‘IT Services' spending to be $5.8 bn by 2005’

NEW DELHI: Indian IT services expenditure is projected to reach $1.6 billion

in 2001, a 25.2 per cent increase over 2000 revenue of $1.3 billion, according

to industry analyst firm Gartner Dataquest. The forecast for the industry is

that it would continue to grow strongly through 2005, when IT services revenue

will reach $5.8 billion.

While the global economic slowdown and the uncertainty resulting from

terrorism and war are expected to dampen growth somewhat through 2002 in many

segments and countries, Gartner Dataquest believes overall demand will continue

to experience double-digit growth from 2003 through 2005.

"Following 2002, increased confidence in the economy and business will

present vendors with an opportunity to benefit from renewed demand among end

users of IT services based on exploiting technology innovations," said Rolf

Jester, research director for the Asia/Pacific IT Services market at Gartner.

"Our local research shows that IT Management services continue to do well

despite sluggish economies. From late 2002, we expect networking, security and

telecommunications technology related services as well as e-Business initiatives

to be strong drivers of demand."

Jacqueline Heng, senior analyst for Gartner Dataquest's IT Services group in

Asia/Pacific, added, "The Asia/Pacific services market continues to outpace

other regions significantly, with a growth rate double the world average, and

nearly three times that of North America. And that will continue for the

foreseeable future".

"India has mostly been viewed as a provider of IT services to the rest

of the world. But the domestic market is showing very high growth rates as

Indian enterprises take increased advantage of the business benefits of using

external services providers", Heng concluded. Development and integration

has been the largest segment within the IT services industry, and this will

continue through 2005. In 2000, the development and integration segment reached

$599 million, and in 2005 the market is expected to be $4.1 billion.

Economic and political uncertainty is expected to hit consulting the hardest

of all sectors, the growth rate coming down to only 7.7 per cent in 2001,

extremely low for the Indian market. However, individual consulting areas such

as security, business continuity planning, networking generally, and e-Business

related work will remain the bright spots in the picture.