$1.9 trillion opportunity..... digitalisation ....

Shivani Shinde Nadhe  |  Pune  

October 22, 2013 Last Updated at 14:40 IST

Digitalisation a $1.9 trillion opportunity for tech companies: Gartner
Devices to be largest IT spenders by 2017, pushing telecom to second place There is good news for the $108 billion Indian IT industry. The traditional IT services offering related to application development and management may be shrinking, but the industry has in front of it $1.9 trillion opportunity due to the digitalisation process that will encompass every aspect of the economy globally.

The initial signs of this are evident in the way IT spends are moving away from traditional verticals. According to Gartner over the next four years devices will be the biggest segment in terms of IT spends, pushing away the current telecom segment. The Indian devices market will emerge as the largest segment of IT spend in India by 2017. Growth within this segment will be driven by the sale of mobile phones which will be amongst the fastest growing sub segments within the Indian IT industry. Mobile phone revenue will total $26 billion in 2017 and will account for 76.4 percent of device revenue and 28 percent of overall IT spend in India in the year 2017.

“Historically telecom has been the largest IT spender but this is slowly device spending is becoming the biggest spender. India too is in line with this global phenomenon,” said Partha Iyengar, distinguished analyst and Gartner India head of research. 
IT spending in India is projected to total $71.3 billion in 2014, a 5.9% increase from the $67.4 billion forecast for 2013, according to Gartner. IT services will record the strongest revenue growth at 12.1%, Software revenue will grow 10% and the telecommunication services segment that accounts for 42.1% of the Indian ICT market, is set to grow 2% in 2014.

“The digital world is here and this results in every budget being an IT budget; every company being a technology company; every business is becoming a digital leader; and every person is becoming a technology company,” said Peter Sondergaard, senior vice president at Gartner and global head of Research.  
He further added, “This is resulting in the beginning of an era: the Digital Industrial Economy. The Digital Industrial Economy will be built on the foundations of the Nexus of Forces (which includes a confluence and integration of cloud, social collaboration, mobile and information) and the Internet of Everything by combining the physical world and the virtual.” 
The telecommunications services market which includes fixed and mobile, data and voice services will continue to be the largest IT segment in India with IT spending forecast to reach $30 billion in 2014. The devices market, which includes mobile phones, PCs, tablets and printers is expected to total $23.5 billion in 2014, a 6 percent increase from 2013. IT services will record the fastest growth amongst the various segments, and it is projected to grow 13 percent to reach $11.2 billion in 2014. Software will account for $4.1 billion in revenue. 
“Mobile smart devices have taken over the technology world. By 2017, new device categories: mobile phones, tablets, and ultra-mobile PCs will represent more than 80 percent of device spending. Gartner also forecasts that by 2017, nearly half of first-time computer purchases will be a tablet. Mobile is the destination platform for all applications,” said Sondergaard. 
Mobility, cloud and social are among the top 10 Indian CIO priorities for 2013. As the Nexus of Forces gains acceptance, it will continue to drive enterprises and society toward a pervasively digital future and will drive a discussion between IT and business leaders to become more digital.

“The long term growth projections of the Indian market continue to be positive. India is still a vastly underpenetrated market and growth within smaller towns and cities will continue to provide growth for IT vendors across categories, with the consumer market and the small business segment driving this. The rising disposable income and greater consumer awareness are other factors driving the growth of the Indian IT market,” said Iyengar.
 Future of IT Suppliers
The digital world runs faster for many traditional IT suppliers. In the past, the top technology companies reigned over the industry for long periods of time. However, now the leaders in areas such as cloud and mobile were not on many CIO’s radar five years ago.

“What many traditional IT vendors sold you in the past is often not what you need for the digital future. Their channel strategy, sales force, partner ecosystem is challenged by different competitors, new buying centers, and changed customer business model,” Sondergaard said. 

http://www.business-standard.com/article/companies/digitalisation-a-1-9-trillion-opportunity-for-tech-companies-gartner-113102200468_1.html