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IT spending in India to grow at 16.3% to $43 bn: IDC

Jul 23 2012, 16:29 IST
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SummaryThis is expected due to increased spending by SMEs and rising investment in emerging technologies, research firm IDC today said.

IT spending in the country is expected to grow by 16.3 per cent to USD 43.57 billion (Rs 2.43 lakh crore) in 2012, on increased spending by SMEs and rising investment in emerging technologies, research firm IDC today said.

According to IDC's report "India IT Market Overview Report - 2012", the total IT market in India is expected to grow to USD 43.57 billion in 2012 from USD 37.46 billion (Rs 2.09 lakh crore) in 2011.

Despite lesser-than-expected GDP growth figures, India still commands a high growth rate, next only to China among BRIC countries, and higher than several developing economies, IDC said.

It added that though Rupee depreciation and high inflation have slowed down consumer spending, but that is expected to be a temporary phenomenon.

"Cautious optimism will continue to be the order of the day for most enterprises. However, this is not expected to reduce IT investments.

It merely indicates that future investments will undergo intense scrutiny and that effective financial and risk management will gain priority in the days to come," IDC India Research Manager (Consulting Group) Ravi Sharma said.

According to the report, 38 per cent of the enterprise IT spending in 2011 was by the SME segment, which is expected to grow to 43 per cent by 2015.

Traditional verticals like banking, financial services and insurance (BFSI), communication and media, government, manufacturing and IT/ITeS continued to be the highest spenders in 2011 with a moderate growth rate (2010-2015) of 14 to 18 per cent.

Retail and wholesale, energy and utilities, along with healthcare witnessed tremendous growth (more than 23 per cent) in IT spending and the trend is expected to continue, it added.

"Market driven policies pertaining to e-Governance, financial inclusion and youth-driven entrepreneurship are enabling rural development.

"Sector driven policies in the areas of infrastructure, anufacturing and retail have steered industry growth.

Political initiatives are increasingly driving demand for IT hardware," Sharma said.

The report said investments on emerging technologies like social media, cloud, mobility and big data are also on the rise.

"Although at a nascent stage of adoption, Indian enterprises have started leveraging social technologies externally for customer engagement and internally to promote team collaboration and knowledge sharing," IDC India Senior Analyst (Consulting Group) Pavan Magge said.

There is large demand for SaaS based applications among large enterprises and enterprise mobility is also at the top in terms of organisation focus and investments, he added.

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