IT spend in Asia-Pacific to grow 9 pc: IDC

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Our Bureau

New Delhi, Dec. 15

INFORMATION technology spending in the Asia-Pacific region is projected to grow at 9 per cent to over $110 billion in 2006, with China and India accounting for 64 per cent of the region's incremental market value.

"For 2006, IDC predicts that spending on telecommunications services will grow at 8 per cent, exceeding $175 billion for Asia/Pacific (excluding Japan). The economic outlook for 2006 is healthy, despite continued global political, health, and environmental uncertainties. This, combined with the relentless pursuit of enterprises and their employees to be more competitive, bodes well for the information and communications technology (ICT) industry in the region," a latest IDC report has said.

In its annual outlook at the year ahead, IDC predicted that ICT spending and growth for the region would be fuelled largely by the surge of the e-empowered employees (EEE).

"The e-empowered employee is increasingly able to harness technology to be more productive and responsive. Work takes place anywhere, anytime, anyplace. Workspace boundaries are diminishing as the employee is no longer tied to an office location. Nine to five work hours make way for 24/7 operations," said Ms Eva Au, Managing Director, IDC, Asia/Pacific.

"Technology roadmaps will not only be determined by how it can be applied to enhance productivity, but also how it can support an always-connected, knowledge-driven and rapidly shrinking global economic society," IDC said adding successful companies would be those which can rise to the challenge and capitalise on the technology opportunities further enabled by the EEE.

It has direct impact on organisational efficiency, access to real-time information, quicker time-to-market and the ability of businesses to react to dynamic market conditions, it added.

Listing out its top predictions that will shape the ICT Asia Pacific industry in 2006, it said that wireless content packages would keep consumer spending on the boil.

"The combined wireless content industry, which encompasses games, music, ring tones, video and TV, would be fuelled by the proliferation of content and feature-rich applications that service providers can offer in the entertainment space, together with cost-saving services bundled with broadband access," it said.

Citing the recent announcements of eBay purchasing Skype and Google launching its own Voice over Internet Protocol (VoIP) software, Google Talk, the report said the consumer VoIP market continues to demonstrate healthy growth, with non-traditional operators moving into the space. It said that increased convergence would lead to overwhelming consumer choice and estimated that 15 million converged devices will be shipped in 2006 across Asia Pacific, reflecting a growth of 24 per cent over 2005 shipments.

"Open source gains traction in specific markets, particularly in China and India, and with the Governments. In 2006, IDC believes that building more open innovation communities will be a big focus for much of the industry. Generating revenue through traditional methods such as sale of the use of individual copies and patent royalty payments become more challenging with open source software. By making the software available as open source, customers are more likely to purchase related products or services," IDC said.

It further said that the industry was seeing an overlap between IT services and BPO delivery, as observed in IBM's acquisition of Daksh and network-based service providers like NCS of Singapore offering BPO services.

"Service providers will no longer find it profitable to own and control the entire service and delivery spectrum. Instead, they will be broadening their capabilities through globalisation, localisation and partnering," the report pointed out.

(This article was published in the Business Line print edition dated December 16, 2005)
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