IT Industry

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IT Industry Industry Background Information Technology (IT) industry is one of the most robust industries in the world. More than any other industry or economic facet, this industry has an increased productivity, particularly in the developed world, and therefore is a key driver of global economic growth. Economies of scale and insatiable demand from both consumers and enterprises characterize this rapidly growing sector. Both software development and the hardware involved in the IT industry include everything from computer systems, to the design, implementation, study and development of IT and management systems. Owing to its easy accessibility and the wide range of IT products available, the demand for IT services has increased substantially over the years. The IT sector has emerged as a major global source of both growth and employment. Economies of scale for the information technology industry are high. The marginal cost of each unit of additional software or hardware is insignificant compared to the value addition that results from it. A wide variety of services come under the domain of the information technology industry. Some of these services are as follows: • Systems architecture • Database design and development • Networking • Application development • Testing • Documentation • Maintenance and hosting • Operational support • Security services Infosys Technologies operates in all major functions of the IT industry and is part of the Software Industry subset. Type of Industry The Indian software industry has grown from a mere US $ 150 million in 1991-92 to a staggering US $ 5.7 billion (including over $4 billion worth of software exports) in 1999-2000. No other Indian industry has performed so well against the global competition. According to a NASSCOM-McKinsey report, annual revenue projections for India’s IT industry in 2008 are US $ 87 billion and market openings are emerging across four broad sectors, IT services, software products, IT enabled services, and e-businesses thus creating a number of opportunities for Indian companies. In addition to the export market, all of these segments have a domestic market component as well. Other key observations from the report show that: • Software & Services will contribute over 7.5 % of the overall GDP growth of India • IT Exports will account for 35% of the total exports from India • Potential for 2.2 million jobs in IT by 2008 • IT industry will attract Foreign Direct Investment (FDI) of U.S. $ 4-5 billion • Market capitalization of IT shares will be around U.S. $ 225 billion Exports of $50 billion are projected for the current year, 2008.

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