Top IT Companies in India

Company Name Core Services Founder

Member & Year
of Establishment
HCL Software Services, Founded in the
Technologies Infrastructural Management year 1976 by Shiv
Ltd. Services, Business Process Nadar.
Outsourcing
Infosys Ltd. Information Technology, Founded in the
Outsourcing Services and year 1981 by N.R.
Business Consulting Narayana Murthy.

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Larsen &Toubro Digital and Automation Established in the
Infotech Ltd. Solutions, IT Service Year 1997 by
Management, and IT Consulting. A.M. Naik
Mindtree Ltd. Mobile Applications, E- Founded in the
Commerce, digital year 1999 by
transformation, cloud Subroto Bagchi,
computing, data analytics, Ashok
EAI and ERP. Soota, Namakkal
Parthasarathy,
Krishnakumar
Natarajan.
Mphasis Ltd. IT, Business Consulting and Mphasis Ltd was
Outsourcing Services founded in the
year 2000 by Jerry
Rao, Jeroen Tas.
Oracle Financial Business consulting, outsourcing Oracle Financial
Services services, and IT services. It Services Software
Software Ltd. Provides IT Solutions to banking Ltd was founded
Industry. in the year 1990
Quess Corp Ltd. People & Services, Global Quess Corp Ltd
Technology Services, Integrated was founded in
Facilities Management, and the year 2007
Industrial Asset Management.
Tata IT, Business Consulting and The company was
Consultancy Outsourcing Services established in the
Services Ltd. Worldwide. year 1968.
Tech Mahindra Next-Gen Solutions, Cloud,
Ltd ADMS Java and Open Source,
Consulting, Customer
Experience, etc.
Wipro Ltd The Company’s IT Services Wipro Ltd was
business provides a range of IT founded in the
and IT-enabled services year 1945 in
Amalner,
Maharashtra, by
Mohamad Premji.

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 2.3 Peer Comparison of Some Top IT Companies in India

COMPANY MCAP (In P/B P/E EPS ROE% ROCE% P/S EV/EBITDA
CR.)

TCS 9,27,683.31 11.6 30.27 81.66 43.73 56.18 7.07 21.66

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Infosys 4,28,667.18 6.50 26.82 37.52 24.98 32.96 5.42 17.86

HCL Tech. 2,19,657.62 5.54 23.03 35.14 26.48 33.59 6.74 15.21

Wipro 1,77,163.48 3.65 20.00 15.50 18.19 21.78 3.51 13.40

Tech 74,191.30 3.27 16.25 47.24 21.53 23.79 2.54 11.86

Mahindra

L&T 44,072.18 7.98 28.11 89.81 32.00 41.82 4.33 18.55

Infotech
Oracle Finl. 26,177.95 4.52 15.48 196.69 34.97 42.96 7.43 10.60
Service
Mphasis 24,332.72 6.37 20.29 64.26 35.27 39.14 5.60 14.89

2.4 FINANCIAL STRENGTHS AND LIMITATIONS OF

COMPANIES

a) TCS
STRENGTHS

• The Company is Virtually Debt Free.

• The Company has a good ROE track record of 38.52%.
• The Company has healthy Operating Margin of 28.45%.

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b) INFOSYS
STRENGTHS

• The Company is Virtually Debt Free.

• The company has effective cash conversion ratio of 100.19.

LIMITATIONS

• The company has delivered poor profit growth of 4.00% over past 3
years.

c) HCL TECH.
STRENGTHS

• The Company is Virtually Debt Free.

• The Company has a good ROE track record of 27.41%.
• The company has effective cash conversion ratio of 109.88.
• The Company has healthy Operating Margin of 39.20%.

d) WIPRO
STRENGTHS

• The Company is trading at a PE of 12.94.

• PEG ratio is 0.99%.
• The company has effective cash conversion ratio of 104.46.

LIMITATIONS

• The company has delivered poor profit growth of 2.08% over past 3
years.
• The company has delivered poor Income growth of 3.06% over past 3
years.

e) TECH MAHINDRA
STRENGTHS

• The Company is trading at a PE of 12.03.

• The Company is Virtually Debt Free.

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LIMITATIONS

• Company has contingent liabilities of 12,236.70 Cr.

f) L AND T INFOTECH
STRENGTHS

• The Company is Virtually Debt Free.

