1. VIT BUSINESS SCHOOL
Market Analysis of IT Sector
Product Development and Services
Abirami.R,M.S.Dharma Vibhushan Raja, P.V.Krishna Teja, Suryakumar T
2. Contents
VIT Business School ..................................................................................................................................... 3
Introduction to IT Sector ............................................................................................................................... 4
IT Market Trend ............................................................................................................................................ 5
Market share ................................................................................................................................................. 6
Interpretations ........................................................................................................................................... 6
Employee-Turnover ...................................................................................................................................... 7
Interpretations ........................................................................................................................................... 7
Labor- Capital Ratio ..................................................................................................................................... 8
Interpretations ........................................................................................................................................... 8
Prediction of share prices .............................................................................................................................. 9
Wipro ........................................................................................................................................................ 9
TCS ........................................................................................................................................................... 9
Larsen and Toubro .................................................................................................................................. 10
Interpretations ..................................................................................................................................... 10
Forecasting of share prices .......................................................................................................................... 11
Wipro ...................................................................................................................................................... 11
TCS ......................................................................................................................................................... 12
Larsen & Toubro ..................................................................................................................................... 12
Interpretations ..................................................................................................................................... 13
3. VIT Business School
VIT University was established in 1984 by well-known educationalist and former parliamentarian, Dr. G. Viswanathan, Founder and Chancellor. Dr. V. Raju, Former Professor of State University of New York, USA, currently the Vice Chancellor, Dr. Anand A. Samuel, Pro-Vice Chancellor. Chennai Campus is in Vandalur-Kelambakkam Road.VIT University has more than 17 Bachelor’s and 32 Masters’ programmes, 29000 (including 1000 foreign students from 44 countries) and 4000 faculty members Accreditation: The National Assessment and Accreditation Council (NAAC) of the University Grants Commission (UGC) has accredited the university with a 'A'. The Institution of Engineering and Technology (IET), and the Energy Institute, UK have audited the teaching-learning processes at VIT and accredited the programmes in 2004, with the highest validity of five years Programmes at VIT are accredited by the Institution of Engineers, India (IEI). The Accreditation Board for Engineering and Technology (ABET) of the USA accredited the Civil, Mech, CSE, biomedical, ECE, EEE programmes. VIT Business School, under the aegis VIT University has created a niche for itself as an institution promoting excellence in management education and research with Dr. M J Xavier as its Executive Director.
4. Introduction to IT Sector
Information technology (IT) is the application of computers and telecommunications equipment to store, retrieve, transmit and manipulate data, often in the context of a business or other enterprise.
IT is both a huge industry in itself and the source of dramatic changes in business practices in all other sectors. The term IT covers a number of related disciplines and areas, from semiconductor design and production (also covered in the profile of the electronics sector), through hardware manufacture (mainframes, servers, PCs, and mobile devices), to software, data storage, backup and retrieval, networking, and, of course, the Internet.
The software industry includes businesses for development, maintenance and publication of software that are using different business models, mainly either "license/maintenance based" (on- premises) or "Cloud based". The industry also includes software services, such as training, documentation, and consulting.
5. IT Market Trend
According to a press release by IT market analysts Gartner in January 2014, worldwide IT spending grew by 0.4% to US$3.7 trillion in 2013. Gartner projected growth of 3.1% in 2014 to US$3.8 trillion.
Growth in spending by businesses on software continues to be the strongest trend throughout the forecast period. Gartner sees this sector growing by 6.8% in 2014. It added that customer relationship management and supply chain management (SCM) have already experienced a period of strong growth
For comparison, market research firm International Data Corporation (IDC) predicts that the growth in global IT spending will slow to 4.6% in 2014, down from an earlier forecast for the year of 5%. IDC summarized its forecasts for 2014 in a press release published in February 2014 announcing a new edition of its “Worldwide black book,” which forecasts IT spending in 54 countries around the world, focused on 25 individual market segments across hardware, software, IT services, and telecom services.
The main reasons for the downward revision, according to IDC, are the economic slowdown in emerging markets (with currency devaluation and inflation inhibiting business confidence), plus what it terms an inevitable deceleration in the “massive” growth of smart phones and tablets.
