Indian IT spend to swell to $72 bn by 2013, says Gartner

IT spending in India is projected to total $71.5 bn in 2013, a 7.7% increase from the $66.4 bn

The latest findings by global information technology (IT) research and advisory firm Gartner spells both good and bad news for IT.

First the bad news. According Gartner, global IT spends will remain stagnant in 2013, as companies are likely to keep their IT budgets down.

The good news is that emerging markets such as India, Africa, Brazil and China will spend more on IT in 2013. IT spending in India is set to touch $71.5 billion in 2013, a 7.7 per cent rise from the $66.4 billion projected for 2012.

Gartner said that for the first time, Indian market would see an increase in spends in the services and software sectors. This points to the fact companies are now more open to outsourcing. The services spend in 2012 is expected to be in the region of $9.2 billion, which may touch $16 billion by 2016, said the IT research firm.

India has traditionally focused on the hardware and telecom segments. The telecom segment, which accounts for 67 per cent of the Indian ICT market, is set to grow at seven per cent revenue growth in 2013.

“India, like other emerging markets, continues exercising strong momentum despite inflationary pressures and appreciation of local currencies, which are expected in rising economies,” said Peter Sondergaard, senior vice-president and global head of research at Gartner.

According to Partha Iyengar, head of research — India, at Gartner, the Indian IT sector will do better than the growth target predicted by Nasscom (11-12 per cent). “The one area that the Indian IT players need to focus is the sales and marketing effort,” Iyengar said.

Globally, says Gartner, budgets will be under pressure.

“We still see budgets in the US growing at a tepid pace. They are flat or will grow by a percentage point. In Western Europe, we are seeing a decline in IT spends as companies continue to be under pressure. We are also seeing IT spends moving to newer technology spends such as cloud, mobile, and social collaboration,” said Sondergaard.

Although IT budgets are flat, technology remains to be the core for businesses, as spends are moving out of the CIOs control to other segments of companies, Sondergaard said.