The Hindu Business Line : Enterprise spending on ICT to grow over 16%: Gartner

ENTERPRISE spending on information, communications and technology (ICT) in India is expected to grow at 16.6 per cent, to $22.88 billion in 2005, as compared to the Asia Pacific growth of 7.6 per cent in that year, said Gartner, in its predictions for the coming year.

Of enterprise spend on ICT, $16.7 billion will be spent on telecom alone.

Hardware spend will be $ 3.34 billion, growing 21.1 per cent, software spend $ 0.52 billion, growing 16.4 per cent and IT services spend $ 2.32 million, growing 18.3 per cent.

"For vendors, the stakes could not be higher; especially local vendors, who have long ignored the local market, cannot afford to miss this transition," said Mr Sujay Chohan, Vice-President & Research Director, Gartner India, at a news conference here.

According to him, the IT industry will have little resemblance to that of today, "yielding extraordinary benefit with network security, convergence, IP telephony, software as services and instant messaging all maturing within 36 months."

In the Asia Pacific, micro-commerce will emerge as a major new business opportunity and there will be a fundamental change in the way software is built and used with the continuing development of Web services, said Gartner.

Gartner also said that open source and offshore IT services will continue to grow. "We believe 60 per cent of large and mid-size Government agencies in Asia Pacific will use open source software for applications in their core business processes by 2010. That compares with less than 15 per cent today," said Mr Chohan.

By 2007, the globally sourced component of IT services spending will be about $ 50 billion or seven per cent of the total of $ 728 billion. Less than 3 per cent of spending in 2004 is attributable to sourced services, said Gartner. The hype of offshore IT services is real and reflects a dramatic uptake in global sourcing of these services.

However, the growth in offshore BPO services outpaces the growth in global sourcing of IT services, said Gartner. The offshore component of global BPO services spend is expected to grow from $ 3 billion to (2.4 per cent of total market spend of $ 124 billion in 2004) to $ 24 billion (15 per cent of total market spend of $ 161 billion in 2007).

Gartner also warned global IT vendors to take emerging competition from China seriously, with at least three Chinese IT companies becoming significant global competitors by 2010.

Among the other predictions by Gartner is one that says that three of the top 10 PC vendors will exit the market by 2007, with three lean years expected after 2005.

"Unit growth will fall below the double-digit rates the market is accustomed to and revenue growth will come to a standstill," said Mr Chohan.