Local Language Information Technology Market in India

By Cathy Wissink - Windows Globalization, Microsoft Corporation

Executive Summary

There is a huge untapped potential that needs to be explored by the government and the vendors to ensure successful use of local language computing applications.

The local language computing sector requires a boost to encourage the use of local language computing applications among the masses. Some of the projects initiated by the government have failed primarily due to the lack of commercialization of technology and lax timelines for projects. Moreover, the majority of the players in the sector are mid-sized companies or educational institutions with limited financial muscle; hence they often tend to be restrained in terms of their research and development (R&D) spending on new technologies. The key to success lies in reducing redundancies and enabling positive amalgamation of ideas and sharing of knowledge among government institutions, academia and vendors. A collective and combined approach is required to generate adequate content. Machine translation and creation of lexware, dictionaries, and WORDNET also need a collaborative approach that can lead to a faster development and intelligent computer learning of the language

Both the central and the state governments need to encourage the use of local language applications in their departments. It is of equal importance to ensure that most of the software for workflow process and documentation systems is enabled in local languages. The government needs to ensure that all real-life applications step out of planning stage and get implemented at the respective departments, thereby providing relevant and real-time information in local languages to citizens of India.

Market strategies based on the diffusion model for the local language IT ecosystem has been provided.

Initiatives in Local Language Market

Only 3 percent of the Indian population can speak in English while close to 40 percent of the Indian population speaks Hindi or one of its variants. Still, the medium of communication in higher education, judiciary, bureaucracy, and the corporate sector is English. Since English is the medium of interaction in IT systems too, structurally, such a situation aggravates the divide between segments of population that have access to computing and the ones that don't. To arrest this situation, an important step has come from the Ministry of Communication and Information Technology in the form of The Technology Development for Indian Languages (TDIL). TDIL has been mandated to bridge the digital divide by developing IT tools in local languages in India.

Since 1991, TDIL has sponsored research in developing Indian language computing resources, processing systems, tools and translation support systems and localization of software for Indian languages. The other key initiatives have come in from development of Human-Machine Interface Systems and development of web centric applications. TDIL operates on a distributed innovation model through collaborations with 13 resource centers across India. Some of the notable milestones have come through CDAC, a collaborative partner of TDIL in form of GIST (Graphics and Intelligence-based Script) that has brought diverse users to employ local language IT tools. Applications have ranged from desktop publishing to sub-titles in TV broadcast in various Indian languages. A Local Language word processor, ‘LEAP' has brought desktop publishing to a large segment of population in a language they can communicate in naturally.

Industry Challenges

While the eventual benefits of increasing access to local language IT resources to a large segment of the population is clear, there are multiple challenges that the fledgling Indian market will have to overcome before the avowed vision is taken to reality.

Some of the key challenges confronting the market at this point of time are: Lack of universal standards for scripts and fonts, input devices and transliteration Limited availability of software and fonts Low availability of local language content

Local Language Software Market-Vendor Analysis

The Local Language IT market is in a development stage and the market is expected to grow at a healthy rate of 80 percent (CAGR) from $ 11 Million in 2002 to $ 64 Million in 2005.

The key drivers that will drive exponential growth for this market will be Newer areas of application for Local language IT Broad based e-Governance initiatives that will employ local language as a front end to disseminate Government services to citizens and Bundling of multi-lingual software with PC's and other access devices

The market for Local Language IT is also likely to face a number of restraints that could inhibit the pace of adoption. They are: Lack of formal language-based IT training Limited usage of available local language applications Lack of spending Low connectivity

The Local Language IT market constitutes predominantly of word processing. Word Processing applications revenues in 2002 constituted 48 percent of the total market, with Packages and DTP constituting 20 percent and 18 percent respectively. While word processing software will continue to occupy a lion's share of the total revenues by 2005, package applications and local language multimedia and video applications are likely to grow at a significant pace.

Reflecting the diverse application areas that local language IT will be used across in the future, consulting services revenues are expected to see a big jump. Consulting services revenues were 47 percent in 2002; by 2005 the consulting services revenues are expected to grow to 67 percent of the total market. Investments by Governments on e-Governance will find a way to the Local Language IT market. The share of e-Governance will increase from 38 percent in 2002 to 58 percent in 2005.

The Local Language IT market constitutes of about 12 to 14 vendors. Most of the domestic players are regional and have limited access to the market. They offer both off-the-shelf products and custom made applications in all the major Indian languages. The other set of key player in the Local Language IT market are international players. International vendors are yet to take off in a big way in terms of the application offering across different languages. IBM offers a Hindi version of Lotus Notes in India. However, the participation of international vendors is expected to increase in the next three years. C-DAC, owing to its pioneering initiatives in the Local Language IT market has acquired the leadership place with 48 percent market share in the year 2002. C-DAC is the top leader in both the product and consulting services space. Modular follows up with 23 percent market share.

There is an overall consensus on the benefits of e-Governance in India. While a wide variance exists between states in terms of their e-Governance initiatives, it is expected that over the medium term, a greater number of states will provide services to citizens over the electronic medium. Deploying Local Language IT as a part of State and Central e-Governance implementations will serve the cause of improving the reach and quality of services offered across a wide section of the citizens.

E-Governance Initiatives and Potential for Local Language Market

State Governments have deployed citizen services in local languages and the early benefits are clearly visible. Early Government-to-Citizen Portals such as eSeva have proved the feasibility of the model. Frost & Sullivan expects this trend to extend on both scale and scope: a wider bouquet of services will be available to a larger section of citizens.

Andhra Pradesh is the state with the biggest spend on Local Language IT contributing 23.6 percent to the total market revenues for the Industry. Gujarat is the second highest spender followed closely by West Bengal.