Domestic IT spend to cross $54.8 bn by 2008: Gartner

Indian information and communications technology (ICT) spending is poised to surpass $54.8 billion by 2008, recording a 19 per cent annual growth, from $29.5 billion posted in 2004.

ICT exports from the country "" including IT outsourcing and business process outsourcing (BPO) "" will be worth $16.5 billion by the end of 2005, according to a study by Gartner, the global research and analyst giant.

"The growth of Indian ICT market will be driven by a combination of factors like the economic upswing of the country, the government policies and an expected increase in foreign direct investment (FDI)," Partha Iyengar, vice-president (research), Gartner India Research & Advisory Services, said.

Presenting the study at the curtain raiser press conference to the Gartner Summit India, 'Conquering IT Complexity', he said the emergence of Indian companies as global entities in the Fortune 500 list would also be a main driver.

Telecom would be the most dominating sector, followed by hardware, IT services and computer software.

On the export of ICT from the country, Gartner estimates application outsourcing to be one of the main drivers in helping the country post $16.5 billion by 2005-end. This will be followed by IT services and high-end BPO, and these sectors are poised to grow at 35 per cent and 45 per cent, respectively by the end of 2006.

At present, domestic vendors account for 42 per cent of the marketshare as opposed to 58 per cent held by foreign vendors. This, Gartner warned, is likely to "slip even further by 2008", if Indian vendors do not focus on the domestic market opportunity.

"If Indian vendors have no standing in the local market and do not compete for higher-end deals domestically, it will hamper their prospects in pursuing similar deals in global markets," Iyengar said.

There is a lack of management vision and clear mindset among domestic vendors, which are hampering their growth prospects.

However, this would change and the domestic market will emerge in the 2008-2010 period, if the overall economy continues to post a strong growth.

'Conquering IT Complexity', a two-day event slated to open on Tuesday, will focus on the future of technology, software as a service, BPO, security and business intelligence, benefits realisation and costs of outsourcing.

BIG BYTES

• ICT spending is poised to surpass $54.8 billion by 2008, recording a 19 per cent annual growth, from $29.5 billion posted in 2004
  
• The growth will be driven by economic upswing of the country, government policies and an expected increase in FDI
  
• Telecom would be the most dominating sector, followed by hardware, IT services and computer software