IT spending in Asia-Pac to rise 6% in 2002

Thursday, 10 October 2002, 19:30 IST
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NEW DELHI: Information technology investments in the Asia Pacific region will post a growth of 5.8 percent over 2001 to $258 billion this year, led by large-scale spending on telecom sector, a research report said Tuesday. Worldwide IT spending is projected to total $2.3 trillion in 2002, a 3.4 percent increase over last year, said a statement by U.S.-based tech industry research firm Gartner Dataquest. "This region (Asia Pacific) is growing faster than the worldwide market. In 2003, IT spending in Asia Pacific will show stronger growth, as spending is forecast to increase 9.9 percent," said the statement. According to Gartner Dataquest, Asia Pacific IT spending this year is being led by the telecommunications sector that is set to represent 71 percent of overall technology spending. Spending on IT hardware is the second biggest item in 2002, valued at $38.6 billion, followed by the rapidly growing IT services sector at $31.28 billion. "While this does not indicate a return to the days of the dotcom bubble, it is an indication that organisations are beginning to look more favourably at investing in strategic solutions," said Daniel McHugh, an analyst with Gartner (Asia Pacific). "This investment is more closely tied to short term return on investment, productivity gain and cost reduction, rather than discretionary spending on new business models," he added. The report says India will also see "higher priority on spending on enhancing corporate security and network infrastructure" in this year. Spending on customer facing IT initiatives such as Customer Relationship Management (CRM), and the analysis of information gathered by these systems figures highly in overall priority, it added. "On the user side, one expects large scale IT deployment to continue in the banking and financial services sector and also by the government," said Ravindra Datar, a senior analyst (IT Services) with Gartner India. "Other verticals will follow too as competitive pressures force Indian companies to offer more and better products and services while simultaneously improving operating efficiencies. "Large scale activity on the BPO (Business Process Outsourcing) front, as more facilities are set up in the country, will also lead to a huge potential demand for IT products and services."
Source: IANS
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