HOME > BUSINESS > Government, manufacturing to drive Indian enterprise IT spending: Gartner

Government, manufacturing to drive Indian enterprise IT spending: Gartner

Indian enterprise IT spending across all industry markets is forecast to reach Rs 1,910 billion (Rs 1.91 lakh crore or $37 billion) this year, a 16.4 percent jump from last year rupee terms.

The growth will be less in dollar terms due to the 15-20% fall in rupee value this year, compared to the last.

Gartner, which did not release the dollar market size, said growth will moderate to a the range of eight to nine percent.through 2016.

Enterprise IT spending comprises of software, services, telecom and other spending.

In April, Gartner had forecast India to be the fourth largest enterprise software market in Asia/Pacific this year.

India would account for 11 per cent of the region’s total revenue of $29.33 billion USD for Asia/Pacific this year, or about $$3.22 billion, or about 1.15 per cent of the total worldwide software of market of $280 billion USD billion.

India’s enterprise software market is also forecast to be the third fastest growing in the world through 2016 with growth in excess of 13 percent a year.

In addition, the Indian PC market is expected to see a 17 percent growth in shipments this year primarily due to a huge expected order from the Tamil Nadu government led by Jayalalitha.

The overall Indian enterprise IT market, however, will grow only at 8-9 percent.

India is noted for its global IT services revenue, which is estimated at about $70 billion a year, compared to the overall IT market of just about $37 billion.

However, with more Indian companies achieving global scales, even domestic Indian IT sales will rise.

“There are more Indian companies in general taking a place on the global stage. There are currently 25 Indian companies in the Fortune 500, and there is a corresponding uptake of information and communications (ICT) technologies in the domestic market, as organizations seek globally competitive practices. The ICT market continues to outpace most markets in Asia/Pacific,” Derry Finkeldey, principal research analyst at Gartner said.

Politics and government programs will also aid the growth of IT in India, Gartner said.

“There are multiple, constantly changing factors impacting the industries, as global and local economic and political will is enacted, and regulation on specific industries in particular have enormous influence on cycles of investment and industry growth. Government investment in the revamp of education is driving high growth in the relatively small education ICT market,” Finkeldey said.

The education segment is expected to achieve the strongest growth in percentage terms in 2012, where IT spending is forecast to grow 18 percent in local currency.

The best growth opportunities in terms of actual total dollars will remain the government, financial services and large manufacturing sectors throughout the forecast period, Gartner said.

The highest spenders will be the communications and media segment, banking and financial, manufacturing etc.. (see chart below).

Follow ULTRA.news