Domestic IT market to grow lower at 14%

Written by fe Bureau | Mumbai | Updated: Jul 8 2009, 06:07am hrs
Gartner feels that India's domestic IT market will grow around 14% this year, showing a minor decline as compared to last year's growth of 16-18%. Hence, it is expected that the country will see a minor decline in IT budget coming from its domestic market.

"Compared to other countries, India is in a better position. Its domestic market is expected to grow around 14% this year. We also expect that IT spend in India will see a minor decline as compared to last year. There could be some 2-3% decline as compared to last year's budget," commented Arup Roy, senior research analyst at Gartner.

However, according to Gartner, worldwide IT spending is on pace to total $3.2 trillion in 2009, a 6% decline from 2008 spending of $3.4 trillion. Continued weak IT spending because of the economic situation combined with the effect of exchange rate movements has resulted in Gartner lowering its 2009 forecast from its first quarter 2009 projections. In March, Gartner had forecast 2009 IT spending to decline 3.8%.

"While the global economic downturn shows signs of easing, this year IT budgets are still being cut and consumers will need a lot more persuading before they can feel confident enough to loosen their purse strings," said Richard Gordon, research vice-president and head of global forecasting at Gartner.

Gartner also predicted that worldwide, all four major segments of IT - hardware, software, IT services and telecommunications - will experience declining revenue, something that did not happen in the 2001 downturn.

The computing hardware segment will experience the steepest decline in 2009, with spending projected to decline 16.3%. While, the software segment will show the slightest decrease in 2009, with spending forecast to drop 1.6%.

"The forecast decline in spending growth for the hardware and software segments in 2009 has almost stabilised, and only minor downward revisions have been made to these forecasts this quarter," commented Gordon.