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India Application Development market to grow 23% to $227 mln this year

The India application development (AD) software market is expected to grow 22.6% this year to reach more than $227 million, according to IT market research firm Gartner, Inc.

Application development is one of the biggest revenue drivers for Indian IT outsourcing companies. Many companies hand over the task of developing software applications to Indian companies, who have developed a global reputation for high quality work at low prices.

The applications are sometimes developed directly for clients such as banks and big enterprises and sometimes for overseas software companies, who sometimes outsource the development of some of their older software products to focus on newer versions or more lucrative markets.

Besides application development, Indian IT outsourcing companies also get a large portion of their revenue from deployment and customization of existing branded software and managing hardware for big corporations.

Gartner said growth in application development will be driven by evolving software delivery models, new development methods, mobile and open source.

“Application modernization and increasing agility will continue to be a solid driver for AD spending, apart from other emerging dynamics of cloud, mobility and social computing,” said Asheesh Raina, principal research analyst at Gartner.

“These emerging trends are directing AD demand towards newer architectures, programming languages, business model and user skills.”

Cost is a major driver for the development of cloud software (internet-based services), but also agility, flexibility and speed to deploy new applications, Gartner said. 90 percent of large, mainstream enterprises and government agencies will use some aspect of cloud computing by 2015.

“The trend is compelling enough to force traditional AD vendors to ‘cloud-enable’ their existing offerings and position them as a service to be delivered through the cloud,” said Mr. Raina. “AD for cloud demands rapid deployment, a high focus on user experience and access to highly elastic resources for software testing, while requiring comparatively less underlying infrastructure for developing applications.”

Gartner predicts that mobile AD projects targeting smartphones and tablets will outnumber native PC projects by a ratio of 4:1 by 2015. Emerging mobile applications, systems and devices are transforming the AD space rapidly, and are one of the top three CIO priorities at the enterprise level.

Gartner research found that CIOs (chief information officers) expect more than 20 percent of their employees to use tablets instead of laptops by 2013, hastening the process of change as AD tools and applications evolve to address the requirements of these new devices.

Also driving the AD shift, Gartner expects open source software to continue to broaden its presence and create pressure on market leaders during the next three to five years, especially as open source becomes a key element of the software quality landscape beyond the developer level. It predicts that at least 70 percent of new enterprise Java applications will be deployed on an open source Java application server by the end of 2017.

“Open source software tools will continue to erode revenue for some AD categories in design, testing and Web development,” said Mr. Raina. “This is being driven primarily by the success of Eclipse and NetBeans, as well as by overall revitalization of the market by new small software providers looking for technical and market disruptive approaches for offering products. Limited budgets and economic conditions compelling enough to focus on cost reduction, also fuel the use of open-source software in various development projects.”

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