Indian enterprises to spend $22.88b on ICT in '05

BANGALORE: Enterprise spending on information communications and technology (ICT) in India is expected to grow at 16.6 percent to $22.88 billion as compared to Asia Pacific growth at 7.6 percent in 2005.

Informing this, Gartner India VP and research director Sujay Chohan added, “For vendors the stakes couldn't be higher, especially local vendors, who have long ignored the local market, cannot afford to miss this transition. The future is very exciting and in just five years, the IT industry will have little resemblance to that of today, yielding extraordinary benefits with network security, convergence, IP telephony, software as services and instant messaging all maturing within 36 months".

"Utility computing and wireless LANs will also become more established while we will begin to experience the value of RFID tags, grid computing, web conferencing and real-time infrastructure during the next three years," he further added.

According to Gartner, in India, of the $22.88 billion spend in 2005 on enterprise ICT, $3.34 billion is the projected spend on hardware, an increase of 21.1 percent over 2004; $0.52 billion (16.4 percent increase) on software; $16.7 billion (15.5 percent increase) on telecom and $2.32 billion (18.3 percent increase) on IT services.

Gartner also predicted that India will remain the highest growth market for telecommunications with around 35 million new subscribers in 2005, an 18 percent increase from 2004, with the growth occurring in selected technologies mainly mobile. This accounts for almost one fourth of the new subscribers forecasted in Asia Pacific.

Consumer segment is rapidly gaining importance, driven by adoption of mobile services. This is reflected in their increased contribution towards spending for telecommunication services, from 35 percent in 2002 to 43 percent in 2005. By 2008 the consumer segment will account for more than half of telecommunications spending.

According to Gartner, the hype of offshore IT services is real and reflects a dramatic uptake in global sourcing of these services. When compared with the total IT services market, less than three percent of spending ($606 billion) is attributable to sourced services in 2004. By 2007, the globally sourced component of IT services spending will be about $50 billion, or seven percent of the $728 billion total.

The growth in offshore BPO services outpaces the growth in global sourcing of IT services. Offshore component of global BPO services spend is expected to grow from $ three billion (2.4 percent of total market spend of $124 billion in 2004) to $24 billion (15 percent of the total market spend of $161 billion in 2007).