According to a joint study by NASSCOM and IDC India titled “Study on the Domestic Services (IT-ITES) Market Opportunity,” revenue growth in the services sector has been faster than that for the overall domestic IT market (including hardware, software and services) over the past few years.

Over the last decade, even as India’s IT-services sector has grown to be a role model globally for its outsourcing services, the sector has thrived primarily on exports. And unlike China, which has a burgeoning domestic IT market but little exports of IT services, the domestic IT-services market was hardly a story worth talking home.

But that seems to be changing. This is best reflected in the fact that most indigenous players in telecom and banking, two key sectors with significant MNC participation, have significantly upgraded their levels of IT adoption to offer best-in-class services comparable to those offered by the global competition.

These two sectors together account for approximately 35%–40% of the domestic spend on IT services.

The study has estimated that in-house spending on IT services (including training costs, salaries of in-house IT staff and associated overheads) still accounts for more than half of the corporate IT spend in India, while the outsourced/vendor addressed spends account for just 45% of the total.