Sri Lanka’s IT market spending to grow over 15% next five years
Monday, 16 March 2015 02:06
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London: A leader in market analysis expects the Sri Lanka’s Information Technology market to grow over 15% in the next five years.
London-based Business Monitor International (BMI) forecasts a Compound Annual Growth Rate (CAGR) of 15. 4 % for Sri Lanka IT market spending 2015-2019 with the market expected to increase to a value of Rs. 188.8 billion in 2019.
Sri Lanka Information Technology Report Q2 2015 released recently says the expected growth is underpinned by the strong economic growth and a Government that is supportive of digitalisation.
The authors of the report believe Sri Lanka will outperform the majority of IT markets in the APAC region due to a convergence of factors.
Strong income growth and low penetration of PCs, enterprise software and services will combine to boost IT spending growth in Sri Lanka over the medium term, the report says.
The local IT industry is also developing, with vibrant local software and BPO industries and the development of local facilities for PC manufacture and assembly to service the local market and wider region.
The report predicts Computer Hardware Sales to increase from Rs. 59.7 billion in 2014 to Rs. 114.9 billion in 2019, CAGR of 14.0% in local currency terms. There is strong growth potential for hardware sales in Sri Lanka due to low PC penetration rates, declining device prices, rising incomes and the development of a local manufacturing base.
Software sales are expected to grow from Rs. 14.8 billion in 2014 to Rs. 32.8 billion in 2019, CAGR of 17.3% in local currency terms. Software piracy remains a drag on the market, but growth will be driven by investments in enterprise software, with SaaS adoption rates expected to increase significantly over the medium term.
According to the 87-page report, IT services sales will increase from Rs. 17.9 billion in 2014 to Rs. 41.1 billion by 2019, CAGR of 18.1% in local currency terms. IT services forecast to be the outperforming vertical with cloud computing service adoption seeing the fastest growth alongside the continued expansion of the outsourcing industry.
BMI is a leading, independent provider of proprietary data, analysis, ratings, rankings and forecasts covering 195 countries and 24 industry sectors.