• The Company has a good ROE track record of 34.73%.
• The company has effective cash conversion ratio of 105.91.

g) ORACLE FINL. SERVICE

STRENGTHS

• The Company is trading at a PE of 11.03.

• The Company is Virtually Debt Free.
• The Company has been maintaining a healthy Dividend Yield of 4.11%.
• The Company has a good ROE track record of 34.30%.
• PEG ratio is 0.67%.
• The company has effective cash conversion ratio of 93.81.
• The Company has healthy Operating Margin of 54.00%.

LIMITATIONS

• The company has delivered poor Income growth of -1.92% over past 3
years.

h) MPHASIS
STRENGTHS

• The Company is trading at a PE of 10.29.

• The Company is Virtually Debt Free.
• The company has delivered average Profit Growth of 24.46% in last 3
years.
• PEG ratio is 0.37%.
• The Company has healthy Operating Margin of 29.46%.

LIMITATIONS

• Company has contingent liabilities of 1,613.50 Cr.

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2.5 Analysis of Top IT Companies
From the above analysis of Top IT Companies, we can see following positive and
negative aspects about IT Companies in India:
1. Most of the IT Companies are virtually debt free which infers excellent
management of finances.
2. Most IT Companies have an excellent cash conversion ratio, which infers high
liquidity.
3. Most IT companies have a great return on their capital employed.
4. Most IT companies have an excellent operating margin, which signifies
companies’ growth.
5. Most IT Companies have high Return on Investment and profitability rate as
well.

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 EVOLUTION OF THE IT
INDUSTY

Let us look at where IT started, and how it got here it is today. The evolution of
the IT industry can be viewed in four stages:

• Stage 1 Prior to 1980

In the initial stage of the evolution of the IT industry, it was basically started with
hardware products and software industry which did not exist in India until the
1960s.

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The origin of IT industry in India started way back in the year of 1974.
In hardware sector, the government protected this sector by high tariff barriers
and licensing.
In software sector, there was a great demand in the west as the software which
was inbuilt with the systems was insufficient to perform all the functions
properly. So, to earn more foreign exchange, the Indian Government found out
the potential of the software sector.
In 1972, the government launched a new software export scheme. In this scheme
there was decided to import hardware and export software. TCS Ltd. became the
first company to accept such a scheme, to send software programmers for
installing system software for a U.S. client.
The first software export zone SEEPZ was set up in Mumbai / Bombay in the
year 1973.
In 1974, the software export was started in India. Around 80 percent of the India‘s
software exports was out of SEEPZ, Bombay in 1980s.

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• Stage 2 1980 to 1990
In this stage, despite government initiatives which formulate a new software
export scheme which could not be reached at the expected level because of two
reasons:

1. First, the export of software was dependent on the imports of hardware.

2. Second, there were no proper infrastructural facilities for software

development. To encourage more participants in this sector, it was mandatory
to reduce import duty and to simplify import and export procedures.

To overcome the above problem, a new software policy was formulated.

According to this policy, the import procedure was simplified and the import duty
for import on hardware for software developers was reduced. The policies also
included that the software industry was given a status of an industry, thereby
making it possible for investment and thereby entitled for incentives as other
domestic industries.

In 1986-87, the government took various steps and worked on mainly three wide-
area computer networking schemes:
1. INDONET (intended to serve the IBM 5 mainframes in India)
2. NICNET (the network for India's National Informatics Centre)
3. (ERNET) Education and Research Network

As a result, the Indian Government software policy and liberalized the IT sector.
According to this policy, the imports of hardware were de-licensed and were also
made duty free for exporters. This policy has reduced the number of entry barriers
making the growth in this sector inevitable.

In 1988, the World Market Policy and the establishment of the Software
Technology Parks of India (STP) scheme helped to attract foreign direct
investment and duty free import on all inputs and products.

• Stage 3 1990 to 2000

During this stage, there were some significant changes in Indian economy,
including trade liberalization, relaxation in the entry barriers, opening of Indian
economy for foreign investments and devaluation of rupee.
Due to the liberalization, a flow of foreign investments was come in India and
MNCs in India were introduced.

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During 1991, Software Technology Parks of India (STPI) was formed by
Department of Electronics which being owned by the government. Government
provide a communication called VSAT which means without moving away from
its monopoly. This STPI set up in different cities, each of which provided satellite
links to be used by companies.
In 1993, the government started to allow individual firms which allowed work
done by India can be transmitted abroad directly.

