IT market in Indian media sector to grow at 27 percent

The IT market opportunity in the media and entertainment (M&E) sector in India is estimated to grow at a compounded annual growth rate (CAGR) of 27 percent during 2008-2012.

This is according to a report entitled 'IT in the Indian Media & Entertainment Industry: Emerging Trends and Opportunities' by research firm Springboard Research. The findings are based on a survey of 122 CIOs from large and mid-size media and entertainment companies across India.

The study also forecasts that the sector's annual growth will slow down to 23 percent in 2009 compared to 30 percent in 2008, but will pick up again in 2010.

Going digital

The digitisation of content is the single most important strategic IT area for Indian media & entertainment companies, says the report. At the same time, Enterprise Resource Planning (ERP) solutions are the largest implemented business application.

The findings also say that up to 46 percent of the total IT budget of the companies surveyed was spent on software in 2008, majority of it being enterprise software. On the hardware side, storage solutions dominate spending with 37 percent of survey respondents planning to augment their existing storage capacity in the next 12 months.

Inhouse solutions preferred

According to the report, leading IT vendors like IBM, HP, SAP, and Microsoft contribute just 8 percent of the total IT market share in the Indian M&E industry. On the other hand, 69 percent of survey respondents said that they deployed and built their IT solutions in house. The respondents also paid a heavy premium on vendors' capability to offer strong service and support, with 50 percent rating it as the primary factor when selecting an external vendor for their IT solution.

The report indicates that although majority of M&E companies develop their systems in-house, local IT vendors have a sizeable foothold in the industry as they provide low-cost, industry-specific solutions, and their applications are customised to M&E industry segments. Leading the market are IBM and HP in software and hardware categories respectively. The respondents nominate Wipro as the leader in IT Services category, while Cisco is the leader in networking equipment suppliers list. Other leading vendors in the M&E sector profiled in the study include Akamai, Autodesk, Microsoft, SAP and Siemens Information Systems (SISL), the report notes.