Indian IT market to reach $110 Bn in 2012

September: IT end user spending in India is expected to grow at a compound annual growth rate (CAGR) of 14.8 percent and will generate $110 billion in 2012, says information technology research and advisory firm Gartner. In 2008, IT end user spending is on pace to reach $64.7 billion, a 17.2 percent increase from 2007.

This prediction, supplemented by a robust gross domestic product (GDP) averaging 8.08 percent growth from 2007 through 2012, means the Indian market continues to represent a significant growth opportunity for IT vendors.

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India is poised for double-digit growth across many vertical markets, with financial services and communications organizations spending the most on IT, closely followed by services, manufacturing and government.

"Indian businesses continue to invest in IT in order to drive operational excellence and innovation," said Naveen Mishra, senior research analyst at Gartner. "Small and midsize businesses (SMBs) will drive the growth of various IT-related industries, with the critical involvement of value added resellers, distributors and retailers. Additionally, the Indian government's pro-business policies and their own increasing use of IT will continue to build confidence among local companies seeking to invest in and use IT."

According to Gartner, the Indian market, by 2012, will ship nearly 24 million PCs, of which more than 50 percent will be mobile PCs. Desktops are expected to represent 46.1 percent of the total market. However, Gartner expects that the rapid growth of mobile PCs will outstrip the share of desk-based PCs in the home segment. Gartner says that the demand for nearly 35 percent of all PCs sold today is from the top 20 to 100 cities.

The report further says that the Indian server revenue market is poised for 6.3 percent CAGR from 2007 through 2012. This growth will be primarily fueled by the growth in the x86 and the Itanium platform.

The total software market in India will reach $3.4 billion by 2012. India is one of the fastest-growing software markets, and it is expected to register the third highest CAGR of 16.3 percent for the forecast period of 2007 through 2012.

India's domestic IT services market is the fastest-growing market in Asia/Pacific with a CAGR of 20.2 percent from 2007 through 2012, reaching $11.8 billion in 2012.