• Stage 4 Post 2000

Around the year 2000, IT went from that department of nerds who fix your
computer when it is broken and make software updates. It is considered that the
company grows information that becomes more and more complex, by which it
is increasing the amount of oversight from an information specialist.
By the time changes, technology was improved, the speed of transmission of
information was increased and also importance of IT was also compounded.
Many of the US firms was forced to utilized the services of the Indian firms and
the problems like Y2K, the dotcom crash, and the recession in the US economy.
This has resulted in placing the Indian IT industry on the global map.
Post-2002-2003, the industry had registered a robust growth rate. During this
stage, there was an increase in the Indian client base, large sized contracted, and
a strong global delivery model.
The share of IT industry (software) exports raised from 1 percent of the total
exports in 1990 to 38 percent of the total exports in 2011. Bangalore is known as
the Silicon Valley of India and contributes around 33% of Indian IT Exports.
Also, IT industry has brought a far-reaching improvement in the quality of life in
the community. As the international economy is sluggish, and the macro
economic situation continues to be challenging, IT companies are looking for
ways to reduce spending and improve their output. The government was investing
in various e-governance. The Indian information technology (IT) industry has
played a major role in placing India on the international map.

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 MARKET ANALYSIS OF
IT INDUSTRY
Anticipated growth in India
The worldwide sourcing market in India keeps on developing at a higher
movement contrasted with the IT business. India is the main sourcing objective
over the world, representing roughly 55 percent piece of the pie of the US$ 200-
250 billion worldwide administrations sourcing business in 2019-20. Indian IT
and BPM organizations have set up more than 1,000 worldwide conveyance
communities in around 80 nations over the world.

India has become the advanced abilities centre point of the world with around 75
percent of worldwide computerized ability present in the nation.

Market Size
IT industry's income was assessed at around US$ 191 billion in FY20, developing
at 7.7 percent y-o-y. It is assessed to reach US$ 350 billion by 2025. In addition,
income from the computerized fragment is required to frame 38 percent of the

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all-out industry income by 2025. The computerized economy is assessed to arrive
at Rs 69,89,000 crore (US$ 1 trillion) by 2025. The homegrown income of the IT
business was assessed at US$ 44 billion and fare income was assessed at US$ 147
billion in FY20.
The all-out number of representatives developed to 1.02 million in total for four
Indian IT majors (counting TCS, Infosys, Wipro, HCL Tech) as on December 31,
2019. Indian IT industry utilized 205,000 fresh recruits and had 884,000 carefully
gifted ability in 2019.
Speculations/Developments
Indian IT's centre skills and qualities have pulled in critical speculation from
significant nations. The PC programming and equipment segment in India pulled
in total Foreign Direct Investment (FDI) inflow worth US$ 44.91 billion between
April 2000 and March 2020. The segment positioned second in FDI inflow
according to the information delivered by the Department for Promotion of
Industry and Internal Trade (DPIIT).
Driving Indian IT firms like Infosys, Wipro, TCS, and Tech Mahindra are
enhancing their contributions and displaying driving thoughts in blockchain and
man-made brainpower to customers utilizing advancement centres and innovative
work communities to make separated contributions.
A portion of the significant improvements in the Indian IT and BPM area are as
per the following:
• In May 2020, SirionLabs, a product as-an administration (SaaS) supplier, raised
US$ 44 million as a major aspect of its Series C round drove by Tiger Global and
Avatar Growth Capital.
• PE (private value) interest in the area remained at US$ 11.8 billion across 493
arrangements in 2019.
• In January 2020, Nippon Telegraph and Telephone, a Japanese tech reported its
arrangements to contribute a critical aspect of its US$ 7 billion worldwide duty
for server farms business in India throughout the following four years.
• In February 2020, Tata Consultancy Services sacked an agreement worth Rs
10,650 crore (US$ 1.5 billion) from pharma organization Walgreens Boots
Alliance.
• UK-based tech consultancy firm, Continue, was gained by Cognizant.
• In May 2019, Infosys gained a 75 percent stake in ABN AMRO Bank's auxiliary
Stater for US$ 143.08 million
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• In June 2019, Mindtree was gained by L&T.
• Nasscom has dispatched an online stage that is focused on up-skilling more than
2 million innovation experts and skilling another 2 million possible
representatives and understudies.
• As of February 2020, there were 417 endorsed SEZs the nation over with 274
from IT and BPM and 143 as trading SEZs.

