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Indian digital transformation market showing massive growth potential

In recent times, the growing usage of connected cloud has been one of the key trends in the sector, as it offers easy access to information from anywhere at any point of time. With the help of the cloud technology, organisations can manage a huge number of applications and data. In addition, as these cloud solutions incur no hardware costs, these are widely preferred by small and medium enterprises, which, in turn, is boosting their sale.

Furthermore, in India, the growing adoption of internet of things (IoT) is driving the digital transformation sector. IoT helps create smart products through greater product capabilities, reliability, new functionality, and product utility. Indian companies are acknowledging IoT as a strategic tool for scaling their business and creating innovative user experiences. Due to these benefits of IoT, companies are increasingly inclining toward digital transformation. Further, the use of IoT is expected to grow manifold, considering the Indian government’s intentions of building smart cities.

The India digital transformation market, in 2018, generated a revenue of $24.5 billion, and it is projected to advance at a CAGR of 74.7 per cent during the forecast period (2019–2024), according to Prescient & Strategic (P&S) Intelligence. The factors driving the progress of the market are the growing adoption of internet of things (IoT) and expanding manufacturing industry in the country. Due to the overall growth in the information and communication technology (ICT) sector, the country is expected to up the rate of digital transformation in the coming years, primarily in sectors such as government and healthcare.

Digital transformation refers to the transformation of business processes, operations, and models to adapt to the changes and opportunities offered by digital technologies. On the basis of vertical, the digital transformation market in India is categorised into retail, manufacturing, banking financial services and insurance (BFSI), transportation and logistics, healthcare, energy and utilities, oil and gas, and telecom and information technology (IT). Among these, the telecom and IT category was the largest revenue contributor in the market during the historical period, owing to the rapid automation of various processes, transformation of the customer interface, integration of the IoT technology, and digitisation of the workforce. 

Further, on the basis of enterprise size, the Indian digital transformation market is categorised into small (less than 50 employees), medium (51 to 250 employees), and large (more than 251 employees) enterprises. The large enterprise category held the highest revenue share in the market during the historical period. Large companies play an important role in boosting the digital transformation market, spreading technology-driven ideas, and promoting digital awareness among people. Further, due to the dominant financial position of large enterprises in the market, these are well suited to use digital strategy in their operations and bring about a transformation in different sectors.

Moderate rivalry

When segmented by region, North, South, East, and West are the categories of the digital transformation market in India. Out of these, South India is predicted to be the largest as well as fastest-growing market, registering a CAGR of more than 75.0 per cent in the forecast period. This is attributed to the factor that the southern region is witnessing major IT penetration, with cities such as Bengaluru, Thiruvananthapuram, Mangaluru, Mysuru, Kochi, and Chennai as the major hubs. Furthermore, in the recent years, the region has successfully taken several industrial and technological initiatives due to a significantly growing economy and peaceful industrial relations with conglomerates.

The expanding manufacturing industry in the country is one of the major factors behind the growth of the Indian digital transformation market. As per a report published by the Indian government, between FY12 and FY18, a basic current price, the gross value added, from the manufacturing sector advanced at a CAGR of 4.3 per cent. Furthermore, in 2014, the Indian government launched a project, called ‘Make in India’, to encourage organisations to manufacture their products in the country itself, which, in turn, expanded the national manufacturing sector. Further, the use of digital tools in the manufacturing industry is growing rapidly, thereby improving productivity and product quality.

Hence, it is clear that the rapidly developing manufacturing sector is predicted to escalate the need for digital transformation in the near future.

The intensity of rivalry in India digital transformation market is moderate. The key players in the market such as International business machine (IBM) corporation, Infosys Ltd., and Kellton Tech Solutions Ltd. are focusing on mergers and acquisitions to increase their product portfolios and their market share in the country.

Some of the key players operating in the India digital transformation market includes Wipro Limited, Kellton Tech Solutions Ltd., Sasken Technologies Ltd., Cognizant Technology Solutions Corporation, Clarion Technologies, Inc., Datamatics Global Services Limited, Mindtree Limited, Tech Mahindra Limited, Accenture plc, Dell Technologies Inc., Cisco Systems Inc., International Business Machines (IBM) Corporation, Microsoft Corporation, Tata Consultancy Services Limited, Infosys Limited., and HCL Technologies Limited.

Prijo Samuel, P&S IntelligenceImage source: Shutterstock/xtock

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