India IT spending to grow 7.2% to $72.3 bn in 2016

CIO India
India IT spending is expected to grow 7.2 percent in 2016 to $72.3 billion, according to Gartner.

The single digit growth in the IT spending will be driven by digital business and a connected world, Mike Harris, group vice president at Gartner, explained today to an audience of more than 1,000 CIOs and IT leaders at the Gartner Symposium / ITxpo in Goa, India.

Gartner predicts spending on Internet of Things (IoT) hardware will exceed $2.5 million every minute in 2016. In five years, 1 million new devices will come online every hour.

India IT market size will reach $87.67 billion in 2019, said Gartner.

India is currently the third largest IT market in Asia Pacific. By 2019 India will become the second-largest IT market within the Asia Pacific region, following China.

How enterprises will spend on IT

Devices, including mobile phones, PCs and tablets, will account for almost 33 percent of the IT spend in India, and will grow 9.4 percent in 2016. Mobile phones will continue to be the single largest technology sub segment in India and the third fastest-growing till 2019.

Data center systems will grow 3.9 percent in 2016, with most of this growth coming from enterprise network equipment and servers that will grow at 5.9 percent and 5.3 percent, respectively.

IT services, which accounts for 18.1 percent of overall IT spend in India, will be the fastest growing segment in India in 2016 with 13.8 percent growth. Business IT services will grow 15.2 percent.

Software, which accounts for nearly 7 percent of IT revenue in India, will grow 12.7 percent. Enterprise application software revenue will grow 16.2 percent. Communication services will account for 39.2 percent of revenue with a 2.1 percent increase in revenue in 2016.

Leading CEOs have told Gartner that their digital revenue will increase by more than 80 percent by 2020. 125,000 large organizations are launching digital business initiatives now.

Gartner predicts that by 2017 the typical IT organization will spend up to 30 percent of its budget on risk, security and compliance, and will allocate 10 percent of their people to these security functions. That’s triple the levels of 2014.

Recommendations for CIOs

CIOs need to rethink their security and risk investments. Gartner recommends that enterprises move their investments from 90 percent prevention/10 percent detection and response, to a 60/40 split.

If a CIO is going out to buy products and services, that CIO will need new capabilities that most Mode 1 suppliers don’t have, or are struggling to deliver.

Baburajan K
[email protected]

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