Government Initiatives
A portion of the significant activities taken by the Government to advance the IT
and BPM area in India are as per the following:
• In May 2019, the Ministry of Electronics, and Information Technology (MeitY)
dispatched the MeitY Startup Hub (MSH) entrance.
• In February 2019, the Government delivered the National Policy on Software
Products 2019 to create India as a product item country
• The Government has distinguished Information Technology as one of 12 victor
administration areas for which an activity plan is being created. Additionally, the
Government has set up a Rs 5,000 crore (US$ 745.82 million) subsidize for
understanding the capability of these victor administration segments.
• As part of Union Budget 2018-19, NITI Aayog set up a public level program to
empower endeavours in AI^ and influence AI^ innovation for building up the
nation.
• In the Interim Budget 2019-20, the Government declared designs to dispatch a
public program on AI* and setting up of a National AI* gateway.
• National Policy on Software Products-2019 was passed by the Union Cabinet
to create India as a product item country.

Accomplishments
Following are the accomplishments of the Government during 2019-20:
• About 200 Indian IT firms are available in around 80 nations.
• The all-out fare income of the business is relied upon to develop 8.1 percent y-
o-y to US$ 147 billion in FY20. IT division represented the biggest offer in the
Indian administrations trade at 45 percent.

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• The complete number of representatives developed to 1.02 million in total for
four Indian IT majors (counting TCS, Infosys, Wipro, HCL Tech) as on
December 31, 2019.
• Indian IT industry utilized 205,000 recently recruited employees and had
884,000 carefully gifted ability in 2019.

4.1 IT INDUSTRY SWOT ANALYSIS

• STRENGTH:

Strengths can be both external (Related with business environment) as well as

internal to IT industry (Related with their internal processes and management).
1. Rise in number of internet users, and mobile phone users in last few years.
2. Rise in Demand of Hardware and Software Products in Indian Market post
Covid outbreak.
3. Supportive Government Policies and recent initiatives like National Digital
Health Mission.
4. Commitment to prevalent quality and cycle execution.
5. Strong Brand and Long-standing customer connections.
6. Ability to scale Innovation and administration.

• WEAKNESSES:

1. Too much reliance on BFSI (Banking Financial Services and Insurance)

division.
2. Low R&D spends when contrasted with other developed nations.
3. Low ability in very good quality administrations, for example, Consultancy
and KPO.
4. High spending on Research and Development.
5. Delay or cancellation of Revenue in First Quarter due to global lockdown and
cancellation of some projects by IT companies.

• OPPORTUNITIES:

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1. Plenty of degree for the Indian Software industry to tap Global IT spending of
3.7 trillion USD in the year 2019.
2. Government Plans to increase seats capacity of premium institutes like IIT
Delhi by the end of year 2024.

3. To restructure their work and work culture post pandemic.

4. Tapping the existing customer and disrupting market with emerging IT Trends
like: Big data, Artificial Intelligence, Machine Learning, Blockchain and Cyber
Security.
5. Creating close shore workplaces and improvement focuses on cost advantage
nations, for example, – Latin America and Eastern Europe.
6. To tap and explore the market of both hardware equipment’s (like laptop, cell
phones) as well as software products due to sharp rise in demand post Covid
outbreak.

• THREAT:

1. Increased rivalry from low-wage nations in recent times from countries like
China.
2. Lack of Technological supportive environment in tier 2 cities.
3. Market portion of different Indian IT Firms
4. High spending on Research and Development
5. Security Threats due to the shift in work from home culture (like: hacking
Virtual Private Networks, Zoom Bombing, exposure of sensitive information to
outsider)

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4.2 PEST ANALYSIS OF IT INDUSTRY
The business condition of the business comprises of the apparent multitude of
outside impacts that influence its choices and execution. Given the huge number
and scope of outer impacts, Political, Economic, Social, and Technological or
(PEST investigation) structure gives a framework to sorting out data with respect
to outside powers that influence the business.
Various positive as well as the negative aspects of PEST analysis are mentioned
below:
• POLITICAL:

