Slump to accelerate enterprise transformation

MUMBAI, INDIA: The economic slowdown is accelerating enterprise transformation, which is manifested in cost savings, productivity enhancement, customer retention, and new IT engagement/delivery models, says, IDC India's, an IT research and consulting services company, latest study, 'Identifying Opportunities in the Current Economic Scenario'.

The study, conducted across 467 CIOs from mid-sized and large enterprises across 18 industry verticals in February-March 2009, reveals that about 66 percent of the CIOs feel that the slowdown will end by the fourth quarter (October-December) of 2009. Today their focus has shifting to better management of existing IT infrastructure by consolidating, optimizing and leveraging resources, from building new capacities.

Kapil Dev Singh, country manager, IDC India, said: “The IDC CIO survey provides pointers to IT vendors for strategizing their business agenda in the mid-term to effectively ride out the economic slowdown and stay focused on their priorities.”

However, in view of the larger macro-economic picture and the lag in terms of IT buying by enterprises, IDC India expects the slowdown to extend and IT spending to revive after the second quarter (April-June) of CY 2010.

The study finds that enterprises are cutting back on new projects and focusing on the maintenance of existing IT setups. Of the total planned IT expenditure for 2009, enterprises plan to spend 20 percent on new purchases and reserve the balance for managing the existing setup.

The surveyed CIOs said that green technologies like virtualization, unified communications (UC), and others such as business intelligence (BI) and data warehousing (DW), software-as-a-service (SaaS), and open source are the emerging investment priorities in 2009.

The study covered product lines ranging from access devices, networking infrastructure, software, storage, servers to technology solutions that domestic market procures.

The IDC India study concludes that investments in PCs, servers and computer peripherals are expected to decrease by 20 to 40 percent as compared to CY 2008. This is likely to directly impact hardware vendors and off-the-shelf software vendors.

IT services vendors are likely to be the least impacted, if they focus on services such as infrastructure management, business transformation and business continuity.