India's share in world IT? 1.4%

The market for global information technology services grew 6.2 per cent to $569 billion in 2003, up from $536 billion in 2002, according to preliminary results from Gartner Inc, global research firm on and analysis information technology industry.

Intensifying activity in offshore outsourcing, in which companies shift jobs across national borders, contributed modestly to the overall growth.

The United States-based vendors continued to lead the worldwide IT services market, attracting 59 per cent of total spending.

IBM remained the largest competitor, with revenues rising 6.2 per cent to $42.6 billion, and its market share unchanged at 7.5 per cent.

India-based vendors represented a small segment of the worldwide market, with 1.4 per cent of the total revenues.

However, their revenues collectively increased 29 per cent, compared with only a 4 per cent growth among US-based vendors.

Domestic vendors depend almost entirely on exports, with 92 per cent of their revenues coming from customers outside India and only 8 per cent within India.

"Vendors based in the US and India have been most successful at driving sales outside their native regions of North America and Asia-Pacific," said Kathryn Hale, principal analyst for Gartner's worldwide IT services group.

Vendors based in other countries tend to sell primarily in their own country, then expand within their local region. As a result, vendors based in the US and India are more experienced in global sourcing and best positioned for global expansion, the report added.

"The gradual merging of the Indian economy with the global economy is opening up the Indian market for international competition," said Ravindra Datar, principal analyst for Gartner IT services research in India.

"This is encouraging enterprises in India to invest in technology and global best practices, further driving demand for IT services in India."

The strengthening of many international currencies against the dollar had a significant impact on revenue results in 2003.

"Although the growth of services industry improved compared with the decline of 0.3 per cent in 2002, growth rates were inflated by changes in the exchange rate of the US dollar," the report said.

IBM remained the leader in Europe, Middle East and Africa region for IT services, with its $14.6 billion in revenues representing 11.6 per cent of total revenues in the region. EDS held onto the second position, although its IT services revenue was less than half that of IBM in the region.

IT services revenue in the Asia-Pacific grew 10.3 per cent in 2003. Much of the growth occurred in the latter half of 2003 as the global economy gradually improved and Asian countries recovered from the outbreak of the severe acute respiratory syndrome.

On a worldwide basis, IT management services and process management services remained the IT services industry's best-performing segments in 2003, with growth rates of 10 per cent and 9.3 per cent, respectively.