An analysis of IT industry’s political environment gives both positive and

negative aspects about political environment. Key aspects are:
Positive Aspects:
1. Relations with significant forces – the Indian government keeps up great
relations with every significant force and force coalitions of the world. This
prompts Indian firms not getting prohibited in the offering cycle
2. Government Policy – Indian government has taken some welcoming steps to
promote digital payments, digital transactions, etc. , framed certain policies like
National Policy on Software Products-2019 which was passed by the Union
Cabinet to create India as a product item country. Also, the latest initiatives like
Digital India, Digital Locker System, National Scholarship Portal, National
Digital Health Mission are welcoming and could be a boom for Indian IT
industry.
Negative Aspects:
1. Political Instability – Indian political framework is entirely unstable. It is
because India is a federal democratic government, which elects its ruling
government by democratic voting process after every five years. Hence, policies,
initiatives implemented by one government might change in case ruling party
changes in next term. Also, different representatives in states and central
government might results in conflicts and results in lack of implementation.
2. Possibilities of war – Skirmishes with neighbouring countries like Pakistan and
China could prompt significant psychological militant assaults or an undeniable
war because of which future growth of IT infrastructure remains uncertain.

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• ECONOMICAL:

Positive Aspects:

1. Positive Growth in Export of Services: As according to National Association

of Software and Service Company (NASSCOM) India’s IT Sector’s exports
grew 8.1 % to 147 $ billion in fiscal year 2020.
2. Continuous Rise in IT Sector’s contribution to GDP : As according to
NASSCOM, IT sector has increased its contribution from 1.2% in the year 1998
to 7.7% in the year 2017, a clear indication of growth in the demand and spending
on IT Industry in India.
3. Labour Cost – Indian Programming costs are among the most minimal on the
planet, giving a cost advantage to the country.
Negative Aspects:
1. A Continuous Decline in GDP Growth Rate: Indian GDP Growth Rate is in
continuous declining state from last 3 financial years as the growth declined
from 7 percent in the year 2017-18 to 4.2% in the financial year 2019-20. First
quarter of financial year 2020 witnessed a negative decline of 23%.
2. Lockdown across globe may impact exports: Top Software exporters like Tata
Consultancy, HCL Technologies, have their major clientele in USA and
Europe which will be impacted by lockdown.
3. Income Disparity: In India, many tier-2 cities are not yet explored with basic
digital infrastructure and facilities.

• SOCIAL:

Positive Aspects:
1. Language Spoken – Indian programming staff is agreeable in the English
language and in working together in English.
2. Education – numerous specialized foundations, schools, and world class
institutions like IIT Delhi continuously are on continuous rise and provide IT
training.
3. Working-age population – As according to an article in stastia, 67 % of Indian
population lies in the age group of 15-64 years of age bracket, which makes India
a relatively young country as compared with others. Hence, various programmers
can be found at a lower cost in Indian Market.

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Negative Aspects:
1. Lack of Jobs for Engineering Students: As according to various studies, every
year more than 15 lakh engineers graduate from 4000 institute approx., which
is greater than engineers produced by developed nations like USA and China.
However this, creates a gap between demand and supply and many engineers
remains unemployed due to limited job opportunities.

2. Lack of Innovation and disruption of technology: Most Indian application

software companies aim for emulating the successful technological disruption
in western countries instead of focusing on original innovation. For example:
Ola was launched in India after success of Uber in Western Countries. Hence,
a need for promoting innovation and entrepreneurship is a must in country. As
according to recent reports, India ranks 48th in Global Innovation Index,
despite of continuous increase in IT Spending.

TECHNOLOGICAL:

Key Technological Aspects are:

1. India has among the world's most reduced call rates, after Mukesh Ambani led
Jio disrupts the market.
2. India has world’s largest internet population at over 483 million users in 2018.
3. Enterprise telephone utilities, for example, 5G mobile mobiles phones are i n
their earlier life cycle stage of development.
4. IT Industry in India has a lot of potential to invest in new age technologies like:
Big Data, Artificial Intelligence, Machine Learning, Block chain cyber security,
etc.

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 CUSTOMERS OF IT
INDUSTRY
IT Industries has millions of clients based in various countries across the globe
which includes organizations, individuals, government agencies, etc.

The main customers of Indian software industry are United States based Fortune
500 firms, Fortune 5000 firms, companies based in UK, Japan and from other
geographies as well. Other big customers include the Indian government and
other Indian firms, and agencies.

