The honeymoon with high growth percentages seems to be over. The Year 2001-02 started on a gloomy note with a GDP growth recorded at four percent (2000-01), which was far below expectations. Many segments were instantaneous in catching the slowdown fever. The situation worsened from first to second quarter and in the third quarter it looked as if IT companies globally were having a blood bath. But the question that goes into the probing mind is what made Indian corporates crawl? There are several reasons that can account for this—the global economic slowdown, drastic changes in consumer spending pattern, etc.

It was only the fourth quarter that brought relief to many companies. Also the outsourcing markets started growing and the pie became bigger in favour of India. Business graphs again started moving towards the Northeast direction, though slower in pace. In due course, organisations consciously and judiciously explored the possibilities of new business models. It should not be a surprise to anyone who has been following the IT sector closely for some time, that models were IT-centric and heavily depended on core vertical technologies.

A recent study by IDC found that the manufacturing sector is the highest IT spender, accounting for more than 30 percent of IT spending in vertical markets. It is followed by the services sector and the financial services sector.

In terms of IT spending growth, insurance, finance and telecom are the fastest growing segments. While the software exporters, pharma and biotech, government and manufacturing sector have moderate IT spending growth, automobile and services are growing very slowly.

“There is no fundamental reason for the IT spending trend to slow down. The continuing political and economic crisis may have made companies more cautious, but IT has become so important that investment in enabling technologies is expected to continue. Web-enabled solutions and e-commerce are high on the list of IT initiatives. Consequently, despite a slowing economic outlook, IT spending trends appear healthy in 2002-03”, says Utpal Ghosh, head—Demand Side Research, IDC India.

The report also identifies various drivers that will ensure continuous prospects in technology investment across various vertical markets in 2002-03:

• An accelerated rate of productivity growth will bot be possible unless companies use information technology to cut costs, increase output, and generally rebuild the way they are doing business.
• The need to boost competition, provide better value to customers, and slice costs from the supply chain remains a perpetual driving force for technology spending.
• Depending on where the technology is positioned in the company, corporate investment in information systems will lead to increased sales of services and software.

Thus, there is a clear indication of an abundance of opportunity for IT vendors across various vertical markets. However, given the fact that the business process of every vertical industry segment is different from others, it becomes important to understand the IT requirement of the industry segment for marketers to customise their requirements.