Astudy by IDC India revealed that traditional large IT spenders like banking, financial services and telecom remain on top in terms of absolute spend. The Dataquest-IDC Mega Users survey, now in its fifth year, is the only independent survey that tracks the IT spending patterns among large enterprises from both primary and secondary sources.

The survey of 211 large IT user companies in India revealed that they spent 27 percent more on IT in 2007-08 as compared to 2006-07. During 2008-09, the survey expects these companies to invest 22 percent more on IT.

Telecom and BFSI comp­anies remained top IT spenders, with an average IT spend per company touching Rs 191.6 crore and Rs 87.5 crore, respectively in 2007-08. In the BFSI segment, LIC, NSDL, National Insurance, New India Insurance and Oriental Insurance also made large investments.

The new generation grocery stores from big corporate groups are banking on technology to compete in the low-margin, high-growth organized retail business. The IT investments in the retail sector grew the highest, at 43 percent. The retail industry is leading India Inc in terms of growth in average IT spend. The average IT spend for a retail player was Rs 7.4 crore.

“We did expect the retail sector to be a heavy investor in IT,” said Prasanto K Roy, Chief Editor, Dataquest. “But this young sector is also showing surprising maturity on the IT adoption curve. ”

The top spenders on IT from the telecom sector included Bharti, BSNL, Hutch, MTNL, Reliance Telecom and VSNL.

The IT and BPO companies form the next lot of big IT spenders and include Aricent, iGate, Infosys, ITC Infotech, Mastek, Mphasis, Sasken Communications, Wipro and Zensar.

The lower growth in IT investments is expected across all sectors in 2008-09 except the pharmaceuticals and biotech sector that is expected to invest about one-fifth more than their IT investments in 2007-08. The growth in investments in the utilities sector is expected to slow down from 30 percent in 2007-08 to 10 percent in the current year.

The highest IT spend as a percentage of overall revenues was reported by the BFSI sector that invested 1.5 percent compared to the overall industry average IT spend of 0.63 percent of the revenue. The utilities sector led in terms of IT spend per employee, with a budget of Rs 83,000 per employee, much above the overall industry average of Rs 36,000 per employee.

One of the significant findings is the change in spending pattern among Indian large IT users. Hardware, that accounted for 43 percent of the IT budget of these companies in 2007-08 will account for only 41.6 percent in 2008-09. The share of hardware will be picked up by services, which will account for 26.5 percent in 2008-09, as compared to 24.9 percent in 2007-08.

The survey expects the large IT spenders to invest the most on basic enterprise-wide IT infrastructure in the next two years. These would comprise enterprise resource manage­ment, virtual private network and wide area networks. This trend is expected from compa­nies expanding their operations at a rapid pace.

Customer relationship manage­ment and business specific applications will also see significant spend increase to handle growth in the consumer sector, and maturing of IT spending in BFSI and IT verticals.

The large spenders from among the oil and petroleum sector included Bharat Petroleum, GAIL, Hindustan Petroleum, Indian Oil and ONGC. The automobiles sector threw up Ashok Leyland, Maruti and Tata Motors in the list of 50 large IT spenders.

DQC NEWS BUREAU

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