The domestic IT services market in the country is estimated to more than double to $12.8 billion in 2013, a study said.
According to a report by IT research firm Springboard Research, the domestic IT services market is estimated to grow from $5.7 billion in 2008 to $12.8 billion in 2013, growing at a Compounded Annual Growth Rate (CAGR) of 18.6 per cent.
The report added that the vertical would be heavily dominated by infrastructure services, which are expected to reach $7.2 billion in 2013, while applications services, with a CAGR of 19.6 per cent would be the fastest growing segment.
"The Indian domestic IT Services market is at par with international levels in terms of average gross margin and provides immense opportunity to the vendors," Springboard Research Senior Research Analyst (Services) Sudip Saha said.
However, to meet high consumer expectations, vendors need to strategies around services delivery by implementing efficient processes, reusable tools and templates and replaceable models, he added.
Services and Insurance (BFSI) leads the Indian IT services market with 21.5 per cent market share, followed by the public sector (including education) and telecom industry. However, energy and utilities, followed by healthcare remain the fastest growing vertical.
"With industries such as public sector, healthcare, energy and utilities, and transportation and logistics stepping up their IT spending, the appeal for the Indian domestic market has increased tremendously and is drawing the attention of domestic and MNC IT Service Providers," Springboard Research Vice-President (Services Research) Phil Hassey said.
The key challenge remains the disability to convert the potential demand into successful client engagement," Hassey added.