While all kudos to the industry for developing more markets and being smart sellers, the big salute is for the global corporates whose confidence in India continues to go up, and the Indian users who now believe that IT must be adopted for success.

Out of a total of Rs 226,879 that was the overall Indian IT industry in FY 07, exports as usual was the bigger contributorRs 153,744 crorewith 35% growth over the previous fiscal. The domestic market was Rs 73,135 crore, a 27.2% growth.

The journey into the details of how the components and sub-components of the various IT product and service categories performed in a high-growth market like India is fascinating. Being the market that India is, with a very broad range of customers and their requirements, there is hardly any product or service that has not grown. And, therefore, it was good times for everybodybig companies or small. While there was consolidation, there was also diversification. And everybody was looking for growth and gearing up for actionusers as well as vendors. That is the story of Indian IT for the fiscal gone by.

The Desktop Affair
It would not be unfair to start the performance report with the basic unit of ITthe desktops. The Indian desktop market grew 10.7% in volume terms to reach 4.5 mn in unit shipments, according to IDC India. The overall market, based on end-user average selling value (ASV), according to IDC India, grew 17.5% to reach Rs 12,839 crore. According to DQ estimates, the market grew 13% to reach Rs 10,997 crore, from the vendor ASV perspective.

At a broader level, the desktop market in India finally got commoditized. That means margin pressures and slow growth for sure, and consolidations possibly. It also means that India no longer offers any special market characteristics, as was the case in the past. The key verticals that drove the demand for desktops on the commercial side were IT/ITeS, BFSI, manufacturing, government, education and telecom. At the end of FY 07, the total installed base of PCs in the country crossed 22 mn, as per IDC India. That is a PC for every 50 Indians.

Consumer desktops encroaching into the home entertainment system space, was among the key trends last fiscal. Consumers did not just look at processing power; they looked for several other features in their desktops that comprised TV tuner cards, DVD drives, surround-sound and high-end graphic capabilities. FY 07 also saw a fair bit of experimentation in the retail space.

Challenging the King
The year saw the Notebook market firming up on growth, technology, configuration and performance. Also 64-bit notebooks hit mainstream with Intels Core 2 Duo and AMD Turion 64x2.

If FY 06 marked the tipping point for the notebook market, fiscal 07, with 1,110,559 units sold, saw notebooks as a serious challenger to the desktop. In value terms, the market, according to IDC India, reached Rs 5,996 crore. The market size, based on ASV from the vendors perspective, was Rs 4,886 crore.

Awareness regarding notebooks also escalated over the year with wireless Internet access (via WiFi hotspots) becoming more prevalent. The convenience factor associated with notebooks also spurred buying. Industry experts believe that the notebook as a segment of the PC market is firming up. Hence looking at current dynamics, growth will rationalize, and emphasis will be on delivering both high-end businesses as well as cutting edge entertainment features. Over the years the notebook market spanned low-, mid- and high-end segments, but with the Dual Core and Vista now in place, configurations of notebooks have improved in general.

The bigger story was not about technology, it was about the notebook being transformed more into a lifestyle product than a business companion. This made a substantial difference. With many of the leading vendors like HP, Lenovo, and Acer trying out celebrity endorsementsincluding big names like Shah Rukh Khan, Saif Ali Khan, and Hrithik Roshannotebooks are a hot marketing battleground.

Its about Power
The fiscal year that went by saw significant product launches across various server categoriesfrom x86 to Unix. The x86 volume segment kept pace with a moderate y-o-y growth. But the key challenge in the x86 category was to be able to sustain realization, as the average selling values (ASV) came under pressure.

Meanwhile, mission critical applications like core banking continued to drive the Unix-based server market. This segment has always been characterized by high value and low volumes, but over the year SMBs started adopting Unix, which in turn resulted in a volume ramp up. Consequently, the RISC-Itanium-Unix servers showed healthy growth.

Unix has always been a powerful force and its position as the industry standard operating system is time tested. For the year that went by, Unix servers held their sway with demand from large enterprises to even SMBs.

The blade server market used to be a three horse race with IBM, HP and Dell battling for market share. As per IDC India, HP garnered a whopping 71% share in the blade server market in unit terms, in JFM 07. But a look at the market composition over the last fiscal reveals that there has been an active presence of other vendors like Wipro, Fujitsu and Sun Microsystems offering an array of blade products. With multiple vendors offering various blade configurations, the market for blades is certainly expanding.

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