Chennai: The government in India will spend $6.88 billion on IT products and services in 2015, an increase of 5.2 per cent over 2014, thus boosting IT expenditure in the country, according to Gartner. On the other hand, worldwide IT spending across verticals is forecast to total $2.69 trillion in 2015, a 3.5 per cent decrease from 2014.
The forecast for India includes spending on internal services, software, IT services, data centres, devices and telecom services. Government comprises state and local governments and the Centre. IT services, which includes consulting, implementation, IT outsourcing and BPO, is expected to grow 10 per cent this year to reach $1.6 billion. The BPO sub-segment may grow by 21 per cent. Telecom services will also be a $1.6 billion market, with the mobile network services sub-segment recording a growth of 3 per cent in 2015 to reach $787 million.
“Government spending on software will total $869 million in 2015, a 10.6 per cent increase from 2014,” said Anurag Gupta, research vice president at Gartner. “The software market will be led by growth in vertical-specific software. These are standalone applications that are not modules or extensions of horizontal applications.”
The investments in the Digital India initiative, led by a focus to allow access of government services on mobile devices, expansion on broadband and planning for smart cities, will be a stimulus for the Indian government’s ICT initiatives, Gupta added.
On the other hand, worldwide IT spending across vertical industries is forecast to decrease by 3.5 per cent because of the rising US dollar. IT spending in the top three sectors — manufacturing, government and banking — are projected to decrease by 4.5 per cent, 5 per cent and 2.4 per cent respectively. The retail industry may see the lowest decrease of 1.5 per cent in IT expenditure. Technologies that help understand customers better and improve engagement through multi-channel experience in the retail sector may facilitate the buying process. Within stores, creating IT infrastructure to accept various mobile payment systems and digital wallets will be high-priority items in the second half of 2015.
Even as IT spending in the banking and securities segment is forecast to decline 2.4 per cent in 2015, Gartner expects banks in developed markets to double their IT budgets to support digital and other new technology initiatives through 2019 while reducing legacy maintenance, to sell products, service customers and reduce operational costs.
"Appreciation of the US dollar (mainly against the euro, yen and the ruble), along with the relative slowdown of emerging markets (particularly Russia, Brazil and China), had a double impact on IT spending in 2015, and explains the downward revision in the forecast. Unsurprisingly, most technology firms reporting revenue in US dollars have taken a negative hit on their quarterly revenue earnings," said Gupta.
