Large projects, driven by the central and state government bring in new prospects around hardware, software and services.
The government sector has always been the big daddy when it comes to IT budgets. The sheer volume of opportunities makes it an extremely appealing market. Indian public sector IT spending is predicted to grow at a rate of 10-11 percent between 2012 and 2017, according to Forrester Research.
Manish Bahl, VP and country manager, Forrester India, believes that the major drivers of IT spending in this sector will be city or state-level projects, rural healthcare initiatives, and computerization of tax-related activities. He says SIs who are heavily focused on hardware should start looking at software and services as well, as organizations in the government sector are looking beyond box deployments.
Multiple e-gov initiatives, state datacenter projects, the National Knowledge network, and the likes of JNNURM are huge and on-going opportunities. Tier-2 partners seem to be more focused towards state-level projects.
Surat-based Innovative Telecom & Softwares has been bagging projects from multiple state government agencies. The SI is also working very closely with one of its principals' smart city initiatives. "Our datacenter business has been growing steadily, with an overall growth in server, storage, networking, and to some extent virtualization as well. Investments at this stage are happening around creating a robust infrastructure," says Moin Shaikh, director, Innovative Telecom & Softwares. Within government, the defense and education sectors look more promising.
Bangalore-based Binary Systems, for example, has benefited by focusing on these areas.
"Defense sector customers are in the process of sprucing up their security infrastructure. They are also investing heavily on R&D and expansion. So there is ample money spent there. We have been witnessing surplus takers for physical security and CCTV solutions," says Edward Jeevan, director, Binary Systems. While Binary's datacenter hardware business for the public sector has been on an upward swing, Jeevan is seeing more prospects around consulting and advisory services as well. He is now looking at partnerships with niche ISVs, to jointly offer solutions that are customized for each department.
Another factor that can make the government sector attractive is the prospect of large scale projects. Praveen Dwarkanath, Director, MN World Enterprise, says, "I am working on a project that'll be rolled out in 14 states. The mandate on 'no new policies to be declared by the government' kicks in six months before the elections. That still leaves us with another four months." MN World's engagement with the government sector is already bearing fruits. Government definitely seems like a safe market to invest in. However, Forrester's Bahl warns that organizations need to be patient and not expect overnight returns from this customer.
Sign up for CIO Asia eNewsletters.