The Indian software industry is dotted with numerous players however, the large
firms with more than USD 1 billion of annual revenue are TCS, Infosys
Technologies, Wipro Technologies, HCL Technologies, and Tech Mahindra.
These can also be denoted as the Big 5 of Indian software industry landscape.

Next come the mid-tier firms those whose revenue have been between 500
million to 1 billion dollars. These are EDS Mphasis, Patni Computers etc.

At the next run there are firms with revenues between 250 million and 500 million
dollars. However, the industry landscape is dotted with numerous small firms
who perform tasks outsourced by the big 5 firms. These organizations are also
the producers of software services.

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5.1 Indian IT Companies discloses their customer names after
post Covid-19
As Indian software exporters see business return to normal with Western firms
by outsourcing, they are also witnessing a growing openness among clients to be
identified.
India’s third largest software firm Wipro Ltd has named it customers such as US
electronics retailer Best Buy Co. Inc. and insurer Main Street America Group; it’s
bigger rival Infosys Technologies Ltd announced a three year $150 million
(Rs666 crore) contract from Microsoft Corp. to manage internal IT systems; and
HCL Technologies Ltd has named seven clients, including US publishing group
Advanstar Inc. and French glass maker Saint Gobain.
Suresh Senapaty, CFO at Wipro said that customers are taking steps to restructure
their cost structures. HCL did not comment. Infosys, India’s second largest IT
vendor, said that they have a policy of not naming their customers.

At the beginning of India’s IT growth , Infosys and Wipro had not been reluctant
to name their customers out , but the practice stopped after the tech melt down of
2000-02, when they found that their overseas customers are not willing to be
named because of growing agitation in their country to lose their jobs to Indian
companies.

The companies also did not want to let smaller local rivals to play price card to
take their customers.
During the recent crisis, the worst in decades, many Western companies were
forced to lower down technology budgets and jobs just to remain in market. Now,
as they start making new investments in a recovering economy, they want to
continue keeping costs low to be competitive.
Arup Roy, senior analyst at technology researcher Gartner Inc said that “By
outsourcing to Indian vendors, customers are telling their investors that they are
lowering operating costs to be competitive".
Indian vendors are price competitive compared to other MNC’s. MNCs have a
substantial global delivery presence, including India, yet they still have to go
some more to really match the prices," he said.

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Indian IT firms are more confident about naming customers now because they
have grown bigger and are present in several nations, employing locals in the US
and other Western countries. Also, most of the pricing is transparent to customers
and the differentiator is the value each vendor brings.
Siddharth A Pai , partner and MD at the India office of TPI , an outsourcing
advisory said that there are huge $4-5 billion worth IT companies now those can
execute larger contracts and build their brand over years.
Companies in this industry provide services such as software support, computer
systems design, and data processing facilities management. Major companies
include Cognizant, DXC Technology, and the technology consulting arm of IBM
(all based in the US), along with Accenture (Ireland), Cap Gemini (France), HCL
Technologies (India), Infosys Technologies (India), Tata Consultancy (India),
and Wipro (India).
Worldwide spending on IT services is about $993 billion annually, according to
Gartner. Top exporters of computer services include the EU, India, the US,
Singapore, and Israel, according to the World Trade Organization. A digital
divide regarding access to and use of information and communication
technologies hinders Africa's participation in exports of IT services.
The US information technology (IT) services industry includes about 142,000
establishments (single-location companies and units of multi-location
companies) with combined annual revenue of more than $410 billion.
Demand for IT services is driven by rapid technological advances, but spending
depends on the health of the economy. The profitability of companies depends on
technical expertise, innovative services, and effective marketing. Large
companies have advantages in broad service offerings and global reach, which
give them the ability to provide outsourcing services to big corporate customers.
Small companies can compete effectively by specializing in market niches or by
partnering with larger companies that want to broaden their mix of services. The
US industry is fragmented: the 50 largest companies account for about 40% of
revenue.
5.2 TCS to their customers
As a strategic partner to their Customers across 10 industries, they help them
deliver their business goals and drive technology led transformations.
their clients across the world have achieved significant business results using their
world-class solutions and have recognized them for their efforts: they have been
ranked number one for customer satisfaction in Europe’s largest survey of service

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provider performance. Conducted across 13 countries in Europe by Whitelane
Research. This is the third consecutive year that they have topped the customer
satisfaction ranking for the IT services industry, with TCS also being rated
number one across all nine individual key performance indicators (KPIs).

