BANGALORE, INDIA:  IT end user spending in India is expected to grow at a compound annual growth rate (CAGR) of 14.8 per cent from 2007 through 2012 to generate US $110 billion in 2012, according to Gartner, Inc. In 2008, IT end user spending is on pace to reach US $64.7 billion, a 17.2 per cent increase from 2007.

This prediction, supplemented by a robust gross domestic product (GDP) averaging 8.08 per cent growth from 2007 through 2012, means the Indian market continues to represent a significant growth opportunity for IT vendors.

According to a press release from Gartner, India is poised for double-digit growth across many vertical markets, with financial services and communications organizations spending the most on IT, closely followed by services, manufacturing and government.

"Indian businesses continue to invest in IT in order to drive operational excellence and innovation," said Naveen Mishra, senior research analyst at Gartner. "Small and midsize businesses (SMBs) will drive the growth of various IT-related industries, with the critical involvement of value added resellers, distributors and retailers."

The Gartner report says the Indian market will ship nearly 24 million PCs, of which more than 50 per cent will be mobile PCs. By 2012, the Indian market will ship more mobile than desk-based PCs.

According to the projection, the Indian server revenue market is poised for 6.3 per cent CAGR from 2007 through 2012. This growth will be primarily fuelled by the growth in the x86 and the Itanium platform.

Another highlight is the total software market in India will reach $3.4 billion by 2012. India being one of the fastest-growing software markets it is expected to register the third highest CAGR of 16.3 per cent for the forecast period of 2007 through 2012.

Software spending and plans for critical IT initiatives to attain business agility will remain unaltered, it said, adding increases in mergers, acquisitions and alliances in the local market by Indian enterprises will increase spending on software segments for applications and process integration.
 
As per the study, India's domestic IT services market is the fastest-growing market in Asia/Pacific with a CAGR of 20.2 per cent from 2007 through 2012, reaching $11.8 billion in 2012.

At the same time, the Indian IT services market is fragmented, and competition will intensify with new players entering into the market, it says. This would force providers to find their market niche and differentiation to win deals.

By 2012, the telecommunications services market in India is expected to reach $52 billion growing at a CAGR of 26.8 per cent from 2007 through 2012, the report says. Broadband penetration will reach above 7 per cent by 2012, and Broadband Wireless Access based solutions will be the growth drivers.