India IT spending to reach US$71.3 billion in 2014, says Gartner
Press release, October 23; Alex Wolfgram, DIGITIMES [Thursday 24 October 2013]
IT spending in India is projected to total US$71.3 billion in 2014, a 5.9% increase from the US$67.4 billion forecast for 2013, according to Gartner. IT services will record the strongest revenue growth at 12.1%. Software revenues will grow 10% and the telecommunication services segment, that accounts for 42.1% of the India ICT market, is set to grow 2% in 2014.
"The digital world is here and this results in every budget being an IT budget; every company being a technology company; every business is becoming a digital leader; and every person is becoming a technology company," said Peter Sondergaard, senior vice president at Gartner and global head of research. "This is resulting in the beginning of an era: the digital industrial economy. The digital industrial economy will be built on the foundations of the nexus of forces (which includes a confluence and integration of cloud, social collaboration, mobile and information) and the internet of everything by combining the physical world and the virtual."
The IT market in India is the third-largest among emerging economies and the fourth-largest among developing and mature Asia/Pacific countries.
The telecommunications services market which includes fixed and mobile, data and voice services will continue to be the largest IT segment in India with IT spending forecast to reach US$30 billion in 2014. The devices market, which includes handsets, PCs, tablets and printers is expected to total US$23.5 billion in 2014, a 6% increase from 2013. IT services will record the fastest growth amongst the various segments, and it is projected to grow 13% to reach US$11.2 billion in 2014. Software will account for US$4.1 billion in revenues, said Gartner.
The India devices market will emerge as the largest segment of IT spend in India by 2017. Growth within the segment will be driven by the sales of handsets, which will be amongst the fastest growing sub segments within the India IT industry. Handset revenues will total US$26 billion in 2017 and will account for 76.4% of device revenues and 28% of overall IT spend in India in the year 2017.
"Mobile smart devices have taken over the technology world. By 2017, new device categories: mobile phones, tablets, and ultra-mobile PCs will represent more than 80% of device spending. Gartner also forecasts that by 2017, nearly half of first-time computer purchases will be a tablet. Mobile is the destination platform for all applications," said Sondergaard.
"The recent currency fluctuations have led to a wait and watch approach amid many India enterprises that have delayed the procurement of additional infrastructure in anticipation of better economic conditions in the future," said Partha Iyengar, analyst and Gartner India head of research. "This will have a bearing on the overall performance of the industry. However, the slowdown seen recently cannot be attributed to currency fluctuations alone, as the market is also being impacted by a slow down seen within the government and the PSU segments as a result of elections in the year 2014."
Mobility, cloud and social are among the top 10 India CIO priorities for 2013. As the nexus of forces gains acceptance, it will continue to drive enterprises and society toward a pervasively digital future and will drive a discussion between IT and business leaders to become more digital, noted Gartner.
"The long term growth projections of the India market continue to be positive. India is still a vastly underpenetrated market and growth within smaller towns and cities will continue to provide growth for IT vendors across categories, with the consumer market and the small business segment driving this. The rising disposable income and greater consumer awareness are other factors driving the growth of the India IT market," said Iyengar.
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