)
"India is forecast to be the third largest IT market within the Asia/Pacific region by the end of 2016 and will further progress to become the second largest market for IT by the end of 2018," said Peter Sondergaard, senior vice president at Gartner and global head of Research. "Much of the growth from being the number four market in Asia/Pacific to number three is likely to happen in 2015."
IT spending in India is projected to total $73.3 billion in 2015, a 9.4 per cent increase from the $67.1 billion forecast for 2014, according to Gartner.
IT services will record the strongest revenue growth at 15.7 per cent in 2015; software will grow at 14 per cent. Devices will continue to account for the second largest part of the market with 33 per cent share of revenue and will grow 12.6 per cent in 2015. The telecommunication services segment will account for 39.3 per cent of the Indian ICT market and it is set to grow at 4.2 per cent revenue growth in 2015.
"IT spending in India is on pace to increase 2.9 per cent this year, primarily on the back of strong growth within the IT services and software, which will grow 10.5 per cent and 9.6 per cent," said Partha Iyengar, distinguished analyst and Gartner India head of research.
In 2014, mobile devices will grow 13.5 per cent, and will dislodge mobile voice services to be the largest segment within the overall IT market in India. Mobile data services will be the fastest growing segment in India, growing 18.2 per cent in 2014. Telecommunication services that will account for 41.4 per cent of overall IT spend, and it will decline 0.7 per cent in 2014.
"The impact that the digital business economy is having on the IT industry is dramatic. Since 2013 650 million new physical objects have come online. 3D printers became a billion dollar market; 10 per cent of automobiles became connected; and the number of Chief Data Officers and Chief Digital Officer positions have doubled. In 2015, all of these things will double again," said Sondergaard.
Gartner defines digital business as new business designs that blend the virtual world and the physical worlds, changing how processes and industries work through the Internet of Things.
"This year enterprises will spend over $40 billion designing, implementing and operating the Internet of Things," Sondergaard said. "Every piece of equipment, anything of value, will have embedded sensors. This means leading asset-intensive enterprises will have over half a million IP addressable objects in 2020."
There is a dramatic shift in IT spending power. Sondergaard said there is a shift of demand and control away from IT and toward digital business units closer to the customer. "Thirty-eight per cent of the total IT spend is outside of IT already, with a disproportionate amount in digital. By 2017, it will be over 50 per cent," Sondergaard said.
Gartner estimates that 50 per cent of all technology sales people are actively selling direct to business units, not IT departments. Millions of sales people and hundreds of thousands of resellers and channel partners are looking for new money flows in the fluid digital world, and they are finding eager buyers.
Talent key as industry moves to digital platform
Both Sondergaard and Iyengar stressed that with the shift towards adoption of digital platform, talent acquisition will be key. "By 2025 one in three job will be converted into a software, or a smart device or will be taken over by robotics. By 2018 digital business will require 50 per cent less business process workers," said sondergaard.
In case of the Indian IT services players, talent will be double edged sword as improvement in global scenario will also mean demand for traditional projects. "Indian firms will have to focus on hiring talent that addresses the traditional business as well as train employees in new age technology such as analytics, mobile and big data," added Iyengar.
