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.
Emerging technologies to get priority in China
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.
Dai added that while spending on hardware would dominate, growth would be flat, as cloud adoption was expected to further reduce the need for expenditure in this segment.
The use of IoT technologies, such as to support bike-sharing services and smart cars, also would significantly push the need for connectivity. The need to support such data-intensive digital services would see telcos as well as China's Ministry of Industry and Information Technology invest in network infrastructures, including 5G, fibre broadband, and IoT.
Such efforts would see telecommunications, computers and peripherals, and communications equipment remain as the top three categories in terms of overall spend this year, generating US$79 billion, US$63 billion, and US$49 billion, respectively.
Dai also pointed to tech outsourcing and consulting services as the fastest growing segment, as Chinese businesses looked to external help to deploy new services and differentiate their customer experience.
"They will seek help from tech outsourcing services focusing on digital operations and experience innovation, [as] this category will grow by 20 percent in 2018 while tech consulting services will grow by 13 percent," he said. The Forrester analyst added that services such as container management, hybrid cloud management, DevOps, automation, AI and digital process automation would be amongst the fastest growing segments.
In addition, spending in software would climb 13 percent in China, driven by growing adoption of cloud, AI, and IoT, as well as significant growth in the local e-commerce industry.
According to Forrester figures, 66 percent of tech and business decision makers in the country planned to improve the use of data and analytics, while 62 percent would increase their cloud adoption. Another 59 percent would use IoT to develop smart connected products and 58 percent would invest in AI and cognitive technologies.
Dai said: "Many traditional industries in China are modernising quickly by investing in emerging technologies. [For example], People's Insurance Company of China shifted its traditional virtual machine-based cloud platform to a container-based platform to address the challenges of e-commerce-related digital insurance.
"First Automobile Works Group used IoT to build a connected car platform and establish an automobile lifecycle service ecosystem. China Mobile adopted predictive analytics solutions to improve customer discovery for precise ad targeting," he added.