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Information Technology (I.

T) Industry

Introduction The Information technology industry in India has gained a brand identity as a knowledge economy due to its IT and ITES sector. The ITITES industry has two major components: Services and business process outsourcing (BPO). The growth in the service sector in India has been led by the ITITES sector, contributing substantially to increase in GDP, employment, and exports. The sector has increased its contribution to India's GDP from 1.2% in FY1998 to 7.5% in FY2012. According to NASSCOM, the ITBPO sector in India aggregated revenues of US$100 billion in FY2012, where export and domestic revenue stood at US$69.1 billion and US$31.7 billion respectively, growing by over 9%. The major cities that account for about nearly 90% of this sectors exports are Bangalore, Chennai, Delhi, Mumbai, Hyderabad, Pune, Kolkata. Export dominate the IT ITES industry, and constitute about 77% of the total industry revenue. Though the ITITES sector is export driven, the domestic market is also significant with a robust revenue growth. The industrys share of total Indian exports (merchandise plus services) increased from less than 4% in FY1998 to about 25% in FY2012. According to Gartner, the "Top Five Indian IT Services Providers" are Tata Consultancy Services, Infosys, Cognizant, Wipro and HCL Technologies. This sector has also led to massive employment generation. The industry continues to be a net employment generator - expected to add 230,000 jobs in FY2012, thus providing direct employment to about 2.8 million, and indirectly employing 8.9 million people. Generally dominant player in the global outsourcing sector. However, the sector continues to face challenges of competitiveness in the globalized world, particularly from countries like China and Philippines.

History of IT Sector
In 1968 Tata Consultancy Servicesestablished inSEEPZ, Mumbai. by the Tata Groupwere the country's largest software producers during the 1960s. The National Informatics Centre was established in March 1975. The inception of The Computer Maintenance Company (CMC) followed in October 1976. During 1977-1980 the country's Information Technology companies Tata Infotech, Patni Computer Systems and Wipro had become visible. The 'microchip revolution' of the 1980s had convinced both Indira Gandhi and her successor Rajiv Gandhi that electronics and telecommunications were vital to India's growth and development. The Indian economy underwent economic reforms in 1991, leading to a new era of globalization and international economic integration. Economic growth of over 6% annually was seen during 1993-2002. The economic reforms were driven in part by significant the internet usage in the country. The new administration under Atal Bihari Vajpayeewhich placed the development of Information Technology among its top five priorities formed the Indian National Task Force on Information Technology and Software Development. The New Telecommunications Policy, 1999 (NTP 1999) helped further liberalize India's telecommunications sector. The Information Technology Act 2000 created legal procedures for electronic transactions and e-commerce.

Current IT sector in India

The economic effect of the technologically inclined services sector in Indiaaccounting for 40% of the country's GDP and 30% of export earnings as of 2006, while employing only 25% of its workforce Today, Bangalore is known as the Silicon Valley of India and contributes 33% of Indian IT Exports. India's second and third largest software companies are head-quartered in Bangalore, as are many of the global SEI-CMM Level 5 Companies. Mumbai too has its share of IT companies that are India's first and largest, like TCS and well established like Reliance], Patni, LnT Infotech, i-Flex, WNS, Shine, Naukri, Jobspert etc. are headquartered in Mumbai. And these IT and dot com companies are ruling the roost of Mumbai's relatively high octane industry of Information Technology. Such is the growth in investment and outsourcing, it was revealed that Cap Gemini will soon have more staff in India than it does in its home market of France with 21,000 personnel+ in India

Big IT Services companies


Firm Revenues Employees Fiscal Year Headquarters

TCS

$10.17 billion

243,545

2012

Mumbai

Wipro

$7.30 billion

135,920

2012

Bangalore

Infosys

$6.99 billion

151,151

2012

Bangalore

HCL Technologies

$4.2 billion

89,319

2012

Noida

FOREIGN PLAYERS IN THE INDUSTRY


1. ACCENTURE 2. ADOBE 3. CSC 4. IBM 5. Microsoft 6. ORACLE 7. SAP labs 8. SIEMENS 9. Google

Analysis of Indian IT Industry


Strengths Available of huge work force at low cost. Youth population in India is highest. Cost of resources are cheap compared to western countries. Support from government like providing incentives for IT companies in form of SEZ. Strong presence of Indian IT companies in US and European countries Low currency value compared to US dollar.

Weakness India lack proper infrastructural facilities. Recession and unstable world economy. Lack of soft skills of Indian students, NASSCOMM reported that only 25% of Indian Engineering are fit for JOB.

Opportunities More European and South American markets are looking for Indian services.
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.Expanding Globally The growing need to outsourcing in western countries. Auto financing.

Threats Countries like China are learning English and providing stiff competition to Indian IT industry. Countries like Philippines are already giving tough competition in BPO sector. Rising prices of resources. Falling Indian economy. Rising agitation in US especially Obama against Indian Outsourcing.

Five Force Analysis of Indian IT Sector Five Force Analysis FORCE 1. Internal Rivalry 2. Entry 3. Substitute 4. Supplier Power 5. Buyer Power High Low Medium Low High Threat

Degree of Rivalry Rivalry in very high among Indian IT companies. The industrial rivalry is high because any p company can produce software at almost similar cost. Threat of Substitute The same software in one language can be replicated in other language, but at the same time the flexibility and cost associated will not be same. Hence the threat of substitute is minimum. Barriers to Entry Barriers to entry are low, as anybody even students can start up the software companies in a small garage. Minimum infrastructure is required compared to Manufacturing companies for setting up a new company.
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Suppliers Power The suppliers power is low in IT industry as there are many licenced vendors for software. As IT companies have billions, so buying a software is not a big issue for for them.Infact some software are even available for free also.

Buyers Power Buyers power is high as there are many options available for them to buy software application at lower cost.

CSR Activities by IT Sector


Maruti Suzuki has adopted a CSR policy, which serves as a guiding tool for the management and the employees in steering Maruti Suzuki towards long term sustained growth in harmony along with the interests of the stakeholder. The role of the CSR department is to professionalize CSR activities in Maruti Suzuki and strengthen the mechanisms involving the activities. Significant efforts have been taken to contribute to society at large, through its corporate activities, especially in the areas of Road Safety and Vocational Training. Maruti Suzuki has set up dedicated teams with requisite expertise to steer the social projects. TATA Motors has many running CSR practices likewise vocational training programs, healthcare initiatives and educational programs under Ratan Tata trust. Hyundai Motors India Limited launched two new CSR programs Project Go Green and Adoption of Model Village. These programs are the latest addition to ongoing programs such as community development, road safety, education and healthcare.

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