For long the Indian domestic IT story has been much like that of the proverbial ghar ki Murgi (Hen) in the oft quoted Hindi proverb, Ghar ki murgi dal barabar (a domestic hen is valued as little as every day lentil). Thus, while everyone was gung ho about the successes of export oriented service companies, like TCS, Wipro, Infosys, etc, there was little to cheer about on ground zero. With a PC penetration among the lowest in the world, the domestic IT story was in tatters and everyone (government, private players, and consumers) blamed others for the same.

That was much the story, till last year, when the global economic train almost came to a halt. A meltdown in the US and its subsequent impact across the world has left the Indian IT export poster-boys reeling. The margins for these companies have come under extreme pressure due to issues like wage inflation, US dollar depreciation, deferred IT decisions by global majors, etc. The handful of companies that were focussing on the domestic market were not only safe from such pressures, they were also able to grow at healthy rates. This change has been an eye-opener of sorts because, for the first time, people seem to have woken up to the potential of the domestic market.

Though the indications were present over the past couple of years, almost overnight, the ghar ki murgi became significantly important.

Growing Hardware Spend
With falling hardware prices and increasing IT spend by companies, especially the SMBs, the hardware market has grown handsomely over the past year. In fact, the overall hardware market including systems, peripherals, and other hardware products has grown by 35% over last year. Much of this growth can be attributed to the spread of computing to smaller towns and cities of India and of course the growing clout of the SMBs. Going by a survey conducted by New York-based Access Markets International (AMI) Partners, SMB outfits in India are going to spend $9.7 bn on IT in 2008. The spend is up by 22% over last year. This is the result of a boom in the overall economy and a rise in the number of Small Businesses (SBs). The shift has also been strengthened with major hardware companies either strengthening their dealer network or introducing products at a price point much lower than the others.

Not only the businesses, even the average Indian Joe (or rather Jai) is buying PC system and peripherals with lan, evident from the way the segment has grown over the year. Notebooks continue to grow at over twice the rate of desktops. While the monitor segment is surging on the basis of TFT and LCD sales. According to IDC, the growth of Indias domestic hardware spend in comparison to other BRIC markets (Brazil, Russia, China) has been very impressive. In fact, this year India is going to overtake Russia in terms of total spend on hardware.

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