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IDC: Indian IT Investments Grow, Aided by SME's and Emerging Technologies

The Indian SME segment is vastly increasing it's IT spending, contributing towards 38% of Enterprise IT spending in 2011 -- with this proportion expected to grow to 43% by 2015 - according to a recent report unveiled by analyst firm IDC.

"Market driven policies pertaining to e-Governance, Financial Inclusion and Youth-driven Entrepreneurship are enabling rural development. Sector driven policies in the areas of Infrastructure, Manufacturing and Retail have steered industry growth. Political initiatives are increasingly driving demand for IT Hardware," said Ravi Sharma, Research Manager, Consulting Group, IDC India.

IT spending in the Indian market will grow by 16.3% in 2012, despite the economic volatility, with the total IT market expected to grow to $43.57 billion in 2012, up from $37.46 billion USD in 2011, IDC said.

"Cautious optimism will continue to be the order of the day for most enterprises. However, this is not expected to reduce IT investments. It merely indicates that future investments will undergo intense scrutiny and that effective financial and risk management will gain priority in the days to come," added Ravi.

This reported growth is despite of economic uncertainties, according to IDC. "Despite lesser than expected GDP growth figures in 2011-2012, followed by a similar trend in the quarter ending June 2012, India still commands a high growth rate, next only to China among the BRIC countries - and higher than several developing economies", the report stated.

According to the report, while the depreciation of the Rupee and high inflation are factors that have slowed down consumer spending, IDC expects this to be only a temporary phenomenon.

The IDC report found that "Traditional verticals such as BFSI, Communication & Media, Government, Manufacturing and IT/ITeS continued to be the highest spenders in 2011 with a moderate CAGR (2010-2015) of 14%-18%."

Also "Retail & Wholesale, Energy & Utilities, and Healthcare witnessed tremendous growth (>23%) in IT spending," the report stated adding that IDC expects this trend to continue.

The report also stated that "Investments on emerging technologies such as Social Media, Cloud, Mobility and Big Data" are increasing.

"Although at a nascent stage of adoption, Indian enterprises have started leveraging social technologies externally for customer engagement and internally to promote team collaboration and knowledge sharing," said Pavan Magge, Senior Analyst, Consulting Group, IDC India.

"There is large demand for SaaS based applications among large enterprises. Enterprise mobility is at the top in terms of organization focus and investments. Awareness around Big Data technologies and its benefits is increasing with time, with vendors and technology advisory firms playing a key role in educating enterprise stakeholders", Magge added.

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