CEOs still upbeat about IT spends

MUMBAI, INDIA: While IT is the primary driver of business growth, concerns around the economic slowdown are gathering strength and are a matter of concern. In Gartner's latest CEO survey, 85 per cent of CEOs believe they will be negatively impacted by the global economic slowdown. However, IT will remain well supported by CEOs compared with other areas of investment. Two-thirds of CEOs believe IT will make a greater contribution in their industries in the next 10 years than in any prior decade. Despite the troubled global economy, 40 per cent of CEOs intend to raise their investment in IT. Around 80 per cent of them can name a company that is using IT-related innovation for competitive advantage. This has a cascading impact on the role of a CIO who will now have to think strategically and having a direct contribution in the way business works and the way the global economy develops.

IT spending in India is projected to total $71.5 billion in 2013, a 7.7 per cent increase from the $66.4 billion forecasted for 2012, according to Gartner, Inc.

Peter Sondergaard, senior vice president and global head of research at Gartner, provided the latest outlook for the IT industry. "India like other emerging markets continues exercising strong momentum despite inflationary pressures and appreciation of local currencies, which are expected in rising economies," Sondergaard said.

The telecommunications market is the largest IT segment in India with IT spending forecast to reach $47.8 billion in 2013, followed by the IT services market with spending of $10.3billion. The computing hardware market in India is projected to reach $9.5 billion in 2013, and software spending will total nearly $4.0 billion. Software will record the strongest revenue growth at 15 per cent, IT services will grow at 12 per cent. The telecom segment, which accounts for 67 percent of the Indian ICT market, is set to grow at seven per cent revenue growth in 2013.

"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 hardware segment will account for 14.1 per cent of all IT spending in India by 2016, driven by positive contributions from the storage and the client computing segment, " said Partha Iyengar, head of research - India, at Gartner. "Mobile phones will continue to be the fastest growing space within the Indian IT market. During the same time period, this segment will also account for nearly 42 per cent of all telecommunications revenue in India, and it will also account for nearly 26 percent of the overall IT spending."