Indian IT Spending to Reach $72.3 Billion in 2016: Gartner

Indian IT Spending to Reach $72.3 Billion in 2016: Gartner

India’s IT spending is expected to rise by 7.2 percent in 2016 to reach $72.3 billion (roughly Rs. 4,73,886 crores), said leading market research player Gartner on Tuesday.

“India will continue to be the fastest growing IT market for the second year in succession and will continue growing to total $87.67 billion (roughly Rs. 5,74,696 crores) by the end of 2019,” said Aman Munglani, research director, Gartner in a statement.

India, currently the third largest IT market in Asia Pacific, will become the second largest by 2019 following China, he said.

Mobile phones, personal computers and tablets falling under the category of devices are expected to account for almost 33 percent of the overall IT spend in India, growing at 9.4 percent in 2016, Gartner said.

Gartner India’s research head Partha Iyengar said that in five years, one million new devices will come online every hour, and “these interconnections are creating billions of new relationships. These relationships are not driven solely by data, but algorithms”.

Highlighting the crucial nature of algorithms, Iyengar added, “Data is inherently dumb. It doesn’t actually do anything unless you know how to use it; how to act with it. Algorithms are where the real value lies. Algorithms define action. Dynamic algorithms are the core of new customer interactions.”

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The next great leap in machine to machine evolution in the Internet of Things (IoT) will be powered by the algorithmic economy, said Gartner in the statement.

“Organizations will be valued, not just on their big data, but the algorithms that turn that data into actions, and ultimately impact customers,” it added.

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Tags: IT, India, Information Technology, Internet of Things, IoT

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Indian IT Infrastructure Market to Reach $1.93 Billion in 2016: Gartner

Indian IT Infrastructure Market to Reach $1.93 Billion in 2016: Gartner

The Indian IT infrastructure market will increase marginally to $1.93 billion (roughly Rs. 12,807 crores) this year whereas by 2020, it is likely to grow to $2.13 billion (roughly Rs. 14,137 crores), Gartner said Tuesday.

The IT infrastructure market includes server, storage and enterprise networking equipment.

In 2015, the market stood at $1.90 billion (roughly Rs. 12,611 crores). “The Indian IT infrastructure market will total $1.9 billion in 2016, a 1 percent increase from 2015,” Gartner said.

Indian enterprises will continue to focus on optimising their infrastructure and operations budgets in 2016, it added.

“Optimisation is primarily driven with an objective to create next generation data center architecture that can support the ever increasing challenges of digital business. With the emergence of bimodal IT, there are a lot of investments made in Mode 1, and there is an increasing focus on building Mode 2 infrastructure,” Naveen Mishra, research director at Gartner said.

Gartner said Mode 1 workloads are witnessing investments in areas such as cloud, software defined storage and network coupled with integrated systems.

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“Public cloud is increasingly becoming relevant for data center managers and IT leaders in India,” it added.

Enterprise networking is the biggest segment within the Indian IT infrastructure market with revenue expected to total $848 million (roughly Rs. 5,628 crores) in 2016.

“This is an area where enterprises are focusing heavily in terms of their optimisation efforts and evaluating software driven networking, as this is becoming a barrier to a seamless digital experience,” Gartner said.

Mishra said with a revenue projection of $253 million (roughly Rs. 1,679 crores) in 2016, storage investment will witness a decline from last year primarily due to improved performance.

“Enterprises are increasingly investing in software defined storage, evaluating alternate, cheaper devices, such as flash storage, which is helping them to contain the ever increasing storage costs,” he added.

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Did Gartner get some aspects of Magic Quadrant analysis wrong?

Photo: Hindustan Times

Photo: Hindustan Times

Has Gartner Inc. got some aspects of its respected and influential Magic Quadrant analysis wrong?

Indeed, the research firm appears to have put out figures on the 2014 business analytics revenue of India’s top three technology firms that are far higher than actual numbers.

In its annual Gartner’s Magic Quadrant for Business Analytics report published on 22 September 2015, the technology research and advisory firm estimated 2014 (calendar year) business analytics revenue for Wipro Ltd at over $1 billion, Tata Consultancy Services (TCS) at $2.1 billion and Infosys Ltd at $950 million. Revenue is one of the many metrics Gartner analysts are believed to use before giving their opinion in trademarked Magic Quadrant reports. Considered the world’s most influential report for enterprise technology, the Magic Quadrant serves as an important filter for chief information officers at companies to shortlist technology vendors. Magic Quadrant reports evaluate technology firms in over 60 areas.