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 FUTURE OF IT INDUSTRY
The Indian IT industry will be moving at a greater pace than ever towards a new
industrial transformation that is Industry 4.0 by adhering to future technologies
through digital transformation.

With emergence of new path-breaking technologies like Artificial Intelligence,

Internet of Things, Block chain, Machine Learning, modern data science
practices, cloud computing and big data and introduction and implementation of
Micro services, Developer-Operations and automation in most of the industrial
sectors, the future of IT industry in India is bright.
The ongoing success of the sector, particularly business process management
(BPM) and re-engineering specialists in digital transformation, rapid expansion
for global captive centres in India, and accelerating growth of deep tech and
business to business entrepreneurial firms are all key reasons that will help the IT
Industry grow in future.
It is estimated that in the coming 10 years, the number of jobs in the IT industry
will get doubled along with better academic facilities, greater research for the
subject of Information Technology and its practices.
The economy’s turn towards smart cities, smart transportation, smart agriculture,
and smart healthcare, will be able to provide opportunities to build companies of
stature and scale and in the next 10 years, these can be expected to contribute half
the market value and at least 10% of the revenues of the industry.

6.1 Current Market Size and Developments to Come in the IT and

ITES Industry:

With a 6.1% growth in the year 2019, India’s IT-BPM sector stood at $177 Billion
and approximating growth at this rate, the industry will develop to $ 350 Billion
by the year 2025.

Speaking of IT and ITES Industry; it grew to $ 181 Billion in the financial year
of 2019 as domestic revenue advanced to $ 44 Billion. The forecast of the revenue
of IT and ITES Industry by the year 2025 rolls to $ 350 Billion.

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India’s IT competencies have brought significant international attention in terms
of investments. In the tenure of 2000-2019, FDI or Foreign Direct Investment
was about $ 39.4 Billion.

Major areas of investment under the IT and ITES umbrella lies in Artificial
Intelligence, Blockchain, Internet of Things or IoT, RPA or Robotic Process
Automation, and other diverse fields under the same folds of technology.

6.2 IT advancements that will transform the Industry in the next

20 years:

1. Internet of Things: IoT

The Internet of Things (IoT) describes the network of physical objects—

“things”—that are embedded with sensors, software, and other technologies for
the purpose of connecting and exchanging data with other devices and systems
over the internet.
It is changing how we live, work, travel, and do business. It is even the basis of a
new industrial transformation, known as Industry 4.0, and key in the digital
transformation of organizations, cities, and society overall.

Investments in IoT technology services is growing faster than that in IoT

products. Cloud service providers, analytics and infrastructure providers are
driving the IoT solutions market. As a technological shift, IoT is moving from a
centralized to a cloud-edge architecture and moving away from conventional
processor chip enabling new edge architecture.

In the Indian market, 20 billion devices are to be connected to IoT by 2021. IoT
is growing at a rapid pace and its adoption is spreading into various industries
such as telecom, healthcare, retail, automobiles, manufacturing, supply chain, and
service operations. However, security remains as one of the barriers.

Industrial IoT (IIoT) opportunity is set to surpass consumer internet by 2020. IIoT
enables seamless dataflow across systems/applications/equipment and ERP for
centralized monitoring, management, and control centre.

The next 20 years will see sensors incorporated on machinery, equipment, heating
units, security systems, and pretty much everything – and IoT will play a
significant role in this.
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2. Artificial Intelligence & Robotics:

Though the concept of Artificial Intelligence is well over 60 years old, it has only
become popular in the last decade. With passive operational power and storage,
AI can transform business strategies like no other. Self-driving cars, robotics, new
teaching methods, and even personalised medicines – AI is set to take over.
Artificial Intelligence (AI) is expected to boost India's annual growth rate by 1.3
per cent by 2035, as per NITI Aayog. A substantial increase in AI by Indian firms
can result in a 2.5 per cent increase in India’s Gross Domestic Product (GDP) in
the immediate term.

3. Hybrid Cloud Computing:

Global cloud computing spending is predicted to almost double by 2022. Hybrid

cloud adoption saw a big rise in recent years, with an expected CAGR of 17%.
The security features on cloud have become promising and it is becoming a
priority to safeguard and protect application data and infrastructure.

