Check on technology spending to continue

Check on technology spending to continue

Hyderabad: Indian companies will continue to curb spending on technology for at least six more months as firms rely more on existing infrastructure during the slowdown, a survey has shown.

About 16% of the 467 chief information officers (CIOs) polled for the recent survey by technology researcher IDC (India) Ltd expect the economic slowdown to end by the July-September quarter, while 31% of them see the downturn tapering by the three months to December. Another 16% of the CIOs, from mid-sized to large enterprises across 18 sectors, see the slowdown dragging up to March 2010, IDC said in a statement on Monday.

The survey was conducted in February and March.

Based on its internal projections, IDC expects technology spending in India to revive only after the second quarter of 2010 because of macroeconomic factors and the observed lag in technology spending by enterprises.

According to IDC, Indian companies spent around Rs1 trillion on both hardware and information technology services in 2008. But investments in personal computers, servers and peripherals is likely to decrease 20-40% in 2009 over the previous year, IDC said based on the survey. Hardware is the largest segment in the Indian domestic technology market.

“In the IT services segment, project-oriented services like system integration is also expected to come down by 5-10% but maintenance and support services will continue to grow," Praveen Sengar, senior manager, enterprise computing and emerging technologies research, IDC India, said in the statement. “As for government spending, there will be a dip in the first half of the calendar year, but it is expected to pick up in the second half."

Earlier in March, India’s information technology industry body, National Association for Software and Services Companies (Nasscom) had said India’s domestic IT services “was expected to grow by 20% in 2009 financial year, driven by increased acceptance of IT as a growth enabler".

In December, IDC had forecast that spending on technology such as computers, servers and developing software for local firms would grow at annual average of 16.4% through 2013, down from an average of 24.3% annual growth between 2003-2008.

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