Indian ICT market to reach $24.3bn by '11: Gartner

* Indian CIOs Report Stronger Than Average IT Budget Increases at 13% Versus the World Average of 3.3% for 2008

Mumbai, India, 6 February 2008: At a curtain raiser to the Gartner India CIO Summit 2008, Gartner Inc. today announced that India's ICT market is estimated to grow at a five-year compound annual growth rate (CAGR) of 20.3% to reach $24.3 billion, or nearly 2% of the country's gross domestic product (GDP), by 2011. This growth will be driven by Indian chief information officers (CIOs) continuing to build and consolidate the basic IT infrastructure, in addition to small and midsize businesses (SMBs) increasingly leveraging technology to drive business growth and efficiency.

Based on the findings of the Gartner EXP Worldwide Survey of CIOs, Indian firms report stronger than average IT budget increases of around 13% versus the world average of 3.3% for 2008. This increased spending by Indian CIOs is directed primarily towards building new business capabilities, with 30% of IT spend allocated for business growth and 19% towards business transformation.

As Indian companies continue to increasingly take on global competition overseas as well as at home, Indian CIOs will need to re-examine their business models and processes to transform their IT organizations. Gartner's India CIO Summit 2008, to be held at The Grand Hyatt, Mumbai on February 18-19, 2008, will concentrate on the significant challenges facing Indian CIOs and their teams as they strive to leverage IT to maximize their organization's competitiveness.

According to Mr. Peter Sondergaard, global head of research, Gartner, "Enterprise expectations of IT have been building over the past three years. The increase in IT spending is driven by business priorities that need CIOs to drive distinctive, customer-focused solutions. CIOs need to become more tolerant of risk and innovation, and flexible to meet changing market and customer demands."

The Indian IT landscape is evolving rapidly, driven by forces from a number of different directions, including continued growth in the offshore IT services sector, but increasingly augmented by strong domestic ICT growth. Almost all industries in India are seeing strong growth which, in an increasingly resource-constrained environment, they are trying to manage by rapidly improving their IT infrastructure.

According to Gartner, Indian firms are spending their budgets more on hardware and software than people. This is significant as Indian firms continue to build out their infrastructure. Indian enterprises will be investing heavily in bringing the base infrastructure "" long underinvested "" up to global standards to meet the growing needs of the business. These allocations will change over time as the infrastructure matures. The HR component of the IT budget will grow as the emphasis shifts from implementing standard (generic) solutions to creating unique products and services. Currently, CIOs in India are focused more on generic IT than distinctive solutions required to drive growth.

The Gartner EXP CIO Survey shows that CIOs in India share similar priorities to CIOs worldwide.

Mr. Partha Iyengar, head of research - India, Gartner explains, "As the Indian economy continues to experience steady growth, most sectors have to deal with rising consumer expectations and competition - both at domestic and global levels. Furthermore, India's structural cost advantage is eroding, given the upward pressure on local wages and the weakening of the US dollar. Hence it is a business imperative for Indian companies to meet the demands of domestic competition and to offer value propositions that are attractive to offshore customers. In this context, Indian companies have to create distinctive solutions using IT to transform their business and garner a competitive edge."

CIOs have been building capabilities to meet expectations; however, making the difference requires them to move beyond thinking of IT in terms of technical cost and risk. CIOs who respond to business expectations seek to create distinctive solutions that define IT's contribution to the business. Creating distinctive solutions requires the refocusing of both a CIO's attention and IT investments""from generic IT to information and technology solutions that make the difference.

"To create distinctive solutions, Indian CIOs need to extend their strategies, metrics, personnel and leadership approaches," said Mr. Iyengar. "They must recognize how the enterprise needs to change to serve customers in unique ways, generate operational returns and develop new products and services. These are the areas in which IT can make the difference. Making the difference will require new skills, roles and relationships within the enterprise, and new approaches to delivering business- relevant solutions."

About Gartner

Gartner, Inc. (NYSE: IT) delivers the technology-related insight necessary for its clients to make the right decisions, every day. Gartner serves 10,000 organisations, including chief information officers and other senior IT executives in corporations and government agencies, as well as technology companies and the investment community. The Company consists of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 3,900 associates, including 1,200 research analysts and consultants in 75 countries worldwide. For more information, visit www.gartner.com.