India's IT spend to grow by 21.5 pc in 2007: IDC

Bangalore, May 4: Domestic IT spending in India is expected to soar by 21.5 per cent this year and touch Rs 75,891 crore, consequent to a major wave of IT investments across different sectors, IDC said today.

Speaking at an industry briefing session 'Directions08', titled 'Finding Opportunities in an Era of Disruption', IDC Country Manager Kapil Dev Singh said the Indian economy, which had posted a strong 8.5 per cent real GDP growth, saw IT investments going up in banks, financial service institutions, telecom, manufacturing, Government, resources, education and other industries.

''This is why India is the fastest growing country in domestic IT spending that saw 22.4 per cent growth last year. Apart from enterprise spending, rising affordability is resulting in consumers spending more on ICT products and services. PCs, mobile phones, printers, digital cameras and broadband are all gaining increasing penetration in this rapidly expanding market,'' he said.

IDC felt that the IT market would continue to be driven mainly by hardware spending across customer and enterprise segments.

''Disruption will set in for Small and Medium Business (SMB) focused go-to-market strategies for the India-based IT companies.

This year will mark the beginning of an aggressive focus from all major vendors to broaden and deepen their coverage of the SMB sector. Though per unit spend by these could be lower, but taking into account the huge numbers of SMBs going in for automation, it provides for a huge market,'' he said.

On SOA domain, Mr Singh said enterprises in India had matured to the extent of consolidating the IT infrastructure that they had acquired over the years. The move to SOA infrastructure would gather the much-needed momentum in 2007. However, cost pressures like rising salary and shortage of manpower availability was bound to dog the IT companies, he added.

He said that with a booming internet subscriber base that grew by 45 per cent last year according to TRAI, connectivity, content and convergence would run parallel courses. ''IDC expects internet subscriber base to grow at 50 per cent this year, with broadband subscribers accounting for 30 per cent of the total.'' Mr Singh said the explosion in mobile phone subscriber base in India would see a big marketing buzz around 3G and WiMAX. ''WiMAX operators will be selling the services as a means to boost broadband usage in smaller towns and even in remote rural areas. Handset vendors will also bring in 3G-ready handsets to the market, while Intel, the biggest proponent of WiMAX, could be launching WiMAX ready laptops,'' he added.

Calling upon the IT industry to change its positioning and market strategy, the IDC India chief said they should identify the structural shift and align themselves holistically. Dynamic IT, the key driver to the industry, would have to evolve its offerings accordingly and should be patient with the consumer market, he added.

UNI