Tech adoption and work-from-home culture drives expansion of India's IT sector

As the Covid-19 crisis has taken its toll on many businesses in India, a few of the information technology businesses have observed phenomenal growth, driven by demand for tech solutions as lockdowns force staff members to work from home.

Included in this is Mumbai-based Flock - a virtual office iphone app that allows users to create video phone calls, send messages and talk about files.

“Flock doubled its quantity of paid users in the last three quarters,” says Gaurang Sinha, a director in Flock. “Because so many organisations announced remote operating throughout this past year and with many of them continuing to work from home this year as well, we were able to be useful for businesses around the world.”

Flock says it found a lot more than 2,000 companies monthly subscribe on its platform last year, with India and the US being its biggest market segments.

Demand for such solutions is likely to help India's wider $180 billion IT market to grow due to the pandemic continues to rage generally in most parts of the world, analysts tell you.

A written report by Fitch Ratings jobs that carrying out a flat 12 months, India's IT services sector is set to come back to high-single-digit earnings growth in the economical year from March 2021 “on higher demand for digital transformation”.

The growth, Fitch says, will be driven by companies' “concentrate on transforming their businesses digitally, moving services and work platforms online”, as the pandemic accelerates the technology adoption process.

IT companies that offer cloud-based offerings and automation software are expected to execute particularly good, according to Fitch.

“We believe Indian IT products and services companies will advantage by assisting their consumers in attaining automation, adopting cloud providers, migrating products and processes online and enhancing customer experience on digital channels,” it says.

In another increase for the sector, US cloud-based software giant Salesforce said it built its 1st investment in India, top rated a $15 million financing round for Hyderabad-based cloud start-up, Darwinbox. This is Salesforce's only investment in Asia outside of Japan, it explained on Tuesday.

Darwinbox is a programmer of human resources software, which includes attendance systems and hiring and worker engagement tools. The business, which counts Puma and Nivea among its consumers, had seen progress of 300 per cent since 2019.

“Because the pandemic, we are seeing a shift to the cloud within a few quarters that could have otherwise taken three or four years,” Bloomberg cited Jayant Paleti, co-founder of Darwinbox, as saying.

The Salesforce investment itself isn't huge, but having said that, it shows that "things are starting to happen and there's market maturity”, says Utkarsh Sinha, managing director of Bexley Advisors, a firm centered on the technology sector.

“It's a powerful indication and sends a signal” that could encourage more investment to circulation in to the sector, he says.

“The pandemic has displayed that the physical co-location of humans is not as critical as persons used to believe and that there's a whole lot of stuff that can be carried out online, provided that the infrastructure will there be to aid it.” That is a chance for India to tap, he explains.

India is definitely known because of its back office offerings in the IT sector, providing low-cost answers to the US and Europe specifically.

But now, “the area that's seeing some traction plus some action is folks who are construction something in either the program as a service space or in business cloud solutions”, Mr Sinha says.

India still doesn't have a “breakout” software success from the pandemic such as Zoom however the forecasts are actually encouraging, he adds.

Projections from advisory firm Gartner show that It again spending in India might expand to $81.9bn this season, up 6 % from 2020. This occurs the trunk of an 8.4 per cent gross annual decline to $79.3bn in 2020.

Although there was an overall drop in IT spend in India last year, investment in enterprise software was up 7 % from 2019. This segment is likely to expand by an additional 13.6 per cent this season, according to Gartner data.

“The pandemic provided a chance for Indian chief information officers to check long-pending projects such as for example remote working, which delivered on-promise for many enterprises and helped them stay afloat in the virtually all testing times,” Arup Roy, a vice president at Gartner, says. “The accomplishment of the digital innovations has taken back the focus on investments in IT.”

Software businesses are upbeat as they say cloud solutions have proved indispensable through the Covid-19 crisis.

“During the pandemic, cloud has been a critical enabler intended for remote procedures and anytime-anywhere gain access to,” says Virender Jeet, senior vice president for revenue and marketing in Newgen Application, says. “Our cloud-centered revenues are developing at a healthy rate and we are receiving traction in India from both latest and existing customers.”

He says that this demand is via several sectors, including banking, insurance and government organisations.

The company believes the trend will continue even after Covid-19, as it expects firms to keep on the road of digital transformation.

“The growing traction around cloud will probably continue gaining momentum even following the pandemic, due to its speed, agility and scalability,” says Mr Jeet.

There are obstacles though.

One of the key challenges - as companies approach more of their business processes online - is cyber security.

“There are specific apprehensions about data and cyber security mainly because the paradigm shift towards remote procedures continues,” says Mr Jeet.

Experts say that issue must be addressed to greatly help achieve the entire growth potential of the market.

“The two most important imperatives to operate a vehicle this growth forward will be the way security is handled and how we have the ability to build IT talent in this space,” Srividya Kannan, founder and director of Bangalore-based Avaali Solutions, says.

“There is wide consensus that whenever partnered with leading cloud providers, enterprises are better than if they make an effort to protect data by themselves. There still is this risk of a cloud provider becoming compromised or of human being error and the affiliated risks of info exposure,” she explains.

Despite this, the prospect of India's cloud industry to expand is huge, Ms Kannan says.

“Another wave of demand is approaching from the small and medium-sized business segment ... [which] still [has] an enormous opportunity for expansion,” she says. “Most business owners will depend on cloud for hosting info and this can be ... [the] foundation for the next wave.”

She estimates that over fifty percent of corporations' workloads could migrate to the cloud in the next couple of years.

However, with most employees likely to go back to offices following the pandemic, there happen to be questions about the sustainability of high-growth levels for corporations whose expansion was fundamentally driven simply by the work-from-home scenario.

Mr Sinha at Flock remains to be confident, though.

“A lot of these companies might decide on a hybrid working model, and for that reason, we do not see any reason behind businesses to stop using systems such as for example Flock,” says Mr Sinha.

He says that the company expects “double digit progress in 2021” since it looks to tap more marketplaces across the globe.