Gartner Says Indian IT Market To Reach US $110 Billion In 2012
Highlights Key Predictions for Indian IT Marketing in 2008 and Beyond
Mumbai, India — IT end user spending in India is expected to grow at a compound annual growth rate (CAGR) of 14.8 per cent from 2007 through 2012 to generate US $110 billion in 2012, according to Gartner, Inc. In 2008, IT end user spending is on pace to reach US $64.7 billion, a 17.2 per cent increase from 2007.
This prediction, supplemented by a robust gross domestic product (GDP) averaging 8.08 per cent growth from 2007 through 2012, means the Indian market continues to represent a significant growth opportunity for IT vendors. (See Table 1)
India is poised for double-digit growth across many vertical markets, with financial services and communications organizations spending the most on IT, closely followed by services, manufacturing and government.
“Indian businesses continue to invest in IT in order to drive operational excellence and innovation,” said Naveen Mishra, senior research analyst at Gartner. “Small and midsize businesses (SMBs) will drive the growth of various IT-related industries, with the critical involvement of value added resellers, distributors and retailers. Additionally, the Indian government’s pro-business policies and their own increasing use of IT will continue to build confidence among local companies seeking to invest in and use IT.”
Gartner has outlined key predictions for the Indian IT market in 2008 and beyond.
By 2012, Gartner predicts that the Indian market will ship nearly 24 million PCs, of which more than 50 per cent will be mobile PCs. By 2012, the Indian market will ship more mobile than desk-based PCs. While desk-based PCs are expected to represent 46.1 per cent of the total market, the rest will be mobile PCs. However, Gartner expects that the rapid growth of mobile PCs will outstrip the share of desk-based PCs in the home segment. By 2010, mobile PCs will contribute 51.8 per cent of total shipments and will rise to 61.4 per cent by 2012. PC penetration is increasing in India’s smaller cities, and these cities will continue to drive growth, especially for desktops. Small business and consumer segments will lead this march in smaller cities. The demand for nearly 35 per cent of all PCs sold today is from the top 20 to 100 cities.
The Indian server revenue market is poised for 6.3 per cent CAGR from 2007 through 2012. This growth will be primarily fuelled by the growth in the x86 and the Itanium platform. Unit shipment growth will experience a 10.2 per cent CAGR for the same period. Non-x86 based platforms will continue to dominate the high-end and midrange server segments, especially in large enterprises such as the banking, telecommunications and government sectors. Feature-rich processors in x86 servers will account for the majority of server spending, followed by RISC/Itanium-based servers.
The total software market in India will reach $3.4 billion by 2012. India is one of the fastest-growing software markets, and it is expected to register the third highest CAGR of 16.3 per cent for the forecast period of 2007 through 2012. Software spending and plans for critical IT initiatives to attain business agility will remain unaltered. Demand from vertical markets, which see IT as a core business enabler such as banking, finance and insurance will drive the software market in India. Increases in mergers, acquisitions and alliances in the local market by Indian companies will increase spending on software segments for applications and process integration.
India’s domestic IT services market is the fastest-growing market in Asia/Pacific with a CAGR of 20.2 per cent from 2007 through 2012, reaching $11.8 billion in 2012. The Indian IT services market is fragmented, and competition will intensify with new players entering into the market, forcing providers to find their market niche and differentiation to win deals. Top technology priorities include security, business intelligence and enterprise application projects.
By 2012, the telecommunications services market in India is expected to reach $52 billion growing at a CAGR of 26.8 per cent from 2007 through 2012. India will remain a wireless and voice-dominated market until at least 2011, and wireline technology will take a back seat. Broadband penetration will reach above 7 per cent by 2012, and Broadband Wireless Access based solutions will be the growth drivers.
Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,000 associates, including 1,200 research analysts and consultants in 80 countries. For more information, visit www.gartner.com.
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