ICT spending to grow 10.3% in 2011

ICT spending to grow 10.3% in 2011

Bangalore: India information and communication technology (ICT) spend is forecast to reach $71.9 billion in 2011, a 10.3% increase from the previous year’s figure of $65.23 billion, according to IT research and advisory firm Gartner Inc.

Hardware is projected to be the fastest growing segment with a compound annual growth rate (CAGR) growth of 20.4% through 2014.

IT services is showing the strongest annual revenue growth at 22% in 2010 while telecom segment, that is forecast to account for 73% of the Indian ICT market in 2010, is witnessing a slow down and is set to grow at 13.2% growth.

Gartner said IT spending in India saw somewhat of a slowdown as a result of the global economic recession through much of 2009. The overriding major theme across companies in India last year was better utilisation of existing resources and driving efficiencies of infrastructure.

While many companies adopted a cautionary approach in 2009, a strong return to growth has been seen in 2010, due in part to pent-up demand following budget slowdown in 2009, the need to replace/add hardware and the massive consumer segment driven growth across many industries, it was stated.

A large young working population, a rapidly rising middle class and emerging opportunities in the services sector are going to be the key factors in the growth of the consumer market in India. Growth within smaller towns and cities would provide the next level of opportunity for IT vendors across categories.

In hardware, much of the growth would be driven by spending within the client computing space.Increasing rural prosperity, aided by growth in the small office and the small business segment, are the key growth drivers in the PC segment.

“The IT services space in India will be driven by new projects in areas of business applications (CRM, ERP, BI), virtualisation and data centre consolidation and green IT exploration," said Partha Iyengar, vice-president and head of research in India.

“Government and defence segments will create sizeable opportunities in large systems integration projects for application services. Managed services around IT infrastructure will open up doors to application services, he said.

The software segment in India is expected to grow with strong traction being recorded in business intelligence, middleware, database management systems (DBMS) and application development (AD) tools.

The India market is in a growth stage and is the fourth largest software market in Asia-Pacific after China, Australia and South Korea. There are sizeable opportunities within manufacturing, retail, transport and hospitality, as well as the already established opportunities in government, telco, financial sectors and IT services.

“India continues to be a vastly under penetrated IT market relative to its potential. Infrastructure projects undertaken by India’s government will strongly drive IT, in conjunction with the growth of the hypercompetitive financial services in India, which requires highly sophisticated IT systems," said Iyengar.

“At the same time, manufacturing in India is beginning to take off, and is expected to show strong growth through 2014."