Wipro, which started declaring analytics revenue from April 2015, generated about $500 million in 2014, while for TCS and Infosys, the four areas comprising digital technologies—cloud computing, analytics, mobile and social platforms—together brought $2 billion and $700 million in revenue, respectively.

Gartner analysts have clubbed the three homegrown information technology (IT) firms among the 18 technology vendors evaluated, in the “Challengers” quadrant, as it ranked suppliers based on their “ability to execute” and “completeness of vision” and placed them in one of four quadrants: “Leaders”, “Challengers”, “Visionaries” or “Niche Players”.

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Since Gartner has overestimated analytics revenues, executives say it is unlikely any Indian firm will challenge these numbers. However, the discrepancy could become an embarrassment for Gartner Inc., which generated 73% of its total $2.16 billion annual revenue from research reports, which are subscribed by hundreds of thousands of enterprises and individuals across the world. It also questions the methodology of analysts at the Stamford, Connecticut-based Gartner for preparing these reports.

Gartner did not offer a comment on how it arrived at these numbers or the methodology deployed in preparing the report despite repeated requests.

Digital technologies is a fuzzy term. Most companies are coy about sharing actual revenue splits and even definitions. However, over the last 10 months, Indian technology companies have started sharing some insights on revenues from these technologies. “We do categorise digital what we call DIS differently, although even in digital, large percentage is maintenance. So I think everybody has a different definition for these terms. Our digital practice is about 8% of business,” Infosys chief executive Vishal Sikka said on 28 May 2015 at an analyst event sponsored by Cowen and Co., LLC. That suggests that Infosys generated $700 million business from cloud computing, analytics and social and mobile platforms for fiscal year ending 31 March 2015. In July last year, N. Chandrasekaran, chief executive officer of TCS, said that digital revenue was 12.5% of company’s $15.5 billion in revenue, implying about $2 billion in business, while a fortnight later, Wipro too for the first time declared revenues from analytics space.

“Gartner MQs (Magic Quadrants) are the most influential report in any sector,” said Richard Stiennon, a former vice-president at Gartner and currently running IT-Harvest, a US-based Internet security firm. “Buyers at large organizations use the MQ to scope the entire space and often shortlist the leaders. For a vendor to be in the Leaders Quadrant means instant recognition and an acceleration in deal opportunities.” Although Gartner did not share the methodology behind these reports, Stiennon and two other experts at homegrown IT firms said that Gartner analysis is based on a “questionnaire” sent to each of the technology vendors. However, Nasdaq-listed Cognizant Technology Solutions Corp. and Infosys toldMint that these revenue numbers are “Gartner’s estimates” as the companies do not share these numbers. TCS declined to comment if Gartner’s estimates are based on the company sharing its analytics revenue while Wipro said that it “publishes these numbers every quarter” and is “unable to comment on an external report”.

Since Gartner Magic Quadrant is highly influential and because it does not fully disclose its “opinion” when evaluating technology firms, the report has over the last few years faced criticism, from analysts to even technology firms. In 2014, NetScout Systems Inc., a US-based firm which helps companies better manage their IT networks, filed a lawsuit against Gartner, questioning how the research firm placed NetScout in one of the quadrants in Network Performance Monitoring and Diagnostics Magic Quadrant report. “When a company is publicly disclosing numbers, then it’s pretty pointless to do your own analysis and come with your own numbers,” said a CEO of another research firm, which competes with Gartner, referring to Wipro’s example. “So these kind of things obviously erodes or say dents the respect you have built and questions the whole model, based on which you write these reports.”

However, Stiennon said that it is tedious to get revenues from software sales, when compared to car sales, and as long as Gartner analysts maintain consistency in their reports, this should not be much of a challenge.

“Absolute revenue is not as important as changes in revenue. As long as the analysts are consistent in their methodology from year to year, there is value in their reported numbers regardless of the overall accuracy,” said Stiennon.

