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Mumbai, April 6, 2009 – A survey of 467 Chief Information Officers conducted by IDC India reveals that they expect the economic slowdown to end by Oct-Dec 2009 and that their focus is shifting to better management of existing IT infrastructure by consolidating, optimizing and leveraging resources, from building new capacities.
The economic slowdown is accelerating enterprise transformation, which is manifested in cost savings, productivity enhancement, customer retention, and new IT engagement/delivery models, according to a study by IDC India
“Identifying Opportunities in the Current Economic
Scenario”. The study was conducted across 467 CIOs from mid-sized and large enterprises across 18 industry verticals in February-March 2009.
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“The IDC CIO survey provides pointers to IT vendors for strategizing their business agenda in the mid-term to effectively ride out the economic slowdown and stay focused on their priorities,”
Kapil Dev Singh, Country Manager, IDC India said while presenting the results of the survey.
About 66% of the CIOs contacted felt that the slowdown would end by the fourth quarter (October-December) of 2009. However, in view of the larger macro-economic picture and the lag in terms of IT buying by enterprises, IDC India expects the slowdown to extend and IT spending to revive after the second quarter (April-June) of CY 2010.
Table 1 Duration of Economic Slowdown*
| Expected end of the economic slowdown |
% of CIO |
| Q1 2009 (Jan-Mar) |
5% |
| Q2 2009 (Apr-June) |
14% |
| Q3 2009 (July-Sept) |
16% |
| Q4 2009 (Oct-Dec) |
31%
(Median Value) |
| Q1 2010 (Jan-Mar) |
16% |
| Q2 2010 (Apr-June) |
6% |
| Q3 2010 (July-Sept) |
3% |
*Base: 467 CIOs Source: IDC India’s “Identifying Opportunities in the Current Economic Scenario” report (March 2009)
The study found that enterprises are cutting back on new projects and focusing on the maintenance of existing IT setups. Of the total planned IT expenditure for 2009, enterprises plan to spend 20% on new purchases and reserve the balance for managing the existing setup.
The surveyed CIOs said that green technologies like Virtualisation, Unified Communications (UC), and others like Business Intelligence (BI) and Data Warehousing (DW), Software-as-a-Service (SaaS), and Open Source are the emerging investment priorities in 2009.
The study covered product lines ranging from access devices, networking infrastructure, software, storage, servers and technology solutions that the domestic market procures.
Table 2 Top Two CIO Investment Priorities for 2009*
| Technology/Technology Platform |
Percentage of CIOs regard it among their Top 2 IT spending priorities in FY 2009-10 |
| Software-as-a-Service (SaaS) |
90% |
| Business Intelligence (BI) and Datawarehousing (DW) |
69% |
| Unified Communications (UC) |
68% |
| Virtualisation |
64% |
| Open Source |
45% |
*Base: 467 CIOs Source: IDC India’s “Identifying Opportunities in the Current Economic Scenario” report (March 2009)
IT hardware, software sales to dip 20-40% in 2009
The IDC India study concludes that the investments in PCs, servers and computer peripherals are expected to decrease by 20%-40% as compared to CY 2008. This is likely to directly impact hardware vendors and off-the-shelf software vendors.
IT services vendors are likely to be the least impacted if they focus on providing services like Infrastructure Management, Business Transformation and Business Continuity.
Note for Editors:
About ‘Identifying Opportunities in the Current Economic Scenario’ Study (March 2009)
The purpose of this IDC special study was to analyse and draw out key economic and market indicators for the impact on domestic IT spending and identify opportunities for ICT vendors. The study methodology includes:
a) End-user enterprise CIO survey across important verticals, b) ICT industry/vendor tracking, c) Opinions of industry experts, d) Secondary research. The report provides a considered analyst view of the current economic slowdown’s impact on domestic IT spending, the need for businesses to control costs and opportunities that would emerge out of this scenario in the India enterprise and SMB space for ICT vendors.
For media inquiries, please contact:
Sanjiv Kataria
Strategic Communications & PR
+91-9810048095
sanjiv.kataria@gmail.com
Vishaal Bhatnagar
Associate Vice President, IDC India
+91-9810191634
vbhatnagar@idcindia.com
For industry inquiries, please contact:
Mukesh Jain
IDC India
+91-9312075521
mjain@idcindia.com
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