India app software spending to grow at 20% this year, outpace China: Report

While both countries are poised for continued growth, organisations have different criteria for selecting the vendors they use, Gartner said

India is set to outpace China in enterprise application software spending growth with a 19.8 per cent rise this year, compared with 18.9 per cent in China, says a report.

However, in absolute terms, the total spending in India is projected to reach $2.5 billion, while that of China is expected to be higher at $5.1 billion, Gartner said in its report on Monday.

"China's and India's enterprise application software spending has grown at double-digit rates historically, and they will continue to be hot spots," said Keith Guttridge, research director, Garner.

According to the report, to be competitive in India and China, technology business unit leaders in technology providers must understand software adoption dynamics and spending intentions.

While both countries are poised for continued growth, organisations have different criteria for selecting the vendors they use, Gartner explained.

Corporate branding is an important software selection criterion in China, while organisations in India focus more on pricing and contract flexibility, according to the report.

Gartner also found that India has a higher percentage of companies in all categories who want to increase spending across all enterprise applications.

Enterprise content management (ECM), business intelligence (BI), customer relationship management (CRM) and open source (enterprise edition) were the most popular in India, while open source, ECM and CRM were the most popular in China.

"Although ECM is considered a hot market, it remains small in terms of share. However, as organisations in emerging countries are growing rapidly and business requirements becoming increasingly complex, there is increasing demand for solutions to digitalise content to support business processes as part of digital workplace initiatives," said Guttridge.

The practical reasons for increasing software spending this year, according to the report, are increased competition, alignment of IT to business and rate of technology change.

In India, increased competition and availability of skills are other top reasons for increased spending.

Further, spending is being strongly influenced by overarching digital transformation, followed by mobile and artificial intelligence, the report revealed.