Digital transformation to drive tech spending in China, India
Technology spending in India is projected to climb 12 percent this year to hit US$70 billion, while China will see its tech expenditure grow 8 percent to US$234 billion.
The government and business digital transformation efforts were expected to continue to fuel industry spending in the two Asian markets, according to Forrester.
The Indian economy would recover from its lost momentum over the past couple of years, which saw the country’s demonetisation and decision to fast-track the implementation of a common goods and services tax (GST). The government now was in a better position to drive reforms, boosted by the ruling party’s win in the recent state elections, noted Ashutosh Sharma, Forrester’s vice president and research director supporting CIOs.
He aded that public spending would see a lift, as investment in infrastructure programmes was expected to continue in a bid to create jobs and drive the economy. The government also was likely to move ahead with direct tax reforms and slash the national personal income tax to boost consumer spending.
Digital transformation, which was becoming mainstream amongst Indian businesses, would boost spending in services and outsourcing, including both upstream consulting and downstream implementation.
Sharma said software spending also would climb sharply, accounting for 11 percent of overall tech spending this year, and would continue to grow felled by increasing digitisation of business processes.
Hardware expenditure, however, would continue to decline as Indian businesses warmed up to the cloud, he said, noting that one in every eight technology projects had a cloud component. And while Internet of Things (IoT) hardware was a growth area, it was too small to be a significant driver, clocking just 5 percent growth rate in 2019.
In China, tech spending in 2018 would be fuelled by investment in digital innovation and efforts to grow the ecosystem, said Charlie Dai, Forrester’s principal analyst serving enterprise architecture.
He said adoption of emerging technologies such as container management, AI (artificial intelligence), IoT, and blockchain would increase the complexity of platform digitisation and application modernisation. This would drive spending on certain software categories and skillsets needed to implement them.
