IT spending in India will reach $87.1 billion in 2018, says Gartner

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India IT spending is projected to total $87.1 billion in 2018, an increase of 9.2 percent from 2017 estimated spending of $79.7 billion, according to the latest forecast by Gartner.

Enterprise software and IT services continue to exhibit strong growth, with devices segment continuing to drive the majority of overall IT spending in India. Software spending is projected to grow 17.9 percent in 2017, and it will grow another 15.3 percent in 2018 to reach $5.7 billion (see Table 1). IT services spending is on pace to grow 15.7 percent in 2017 to reach $12.6 billion, and increase 13.8 percent in 2018 to reach $14.3 billion.

The devices segment is expected to register an increase of 23.2 percent in 2017 and 13 percent in 2018. Increased average selling prices for premium phones in mature markets, partially due to the introduction of the iPhone 8 and X, along with an underlying demand for PCs from businesses replacing their machines with Windows 10 PCs is driving the growth in this segment.

“The IT buying landscape is changing. Digital business transformation is creating connected platforms and new industry revenue streams,” said Ganesh Ramamoorthy, managing vice president at Gartner India. “Organizations that are not creating new digital business models, or new ways to engage constituents or customers, are falling behind. Those vendors that do not move more quickly than their clients, will be left behind.”

“Digital disruptors are emerging in all industries. We have seen this in books, clothing, and now it’s happening in other industries such as traditional grocery markets and consumer durables as well,” said  Ramamoorthy. “Indian CIOs must therefore urgently embrace digital transformation. They must build the momentum to scale and create value by amplifying the power of their people, their organization culture, and their technology platform to deliver breakthrough value.” CIOs trying to lead digital transformation at the speed needed to succeed need a mix of three scale accelerators: digital dexterity, network effect technologies, and an industrialized digital platform.

“Scale is not just about size, it occurs up, across and out. Scaling Up allows for gaining efficiencies. Scaling Across quickly takes capabilities learned from one organization into another, while Scaling Out interconnects internal and external platforms and ecosystems,” said Val Sribar, senior vice president at Gartner.

First Scale Accelerator: Digital Dexterity
Digital dexterity is about a new organizational design and a new talent mix for a new working environment – a high-performing digital workplace. Organizations must change internally to change externally. “To scale, we need people with digital dexterity. People who are collaborative, agile, analytical, innovative and creative,” said Sribar. “People who have both the ability and the desire to exploit existing and emerging technologies for better business outcomes.”

Second Scale Accelerator: Network Effect Technologies
Network effect technologies transform the CIO’s work from making tactical technology decisions into building strategic platforms. This unique set of technologies creates virtuous patterns of growth, where waves of disruption build upon each other, exponentially. Three network effect technologies to focus on for 2018 include: the Internet of Things (IoT), application programming interfaces (APIs), and artificial intelligence (AI). “IoT scales the physical world. IoT allows us to sense, measure and mediate everything from oil pipelines to human veins. It allows us to make better decisions faster,” Sribar said. “As the number of connected devices grows, you go from no information to abundant data. The network effect of IoT quickly converts individual objects into systems.”

Third Scale Accelerator: Industrialize the Digital Platform
The industrialized digital platform unleashes the digital dexterity of your workforce, and it unlocks the potential of network effect technology. To industrialize means using a digital platform to create new digital market places. “The beauty of the industrialized digital platform is that it enables you to create value in all directions at scale: up, across and out,” Mr. Sribar said. “Value creation used to be one directional: from the organization to customers. Now value creation can scale in all directions, from anyone, anywhere.”

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