India IT Spending To Reach $71.5 Billion In 2013: Gartner

IT spending in India is estimated to touch $71.5 billion in 2013, a 7.7 percent increase from the $66.4 billion forecast for 2012, according to a report by IT research firm Gartner.

Peter Sondergaard, senior vice president and global head of research at Gartner said Wednesday at Gartner Symposium/ITxpo, which is being held in Goa through Oct. 12, that India, like other emerging markets, continued to exercise strong momentum despite inflationary pressures and appreciation of local currencies, which are expected in rising economies.

According to the Gartner report, IT spending forecast in India’s telecommunication market (the largest IT segment in the country) is expected to reach $47.8 billion in 2013, followed by the IT services market with spending of $10.3 billion. On the other hand, the computing hardware market in India is projected to reach $9.5 billion in 2013, and software spending will total nearly $4.0 billion.

While software will record the strongest revenue growth at 15 percent, IT services will grow 12 percent. The telecom segment, which accounts for 67 percent of the Indian ICT market, is set to grow 7 percent in 2013, said the report.

“Businesses are increasingly looking to IT to help support the challenges of enhancing customer support, supply chain management, optimizing business processes or helping drive innovation in the business,” said Sondergaard.

“These demands are being placed on IT in an environment in which the infrastructure (hardware and software) foundation of IT within many enterprises may not be entirely in place. IT is also in transition from being viewed as a back-office support function to a frontline business-focused function.”

The hardware segment will account for 14.1 percent of all IT spending in India by 2016, driven by the positive contributions from the storage and the client computing segment, says 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.

Concerns Of Economic Slowdown

Although IT is considered to be the primary driver of business growth, the concerns around the economic slowdown are also gathering strength.

According to Gartner’s latest CEO survey, 85 percent of CEOs believe they will be negatively impacted by the global economic slowdown. However, IT will remain well-supported by CEOs compared with other areas of investment.

While two-thirds of CEOs believe IT will make a greater contribution in their industries in the next 10 years than in any prior decade, 40 percent of CEOs intend to raise their investment in IT, despite the troubled global economy.