The Hindu Business Line : India, China growth rates may propel IT spend in Asia-Pacific region

FUELLED by robust growth prospects of India and China, the total IT spending in Asia Pacific region (excluding Japan) is estimated to touch $97 billion this year, despite an estimated slower economic growth.

"IT spending in Asia/Pacific excluding Japan (APEJ) is expected to remain robust in 2005, replicating its growth of 10 per cent in 2004, over the prior year. The total IT spending in the region will reach $97 billion in 2005, driven by a healthy 15 per cent growth in China and 22 per cent growth in India," according to research firm IDC.

The report said while both India and China would account for 42 per cent of total IT spending in the region this year, China would be more dominant market, with 33 per cent share of total IT spending in Asia Pacific.

"The high growth product/service market segments in 2005 would be smart handheld devices, IT planning and implementation services, IT training and education, application software, and system infrastructure software," it said.

IDC, last year, had predicted that the IT market would resurrect in 2004, after a three-year slump in technology related investments. For 2005, IDC said that the IT market in Asia/Pacific would maintain this growth momentum growing by 10 per cent to $97 billion, despite prospects of a slower economic growth relative to 2004.

"The total telecom services market in the region will grow by 11 per cent to $163 billion in 2005, driven primarily by growth in IP, broadband and wireless services," said Mr Piyush Singh, Managing Director, IDC Asia/Pacific.

It further predicted that offshore services and business process outsourcing (BPO) would accelerate. "In 2005, "offshoring" will accelerate as enterprises race to lower their cost structure, amidst global competition. The industry would continue to shift its capabilities and offerings closer to business processes and value, through greater investment in business consulting and process expertise, as well as greater focus on business process outsourcing," it said.

IDC predicted comparatively rapid adoption of BPO in emerging markets in Asia as local companies increasingly compete with global entities and face continual changes in regulatory dynamics.

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India, China growth rates may propel IT spend in Asia-Pacific region