Indian IT spending to grow slow in 2009

NEW DELHI: The country's IT spending is expected to slacken this year, growing at an annual 14.1 per cent, down from 18.1 per cent recorded in 2008 due to the ongoing economic slowdown, according to a research report.

Springboard Research in its brief titled 'India IT Market Predictions 2009' said, IT spending in verticals like retail and real estate will be hardest hit, while the advent of 3G and a protected financial system will help sustain growth in the telecom and banking/finance verticals respectively.

In addition, government initiatives will spur economic growth and increase spending on public security and national defence, coupled with rural sector initiatives should include outlays for new technology in the years to come.

"With the economic crisis expected to further worsen, we will see IT spending affected in India - although not to the same degree as in North America, Europe and other Asia Pacific markets like Japan, Australia and Korea", said the firm's Research Research Manager Manish Bahl.

"On the other hand, the country had delivered impressive growth and profits to both leading multinational and domestic vendors last year, and for many of these vendors, their Indian revenues grew more than 50 per cent in 2008," added Bahl.

The study highlights the top 10 trends that will shape the IT market in India this year including the arrival of 3G which would unlock enormous opportunities for the IT vendors.

Also, cost concerns would drive a key focus on IT infrastructure consolidation and economic pressures to drive SMBs towards outsourcing.

Start-ups and smaller firms will become more important accounts for IT vendors while virtualization would gain traction in medium and large sized enterprises and IT outsourcing could be seen as a catalyst to HR retention and cost reductions during the economic squeeze, it said.