Sri Lanka’s domestic software market among fastest growing in the region – Report

The Dublin based Research and Markets.com has forecast Sri Lanka’s domestic software market to deliver a Compound Annual Growth Rate (CAGR) of 17% between 2011 and 2015 making it one of the fastest growing in the region though from a low base.

The assessment has been carried in the Research and markets.com’s ‘Sri Lanka Information Technology Report Q3 2011’.

The addressable IT market in Sri Lanka is forecast at US$ 393 m in 2011, just 2% of the size of India’s market.

“It is expected to grow to US$742m over BMI’s five-year forecast period. The computer market has comfortably been growing at a double-digit Compound Annual Growth Rate (CAGR) for several years, yet the penetration rate remains around 1%. Computerisation has only just started in the service and the government is implementing an eSriLanka strategy,” the report said.

In 2011, Sri Lankan IT spending should continue to benefit from the local and regional economic recovery.

The IT market has considerable latent potential but has been handicapped over the years by the country’s political instability, although things are now looking up. The restoration of peace and improvements in security have helped to release enterprise demand for IT solutions as companies look to boost efficiency.

Over the course of 2011, the consumer PC segment will benefit from a further reduction in prices following the Sri Lankan government’s decision in June 2010 to reduce import duties on electronic goods. A projected 2011-2015 CAGR of 17% makes Sri Lanka one of the fastest growing markets in the region, albeit from a low base.

In May 2011, the State Trading Corporation (STC) announced a partnership with Etisalat to provide computers to Sri Lankan schools at discounted prices. In the first year, the project will cover 340 schools, and this will be expanded to 1,000 in 2012. In the second phase of the project, teachers will be able to purchase notebooks through loan schemes.

In Q111, the Government launched a web portal and services platform, a key step in the implementation of its eSriLanka agenda. The new portal was designed to reduce costs and provide traditionally underserved population groups with access to ICT tools. Government agencies previously ran on different platforms with little integration.