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Internet of Things to boost India's IT spending

Posted: 04 Nov 2015     Print Version  Bookmark and Share

Keywords:IT  Internet of Things  digital business  dynamic algorithms 

The Internet of Things (IoT) will boost India's spending on information technology, increasing by 7.2 per cent to $72.3 billion in 2016, according to Gartner.

The IT industry is being driven by digital business, and an environment driven by a connected world. Gartner predicts spending on IoT hardware will exceed $2.5 million every minute in 2016. Mike Harris, group vice president at Gartner, explained to an audience of more than 1,000 CIOs and IT leaders at the Gartner Symposium/ITxpo, that interconnections, relationships, and algorithms are defining the future of business.

"In five years, 1 million new devices will come online every hour. These interconnections are creating billions of new relationships. These relationships are not driven solely by data, but algorithms," said Partha Iyengar, head of research at Gartner India. "Data is inherently dumb. It doesn't actually do anything unless you know how to use it, how to act with it. Algorithms are where the real value lies. Algorithms define action. Dynamic algorithms are the core of new customer interactions."

The algorithmic economy will power the next great leap in machine-to-machine evolution in the IoT. Products and services will be defined by the sophistication of their algorithms and services. Organisations will be valued, not just on their big data, but the algorithms that turn that data into actions, and ultimately impact customers.

"India will continue to be the fastest growing IT market for the second year in succession and will continue growing to total $87.67 billion by the end of 2019," said Aman Munglani, research director at Gartner. "India is currently the third largest IT market in Asia/Pacific, and by 2019 India will become the second-largest IT market within the Asia/Pacific region, following China."

Devices, which include mobile phones, PCs and tablets will account for almost 33 per cent of the overall IT spend in India, and the devices segment will grow 9.4 per cent in 2016. Mobile phones will continue to be the single largest technology sub segment in India and the third fastest-growing through 2019.

"Data centre systems will grow 3.9 per cent in 2016, with most of this growth coming from enterprise network equipment and servers that will grow at 5.9 per cent and 5.3 per cent, respectively. IT services, which accounts for 18.1 per cent of overall IT spend in India, will be the fastest growing segment in India in 2016 with 13.8 per cent growth year on year. Within these segments, business IT services will grow 15.2 per cent over 2015 figures," said Munglani.

Software, which accounts for nearly seven per cent of IT revenue in India, will grow 12.7 per cent as a segment, but within this segment, enterprise application software will be the fastest growing sub segment in 2016, with revenue forecast to grow 16.2 per cent over 2015. Communication services will continue to account for the largest share of IT spend in India and will account for 39.2 per cent of revenue in 2016. However, this will also the slowest growing segment with a 2.1 per cent increase in revenue in 2016.

The driving force behind this IT spending growth is the emergence of digital business.

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