India IT spending to reach $79.8 bn in 2012

MUMBAI, INDIA: Economic challenges may not dent investment plans of enterprises in IT because IT spending in India is projected to total $79.8 billion in 2012, a 9.1 per cent increase from $73.1 billion in 2011, according to Gartner, Inc.

The pace of economic growth in India – with a mild (by global standards) dip during the worldwide recession in late 2008 and 2009 – has brought the role of IT into sharp focus.

Gartner's forecast shows that worldwide IT spending will reach nearly $3.7 trillion in 2011. From this amount, emerging economies will account for $1.013 trillion.

Peter Sondergaard, senior vice president at Gartner and global head of Research, provided the latest outlook for the IT industry today to an audience of more than 700 CIOs and IT leaders at Gartner Symposium and ITxpo.

“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,” Sondergaard said. “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 telecommunications market is the largest IT segment in India with IT spending forecast to reach $54.7 billion in 2012, followed by the IT services market with spending of $11.1 billion. The computing hardware market in India is projected to reach $10.7 billion in 2012, and software spending will total $3.2 billion.

“The days when IT was the passive observer of the world are over. Global politics and the global economy are being shaped by IT,” Sondergaard said. “IT is a primary driver of business growth. For example, this year 350 companies will each invest more than $1 billion in IT. They are doing this because IT impacts their business performance.”

Sondergaard said two-thirds of CEOs believe IT will make a greater contribution to their industry in the next 10 years than any prior decades.

“For the IT leader to thrive in this environment, IT leaders must lead from the front and re-imagine IT,” said Partha Iyengar, vice president and distinguished analyst at Gartner and head of research in India.

“IT leaders must embrace the post-modern business, a business driven by customer relationships, fueled by the explosion in information, collaboration, and mobility.”

This new era brings with it urgent and compelling forces. They include: the cloud, social, mobility, and an explosion in information.

“These forces are innovative and disruptive just taken on their own, but brought together, they are revolutionizing business and society,” Sondergaard said. “This nexus defines the next age of computing. To understand this change, you must appreciate each of the forces.”

The Cloud

The cloud combines the industrialization of IT capabilities and the disruptive impact of new IT-led business models. However, the shift away from traditional IT acquisition models to public cloud services is still in the very early stages. For example, Gartner estimates that while $74 billion was spent on public cloud services in 2010, that only represented 3 percent of enterprise spending. But, public cloud services will grow five times faster than overall IT enterprise spending (19 percent annually through 2015).

“What supply chain models did to manufacturing is what cloud computing is doing to in-house data centers. It is allowing people to optimize around where they have differentiated capabilities,” Sondergaard said.

“Information is the oil of the 21st century, and analytics is the combustion engine,”  Sondergaard said.

PHONES AND TABLETS

The shift to mobile is almost overtaking many IT organizations which can’t move fast enough to catch up. Mobile is not a coming trend. It has already happened. In 2010, the installed base of mobile PCs and smartphones exceeded that of desktop PCs.

Less than 20 million media tablets, such as the iPad, were sold in 2010, but by 2016, 900 million media tablets will be purchased — one for every eight people on earth. By 2014, the installed base of devices based on lightweight mobile operating systems, such as Apple’s iOS, Google’s Android, and Microsoft’s Windows 8 will exceed the total installed base of all PC-based systems.

“That’s incredible change, not only for individuals. It requires IT to re-imagine the way it provides applications,” Sondergaard said. “By 2014, private app stores will be deployed by 60 percent of IT organizations. The applications themselves will be redesigned — they will become context-enabled, understanding the user’s intent automatically. Mobile computing is not just the desktop on a handheld device. The future of mobile computing is context-aware computing.”