“Keep in mind that tracking software sales is much harder than say automobiles where there are multiple ways to check a vendor’s claims. You can poll dealerships, vehicle registration numbers, etc. A large vendor such as Wipro can decide what proportion of a bundled sale they will assign to BA (business analytics) for instance, even though they may have discounted that portion of the sale significantly. I have seen vendors report sales figure to Gartner based on “list” prices instead of actual prices for instance”.

[“Source-Livemint”]

Double-Digit Growth in Indian Smartphone Market to Continue: Gartner

Double-Digit Growth in Indian Smartphone Market to Continue: Gartner

While the global smartphone market is set to see a decline this year, India, buoyed by aggressive smartphone launches and a huge consumer base, is likely to witness double-digit growth in 2016 as well as in the next two years, says a new report.

According to information technology research and advisory company Gartner, sales of smartphones in India will reach 29 percent in 2016 and will continue to exhibit double-digit growth in the next two years while the sales in China and North America will be flat.

Gartner said global smartphone sales will, for the first time, exhibit single-digit growth in 2016 with global smartphone sales estimated to reach 1.5 billion units in 2016 a seven percent growth from 2015.

Worldwide combined shipments for devices (personal computers, tablets, ultramobiles and mobile phones) are expected to reach 2.4 billion units in 2016, a 0.6 percent increase from 2015 while the total mobile phone market is forecast to reach 1.9 billion units in 2016.

“The double-digit growth era for the global smartphone market has come to an end,” Ranjit Atwal, research director at Gartner, said in a statement.

“Historically, worsening economic conditions had negligible impact on smartphone sales and spend, but this is no longer the case. China and North America smartphone sales are on pace to be flat in 2016, exhibiting a 0.7 percent and 0.4 percent growth respectively,” Atwal added.

Gartner predicts that, through 2019, 150 million users will delay upgrades to smartphones in emerging Asia/Pacific, until the functionality and price combination of a low-cost smartphone becomes more desirable.

“Prices did not decline enough to drive upgrades from low-end feature phones to low-end smartphones,” said Annette Zimmermann, research director at Gartner. “Vendors were not able to reduce the price of a ‘good enough to use’ smartphone lower than $50.”

Although there will not be any significant increase in mobile growth in mature markets of North America, Western Europe, Japan and mature Asia/Pacific, Gartner analysts expect to see an extension of phone lifetimes among users.

“As carriers’ deals become more complex, users are likely to hold onto phones, especially as the technology updates become incremental rather than exponential,” Zimmermann added.

She noted that the volumes of users upgrading from basic phones to premium phones would slow with more basic phones being replaced with the same type of phone.

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Global Smartphone Market Growth to Be Lowest Ever in 2016 – Gartner

Global Smartphone Market Growth to Be Lowest Ever in 2016 - Gartner

Global smartphone sales are expected to grow in single digits in percentage terms for the first time ever and PC shipments are forecast to decline in 2016, according to research firm Gartner Inc.

Gartner said on Thursday it expected smartphone sales to grow only 7 percent to 1.5 billion units in 2016 from 2015, stunted by flat sales in the crucial China and North America markets.

“The double-digit growth era for the global smartphone market has come to an end,” Ranjit Atwal, research director, was quoted as saying in Gartner’s latest Devices Forecast findings.

The Stamford, Connecticut-headquartered firm said it expects worldwide shipments for PC’s to decrease 1.5 percent from 2015, before returning to growth in 2017.

While the global smartphone market is set to see a decline this year, India, buoyed by aggressive smartphone launches and a huge consumer base, is likely to witness double-digit growth in 2016 as well as in the next two years, says a new report.

According to information technology research and advisory company Gartner, sales of smartphones in India will reach 29 percent in 2016 and will continue to exhibit double-digit growth in the next two years while the sales in China and North America will be flat.

Gartner predicts that, through 2019, 150 million users will delay upgrades to smartphones in emerging Asia/Pacific, until the functionality and price combination of a low-cost smartphone becomes more desirable.

“Prices did not decline enough to drive upgrades from low-end feature phones to low-end smartphones,” said Annette Zimmermann, research director at Gartner. “Vendors were not able to reduce the price of a ‘good enough to use’ smartphone lower than $50.”

Although there will not be any significant increase in mobile growth in mature markets of North America, Western Europe, Japan and mature Asia/Pacific, Gartner analysts expect to see an extension of phone lifetimes among users.

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Tags: Android, Apple, Gartner, Mobiles, Smartphones
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