India's enterprise software market is forecast to maintain its strong performance, with an estimated compound annual growth rate (CAGR) of 14.6 percent from 2011 to 2016--the highest growth rate in the world--according to research firm Gartner."
The research firm predicts that despite the challenging economic conditions, the enterprise software market in India will grow by 13.7 percent in 2012, with revenue reaching $3.45 billion in the same year.
"The primary drivers of growth have been domestic demand, growing maturity of users, and incremental enhancements in technology," said Asheesh Raina, principal research analyst at Gartner.
While priority in software spending will be given to areas such as analytics and business intelligence, mobility solutions, cloud computing, collaboration technologies, and social media, Gartner sees enterprise content management, web conferencing and social platforms, CRM, security, and office suites as the fastest-growing segments.
"India enjoys a rich presence of international software and hardware vendors, backed by a very strong ecosystem of system integrators, service providers, and business partners. A combination of sustainable domestic demand, presence of global vendors, and entry of new small vendors with innovative products have made the overall ecosystem apt for robust growth," Raina added.
It was pointed out that India will become the fourth largest enterprise software market in the APAC region, with the country expected to account for 11.4 percent of the region's total revenue of $30.30 billion this year.
"End-users in Asia/Pacific are expecting to increase their spending on application and infrastructure software, with China and India being the most optimistic and leading the way for budget increases, followed closely by Indonesia and Singapore," said Raina.
Even though India's share of the APAC software market will rise to 12.68 percent, and will represent $5.98 billion in revenue, Gartner does note that the software market in India is still relatively small and evolving, as compared to other countries in the APAC region such as China, which had a 26.34 percent share of regional spending in 2011.
"The high intention to increase budgets in India is expected because of the rapidly growing economy, globalization of operations, foreign direct investment (FDI) in retail and aviation, and ongoing investment in India as a customer service-related outsourcing destination. Optimism regarding spending within Indian organizations reflects confidence in India's regional economic performance, as well as the need to adopt better technology to effectively compete in a tougher global environment," Raina said.