India to become the second largest IT market in APAC by 2019

BANGALORE, INDIA: India IT spending is forecast to reach $72.3 billion in 2016, a 7.2 percent increase from 2015, according to Gartner. The driving force behind this IT spending growth is the emergence of digital business.

“India will continue to be the fastest growing IT market for the second year in succession and will continue growing to total $87.67 billion by the end of 2019,” said Aman Munglani, research director at Gartner. “India is currently the third largest IT market in Asia/Pacific, and by 2019 India will become the second-largest IT market within the Asia/Pacific region, following China.”

Devices

Devices, which include mobile phones, PCs and tablets, will account for almost 33 percent of the overall IT spend in India, and the devices  segment will grow 9.4 percent in 2016.  Mobile phones will continue to be the single largest technology sub segment in India and the third fastest-growing through 2019.

Data center

“Data center systems will grow 3.9 percent in 2016, with most of this growth coming from enterprise network equipment and servers that will grow at 5.9 percent and 5.3 percent, respectively. IT services, which accounts for 18.1 percent of overall IT spend in India, will be the fastest growing segment in India in 2016 with 13.8 percent growth year on year. Within these segments, business IT services will grow 15.2 percent over 2015 figures,” said Munglani.

Software

Software, which accounts for nearly 7 percent of IT revenue in India, will grow 12.7 percent as a segment, but within this segment, enterprise application software will be the fastest growing sub segment in 2016, with revenue forecast to grow 16.2 percent over 2015. Communication services will continue to account for the largest share of IT spend in India and will account for 39.2 percent of revenue in 2016, however, this will also the slowest growing segment with a 2.1 percent increase in revenue in 2016.

IoT

Gartner predicts spending on Internet of Things (IoT) hardware will exceed $2.5 million every minute in 2016.

“In five years, 1 million new devices will come online every hour. These interconnections are creating billions of new relationships. These relationships are not driven solely by data, but algorithms,” said Partha Iyengar, analyst and head of research at Gartner India.

“Data is inherently dumb. It doesn’t actually do anything unless you know how to use it; how to act with it. Algorithms are where the real value lies. Algorithms define action. Dynamic algorithms are the core of new customer interactions.”

The algorithmic economy will power the next great leap in machine-to-machine evolution in the IoT. Products and services will be defined by the sophistication of their algorithms and services. Organizations will be valued, not just on their big data, but the algorithms that turn that data into actions, and ultimately impact customers.

Security and Risk

65 percent of CEOs say their risk management approach is falling behind. Gartner predicts that by 2017 the typical IT organization will spend up to 30 percent of its budget on risk, security and compliance, and will allocate 10 percent of their people to these security functions. That’s triple the levels of 2014.

“You can’t control the hackers. You can control your own infrastructure by using more automation, more outsourcing, and more network-based algorithms. Simplify your systems. We must move away from trying to achieve the impossible perfect protection, and instead invest in detection and response. The average malware lies dormant, unnoticed, for more than seven months before it is activated or detected. IT leaders must get better at sensing these dormant threats,“ said Mike Harris, group vice president at Gartner.

CIOs need to rethink their security and risk investments. Gartner recommends that enterprises move their investments from 90 percent prevention/10 percent detection and response, to a 60/40 split.