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Gartner sees IT spending grow by 10% in APAC

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CIOL Bureau
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BANGALORE: After forecasting a growth of 7 percent in worldwide IT spending in 2003, over 2002, Gartner has projected the Asia Pacific IT spending to show a stronger growth of almost 10 percent during the same period. A media release from Gartner informs that Asia Pacific IT spending will surpass $258 billion in 2002, thereby registering a 5.8 percent increase from 2001.



"While this does not indicate a return to the days of the dotcom bubble, it is an indication that organizations are beginning to look more favorably at investing in strategic solutions," said Gartner Asia Pacific, industry analyst, Daniel McHugh. "This investment is more closely tied to shorter term return on investment, productivity gain and cost reduction, rather than discretionary spending on new business models."



Asia-Pacific IT spending is being led by the telecommunications sector (see Table 1), which is set to represent 70.9 percent of IT Spending in 2002. Hardware is the No. 2 sector with end-user spending forecast at $38.56 Billion for 2002, followed by the rapidly growing IT Services sector at $31.28 Billion.



Table 1: Segment wise IT spending by end user in APAC region (In $ millions)




















































































































Segment



2001



2002



2003



Hardware



37,213



38,567



40,949



Annual Growth (%)



0.6



3.6



6.2



Software



5,118



5,452



5,843



Annual Growth (%)



1.5



6.5



7.2



IT Services



28,388



31,285



35,135



Annual Growth (%)



8.4



10.2



12.3



Telecom



174,071



183,618



202,703



Annual Growth (%)



0.5



5.5



10.4



Total Market



244,790



258,922



284,630



Annual Growth (%)



1.4



5.8



9.9

 



In the coming 12 months, China’s IT initiative priorities will be spread across many areas, which is expected from a maturing market. Of note however, is the push for enhancing security, as well as spending across IT investments focused on increasing efficiencies and computerization of organisations and its partners. These include building internal B2E (Business to Employee) systems, supply chain management, CRM and ERP.



India also places higher priority on spending on enhancing corporate security and network infrastructure. However India places a higher priority on network and telecom outsourcing services, more likely to be a result of the country’s strengths in the areas of applications development and the hosting of such solutions. In addition, spending on customer facing IT initiatives such as CRM, and the analysis of information gathered by these systems figures highly in overall priority.



Gartner India, Senior Analyst, IT Services, Ravindra Datar, said, "On the user side, one expects large scale IT deployment to continue in the banking & financial services sector and also by the government. Other verticals will follow too as competitive pressures force Indian companies to offer more and better products and services while simultaneously improving operating efficiencies.



Large scale activity on the BPO front, as more facilities are set up in the country, will also lead to a huge potential demand for IT products and services that will be required in setting up and running these facilities. This means demand for ERP, CRM and SCM implementation and systems and network implementation services."

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