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India's IT spend to reach $71.5 bn: Gartner

Last updated on: October 10, 2012 17:35 IST

India's IT spend to reach $71.5 bn: Gartner

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The IT spending in India is projected to total $71.5 billion in 2013, a 7.7 percent increase from the $66.4 billion forecasted for 2012, according to Gartner, Inc.

 "India like other emerging markets continues exercising strong momentum despite inflationary pressures and appreciation of local currencies, which are expected in rising economies," Peter Sondergaard, senior vice president and global head of research at Gartner said.

The telecommunications market is the largest IT segment in India with IT spending forecast to reach $47.8 billion in 2013 (see Table), followed by the IT services market with spending of $10.3billion.

The computing hardware market in India is projected to reach $9.5 billion in 2013, and software spending will total nearly $4.0 billion.

Software will record the strongest revenue growth at 15 per cent, IT services will grow at 12 percent.

 

2012

2013

2014

2015

2016

CAGR (2012-2016) %

Hardware

9.1

9.5

10.9

12.5

14.3

7.5

Software

3.5

4.0

4.5

5.2

6.0

11.4

Services

9.2

10.3

11.9

13.8

16.1

8.9

Telecom

44.7

47.8

51.5

54.6

59.5

3.6

Total

66.4

71.5

78.9

86.2

95.9

5.3

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Photographs: Reuters.

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The telecom segment, which accounts for 67 percent of the Indian ICT market, is set to grow at 7 percent revenue growth in 2013.

"The hardware segment will account for 14.1 percent of all IT spending in India by 2016, driven by positive contributions from the storage and the client computing segment, " said Partha Iyengar, head of research – India, at Gartner.

"Mobile phones will continue to be the fastest growing space within the Indian IT market. During the same time period, this segment will also account for nearly 42 percent of all telecommunications revenue in India, and it will also account for nearly 26 percent of the overall IT spending."

While IT is the primary driver of business growth,  concerns around the economic slowdown are gathering strength and are a matter of concern. In Gartner's latest CEO survey, 85 percent of CEOs believe they will be negatively impacted by the global economic slowdown.

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Photographs: Reuters.

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However, IT will remain well supported by CEOs compared with other areas of investment. Two-thirds of CEOs believe IT will make a greater contribution in their industries in the next 10 years than in any prior decade.

Despite the troubled global economy, 40 percent of CEOs intend to raise their investment in IT.

Eighty percent of them can name a company that is using IT-related innovation for competitive advantage. This has a cascading impact on the role of a CIO who will now have to think strategically and having a direct contribution in the way business works and the way the global economy develops.

"We live and work in an age of incredible promise. An age unleashed by a nexus of forces; social, mobile, information and cloud. While there is economic uncertainty there is also enormous opportunity. IT is at the center of every business, every government agency from the backend and the edge, directly to the customer. These forces are innovative and disruptive just taken on their own, but brought together, they are revolutionizing business and society," Sondergaard said.

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Photographs: Reuters.
Tags: CIO , Sondergaard , IT , India

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Social: With 1.5 billion people or 20 percent of the world's population on social networks, $34 billion from ads, gaming and subscription markets, social computing is in its next phase. By 2015, 10 organizations will each spend over $1 billion on social media.

Mobile: In 2016, more than 2.7 billion mobile devices will be purchased globally, two-thirds of the workforce will own a smartphone, and 40 percent of the workforce will be mobile.

Information: The concept of one enterprise data warehouse containing all information needed for decisions is dead. Multiple systems, including content management, data warehouses, data marts and specialised file systems tied together with data services and metadata, will become the "logical" enterprise data warehouse.

The Cloud: The cloud combines the industrialization of IT capabilities and the disruptive impact of new IT-led business models.

Between 2011 and 2016 the market for Business Process Services in the cloud will double in size to nearly $145 billion. 


Photographs: Reuters.

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