High cloud adoption is observed in finance and accounting, supply chain and
logistics, and IT management. The emerging areas are customer management,
marketing, procurement and manufacturing and operations. On demand
scalability and optimal utilization as per demands can facilitate cost savings by
migrating to an ERP on cloud.

4. Blockchain:

Globally and in India blockchain has progressed to different levels of maturity

and looks promising in India.

The government is the most critical stakeholder and enabler of blockchain, while
BFSI leads adoption in India.

Currently, 40+ blockchain initiatives are being executed by the public sector in
India. At nearly 50%, BFSI has the maximum production level implementations

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in India. Logistics, retail, and manufacturing account for nearly 25% of
blockchain implementations.

Blockchain is transforming from the experimental model to a business case

centric model, which will result in more projects moving to the production phase
where over 70% of implementations will deliver cost savings or operational
efficiencies.

Integration of finance and supply chain domain with blockchain using industry-
specific blockchain scenarios will be facilitated by modern ERPs. Blockchain
enhances the existing benefits of ERP system to another level.

5. Augmented Reality

In the future, Augmented Reality will find its application in education, art,
architecture, military, and navigation – the possibilities are truly endless.
Augmented reality is no longer science-fiction, thanks to the IT technological
advancements in the last decade. While earlier, the costs associated with AR
meant that projects were few and far apart, today, technology has made it possible
for AR to be available even on the mobile handset.

6.3 Major challenges that the IT Industry in India will be facing in

the future are:

• High unemployment rate of IT professionals

According to corporate surveys, only 20% of the Indian engineering graduates

are considered employable because of lack of skills and absence of right attitude.
• Changing Technology and trends

Global advisory firm, Mckinsey & Company declared that nearly half of the
workforce in Indian IT sector will be irrelevant over the next 3-4 years. It was
backed by Capgemini CEO declaring 65% of workforce is not trainable and not
keen on upgrading their skills.

• Loss of jobs due to automation

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According to Sources, Indian Information Technology sector is likely to lose
around 6, 40,000 jobs due to automation.
• Conventional Jobs to be replaced

Typical manual jobs is expected to be taken over by automatic coding and cloud
computing technologies.
• World Bank Report

World Bank report titled ‘Digital Dividend’ declares that 69% of work in India
can get automated. This may lead to a sudden crisis in the Indian IT industry.
The road ahead for Information Technology industry in India
IT can undoubtedly be considered as one of the most emerging fields yet the
challenges are many to tap this resource and use its full potential for the
development of the country.
With time Information Technology promises to be less of an isolated technology
and is directed towards being an integral part of all development in almost all
leading sectors. India today is regarded as the back-office of the world owing to
IT and ITs industry blooming in India.
It is known that anyone resisting change perishes. The world of Information
Technology is undergoing major transition globally from simple software
development to integrated solutions involving emerging technology stack like
cloud computing, Big data and artificial intelligence. And therefore India must
prepare its workforce accordingly, stay open to new policies and flexible to their
approach regarding the industry.
If the country manages to transit smoothly and create a skilled workforce added
with expertise in core as well as emerging technologies, establishing more
product based start-ups driven by technology and innovation there will be no
stopping India in the Information Technology industry for a long time to come.

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 CONCLUSION

In a nutshell, IT Industry, comprises of various products and services such as :

Software and Services, Technology and Hardware Equipment’s and Semi-
Conductors , etc. is in growing stage in India with major key players like: HCL,
Laursen and Turbo, MindTree, Tata Consultancy Services, etc. With continuous
increase in exports, continuous growth in contribution to GDP, IT Industry has
great potential to unlock.
An analysis of IT Industry’s evolution made us realize IT Industry has evolved
through various stages in past due to various government policies and external
factors, and the analysis of current market conditions with SWOT Analysis and
PEST Analysis gave us an insights about their strengths which lies in supportive
policies and rising demand , opportunities which arises in restructuring IT
Structure and tapping current IT Trends (like block chain, artificial intelligence),
and weaknesses and threats which arises due to lockdown, work from home
culture and political instability.
Also, a close look at IT Industry customer in India made us realize that key
customers of Indian IT companies are fortune 500 companies based in US, UK,
Japan, etc. as a result of which a Indian export is consistently growing with 8.1
% growth in fiscal year 2020.

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