The Information Technology industry in India is powering economic growth and boosting export earnings through solutions and services churned out by the knowledge based sector. The IT industry is experiencing steady growth, thanks to increased spends across key markets in the US and Western Europe, and strong growth in emerging markets. Outsourcing continued to be the primary growth engine with global delivery forming an integral part of the strategies adopted by both customers and service providers.

While Indian IT majors have started building notable presence outside the country - through overseas
acquisitions, onshore contract wins and organic growth in other low-cost locations, global players have been ramping up their offshore delivery capabilities, mostly in India.

SOFTWARE

The Software industry is riding the wave of success with aggregate sales increasing by over 40% and net profit margins over 20%. Joining the celebrations is the Hardware sector, posting a healthy growth trend. With massive investments in this domain, the Information Technology sector is continuing its impressive run year after year.

Karnataka’s software industry - the 4th largest Technology Cluster in the World (After Silicon Valley, Boston & London) has shown a steady expansion rate. This sector employs 3,00,000 professionals with exports of over INR 37,600 crores (USD 8.4 billion) during 2005-06 with projections of INR 50,000 crores (USD 10 billion) during the next fiscal.

The Nasscom - McKinsey Report 2005 estimates a 25% year on year growth for this sector in Karnataka, with exports touching INR 75,000 crores (about 18 billion USD) by 2010, employing around 1 million professionals.

HARDWARE
The Hardware sector continues to account for a major share of the domestic IT-ITES spends and is expected to grow at 22% in the current fiscal. Key verticals driving growth include Telecom, BPO, BFSI, Manufacturing and Education.
Computer Hardware and peripherals sector continue to attract huge investments in view of the huge growth potential arising out of lower penetration and increasing IT expenditure. This is reflected by the interest evinced by global majors like Dell, Cisco, APC, Lenovo and Hewlett-Packard to set up operations in India.