'IT spending about 19 pc in India'

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As chief research officer and senior vice president of IDC, John Gantz has responsibility for IDC's worldwide demand-side research, global market models, and research quality control and standards. He is also a member of IDC's management committee, chief architect of IDC's Global Internet Commerce Market Model, TM, IT Economic Impact Model, and PC Software Piracy research. He is one of IDC's chief spokespersons on broad technology and market issues at major forums in the United States and around the world. He was in Bangalore recently as the chief guest for IDC's Direction08 event. In an interaction with Pradeep Chakraborty and Srinivas R of Cybermedia Group, Gantz shared his thoughts on global IT spending, Web 2.0 and BPO. Excerpts from an interview:


Cybermedia Group: There have been lot of talks about global IT spending during Directions08. How do you see the global IT spend growing, and how do you see it growing in India and Asia Pacific region?

John Gantz: Globally, the IT spending has been rising. During the last decade, the growth has been between 6-7 percent. We are seeing similar kind of growth in the US, Europe and Japan. Outside of these, however, some of the Asian countries are seeing double-digit growth. For instance, due to the domestic IT spending in India, the IT spending has seen around 19 percent growth. We expect a similar kind of growth in India since there is a huge untapped market available. Currently, India contributes 1 percent of the total IT market globally.

CG: There was also a reference to the BRIC countries. In comparison, how do you foresee IT spending in these areas?


JG: IT spending has been rising in the BRIC countries. India and Russia have similar growth and are tied at 19 percent each, while China has been witnessing 14-15 per cent growth, and it is about 13 percent in Brazil.

CG: SMBs have been a major topic of discussion. How do you see IT spending happening in that space?

JG: SMB is still an untapped green-field area. Due to various factors such as better broadband connectivity, it may rise. However, it is also very difficult to reach them. Nevertheless, they are growing thrice as much as compared to the large enterprises.


CG: Which major segments, according to you, would drive the growth in IT spend?

JG: Healthcare is definitely gaining momentum and BFSI is another segment. Generally, manufacturing and BFSI lead.

CG: There have lot of discussions regarding E-governance in India. How do you see this space?


JG: E-governance is not a simple computerization. There is a huge market available. They need to spend.

CG: A lot of rhetoric has been going on about Web 2.0. What is your take on the technology and how relevant is it for enterprises?

JG: When I speak to some of the CIOs, they sound quite negative so far, and are not too open about this. I think embracing some of the Web 2.0 applications like instant messaging, wikis, etc., will be popular. The IT departments did not even like adopting technologies such as Wi-Fi, VoIP, etc. However, these technologies are all prevailing in the market today.


CG: Just a few days back, Yahoo incorporated its messenger on to the browsers. Do you think others would follow?

JG: I presume it could well become an essential use for the application.

CG: Social networking sites have been in the news and some major companies are also getting into this space. When it comes to social networking sites, do you think that content will be the king or is contact with the customer going to be the new king?


JG: Contact with the customer has always been the king. However, user-generated content will take over from regular content in some parts. Still, there needs to be clarity required. For instance Google buying YouTube. There also needs to be some clarity when it comes to user-generated content and copyrights.

CG: Looking at the recent trends, it seems that , kind of dotcoms are coming back. Will they survive?

JG: One thing about these dotcoms is that there are no venture capital funds. No VC is investing in these kinds of dotcoms. In 2000-01, lot of VCs invested in dotcoms and then, there was a huge crash. However, some of the dotcoms like E-bay or Amazon have survived and are doing business. Even now, some of the dotcoms with strong business model will survive.


CG: How does other verticals affecting IT spending. For instance, will a slowdown in the mortgage industry in the US affect some of the BPO companies in India.

JG: I think there is lot of scope for business process outsourcing. If you ask me, I can say you can outsource 90 percent of your business processes. If we look at it in that sense, BPO still has a lot to offer.

CG: Last evening (May 3), you were discussing about slowdown in every 15 years. Do you expect a bust in 2015?

JG: Yes, it is not a slowdown but it is some kind of a crash. We have seen it all. In 1970, it was the mainframe, in 1985 it was the PCs, in 2000 it was the dotcom. It all depends on the markets. However, I cannot say what kind of crash. It could be in the machine-to-machine or embedded, it could be anything.

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