Although overall industry growth has cooled, some areas of IT spending are growing rapidly as businesses in the mature economies (including the United States and Western Europe) begin to invest in overdue infrastructure upgrades and replacements, according to the report. In 2014, spending on servers will increase by 3% (after a decline of 4% in 2013) and spending on storage will grow by 3% (following a 0.5% decline in 2013). The PC market is showing tentative signs of stabilization, with improving commercial shipments in mature markets. The increased pace of investment in hardware will have a positive effect on the revenue of IT service providers, which is forecast to grow by 4% in 2014 (up from 3% in 2013). Business software spending remains strong, with growth expected in the range of 6% to 7% in 2014.
6. Market share
"Market share is the percentage of a market (defined in terms of either units or revenue) accounted for by a specific entity." In a survey of nearly 200 senior marketing managers, 67% responded that they found the "dollar market share" metric very useful, while 61% found "unit market share" very useful.
Interpretations
From the above pie-chart of market share, it is inferred that IBM occupies the largest share of Indian share market with market capital of 193.7 $bn followed by TCS 82.45$bn and Wipro stands in 7th position with market capital of 22.92$bn.
7. Employee-Turnover
Turnover or staff turnover or labour turnover is the rate at which an employer loses and gains employees. Simple ways to describe it are "how long employees tend to stay" or "the rate of traffic through the revolving door". Turnover is measured for individual companies and for their industry as a whole. If an employer is said to have a high turnover relative to its competitors, it means that employees of that company have a shorter average tenure than those of other companies in the same industry.
Interpretations
From the above graph of employee turnover, it is visible that IBM has the most number of employees of 4,31,210 succeeded by TCS with 3,00,460 employees, whereas WIPRO stands in 5th position.
Turnover
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8. Labor- Capital Ratio Capital to Labour ratio measures the ratio of capital employed to labour employed.
Interpretations
From the above graph, CTS has the most number of employees i.e., 150K+ but less market capital whereas TCS has less employees & high market capital.
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9. Prediction of share prices using WEKA software
Weka is a collection of machine learning algorithms for data mining tasks, Weka is used here to forecast the share price of Wipro,TCS and L&T using data of the last traded price. The forecast uses data of previous month. Horizontal axis indicates the last traded share price. The bold red line indicates the last trade price until available data, and the jotted lines indicates the predicted price.
Wipro
TCS
10. Larsen and Toubro
Interpretations
From the above prediction, it is inferred that price drops sporadically and then recovers gradually for WIPRO, for TCS the price drops gradually. L&T price value has ups & downs.
11. Forecasting of share prices using SPSS software
SPSS Software package was used for statistical analysis of data using dependent and independent variables to forecast the share price of Wipro,TCS and L&T. Different variables such as last traded price, Opening price, High price were used to forecast the share price. Data for analysis was taken for a period of 3months prior to analysis. The blue line indicates the actual opening price of the share whereas the red line indicates the forecasted price.
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13. Interpretations
From the above graphs, it is clear that the level of accuracy for the forecast of price was high in all the three cases.
WIPRO-93.1%
TCS-98%
Larsen & Turbo-99.4%
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14. Conclusion
IBM occupies the largest share of Indian share market with market capital of 193.7 $bn followed by TCS 82.45$bn and Wipro stands in 7th position with market capital of 22.92$bn.
IBM has the most number of employees of 4,31,210 succeeded by TCS with 3,00,460 employees, whereas WIPRO stands in 5th position.
The level of accuracy for the forecast of price using SPSS was high in all the three cases.
WIPRO-93.1%
TCS-98%
Larsen & Turbo-99.4%
Bibliography
www.moneycontrol.com
www.wikipedia.com
www.tcs.com
www.wipro.com
www.fundoodata.com
www.qfinance.com/sector-profiles/information-technology
www.equitymaster.com
For Further details Contact: Dr P James Daniel Paul, Professor, VIT- BS, Chennai, jamesdanielpaul.p@vit.ac.in Tel: +91 44 3993 1040 HP: +91 98402 94590
Abirami.R,Student,VITBS,Chennai,
abi.april4@gmail.com.
M.S.Dharma Vibhushan Raja,Student,VITBS,Chennai,
msdvraja@gmail.com,+919989935127
P.V.Krishna Teja,Student,VITBS,Chennai,
tej.1616@gmail.com,+919000919276
Suryakumar.T,Student,VITBS,Chennai,
suryakumar.thangarasu@gmail.com,+919962761632
