India's Software Market Revenue to Reach US$ 7.6 billion by End of 2021, according to IDC

According to a report published by International Data Corporation (IDC) on global ‘Semi-annual Software Tracker 2H20 (July–December)’, the software market in India is estimated to reach US$ 7.6 billion by the end of 2021, from US$ 7.0 billion in 2020. In 2020, India’s market share to the Asia/Pacific (excluding Japan and China) (APEJC) software market, was estimated at 17.5%. The market was led by players such as SAP, Microsoft and Oracle.

Ms. Shweta Baidya, Senior Research Manager for Software and IT Services at IDC India said, "The pandemic played a catalyst role in driving the software market as businesses re-examined their IT strategies and brought solid measures to transform to digital business models. Digitally matured businesses were able to easily route through the challenge and sustain business continuity and operational flexibility. However, businesses with traditional business models outlined new strategies to use cloud and digital to remain significant and reliable. Investment in joint platforms, security re-architecture and network transformation observed a growth in the last few quarters.”

IDC categorises the software market into three key categories: systems infrastructure (SI) software, applications and application development and deployment (AD&D). In 2020, applications accounted 60.4% share to the overall market revenue, followed by AD&D with 21.6% and SI software with 18.0% share.

As per IDC's present estimates, in terms of revenue, the key leading software include collaborative applications, customer relationship management (CRM) applications, engineering applications, enterprise resource management (ERM) applications, and management applications and content workflow. In 2020, the collaborative applications market registered the highest growth at 36.7%, followed by artificial intelligence (AI) platforms and system at 30.9% and service management software at 24.8%.

India Market Forecast

As per IDC, the software market in India is estimated to grow at a CAGR of 11.6% from 2020 to 2025. Indian businesses are expected to continue investments in technologies and expand innovation to boost operational effectiveness and employee efficiency, and in turn, sustain business momentum. IDC anticipates acceleration in demand for technologies, such as conferencing and collaborative applications, robotic process automation (RPA) software, digital commerce applications, AI platforms and IT service management (ITSM) software, among others. Additionally, cloud is also developing into one of the key elements of businesses' digital strategy. IDC expects the role of software-as-a-service (SaaS) and platform-as-a-service (PaaS) markets to the overall software market to grow from 36.8% in 2020 to 57.1% in 2025.

Ms. Baidya added, “Amid all the pandemic induced challenges, India remained to be one of the most robust markets across the APEJC region. Software market in India recorded an increase of 13.4%, the highest in the region. Business sentiments enhanced in the second half of the year and investments accelerated rapidly on digital work models to facilitate easy transition to a remote work environment. IT budgets were re-assigned and allocated in agreement with the increased spending on evolving technologies. Software vendors have been actively gaining customers by assisting them in the digital journey with adaptable and scalable opportunities.”

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.