IT spending in India is projected to grow 6.9 per cent to reach USD 72.4 billion in 2017 due to growth in software and IT services revenue from estimated spending of USD 67.7 billion in 2016, market research firm Gartner today said.
"Driven by growth in software and IT services revenue, IT spending in India is forecast to reach USD 72.4 billion in 2017, up 6.9 per cent from 2016 estimated spending of USD 67.7 billion," Peter Sondergaard, Senior Vice President -Research, Gartner said.
Analysts said the key vertical segments driving IT spending growth include communications, media and services, banking and securities, manufacturing and utilities markets.
Sondergaard said that through 2018, half the cost of implementing solutions will be in integration and security of Internet of Things and real-time analytics account for 30 per cent of total IT market.
He said that by 2021, Digital giants will disrupt the digital interactions and have their presence in 20 per cent of overall market where companies from countries like India and Western Europe are lacking.
"Most of the Digital giants are either from US or China. India and Western Europe have no digital giants. We have to resolve ourselves whether that is acceptable for the economic policy perspective because at the end of the day, this may result these giants controlling relationship with customers in India," Sondergaard said.
He said one solution to resolve this can be government intervention but that can be questioned if that would be valid strategy.
"Something needs to be done that is not necessarily in the scope of economic policy today in India or West Europe to create a technology platform that you require consumers to use. That is a hypothetical situation. Therefore, the question is how can you use economic policy to have faster level of innovation that creates a platform alternatives for future," Sondergaard said.
Gartner India head of research and Gartner Fellow Partha Iyenger said that Software spending is projected to grow 7.3 per cent in 2016, and it will grow another 12.8 per cent in 2017 to total USD 5 billion.
"IT services spending is on pace to grow 8.5 per cent in 2016 to reach USD 11 billion, and increase 13.5 per cent in 2017 to reach USD 12.5 billion," Iyengar said.
Talking about government intervention to push Indian IT companies, Iyengar cited example of China where one cannot user Google, Facebook, Gmail due to government intervention and even if China opens up its market language barrier may prevent local people there from using English platforms.
"It (government intervention) is not possible to do in
democratic society like India and similarly in Western Europe. It is not perfectionism that will create environment but incentives but IT driven mindset, policy etc where Indian policy makers need to focus," Iyengar said.
He said that Alibaba has said that after China, very clearly, India is its target market.
"If you look at their investment in PayTm and some other investments, WeChat is already there, now you look at a scarier thought then Google dominating India, its Alibaba dominating India and Indian commerce.
These are issues that should create a sense of urgency both on the commercial side, start-up side as well as policy makers to promote our own dominance as opposed to just what US and Chinese do," Iyengar said.
