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APAC to spend US$154B on IT

Asia-Pacific region will increase its overall ICT expenditure by 10 percent in 2008, with government and green IT initiatives driving some of the momentum.
Written by Eileen Yu, Senior Contributing Editor

The Asia-Pacific region will fork out US$154 billion in ICT (information and communications technology) expenditure next year, with the world's two most populous countries--China and India--leading the charge.

Research firm IDC this week unveiled its key predictions for 2008, including forecasts that government spending and green IT initiatives will fuel some of the momentum.

"Government spending will accelerate due to digital inclusion and new digital demands from a more savvy population," Graeme Muller, head of Asia-Pacific Predictions Committee at IDC, said in a statement. "While governments will typically lead digital inclusion efforts, strong participation from ICT vendors is expected as part of their corporate social responsibility programs."

Often used to describe efforts in narrowing the digital divide, digital inclusion seeks to make ICT services affordable and accessible to communities that are socially or economically challenged.

IDC said it expects to see a host of projects involving combined efforts from the public and private sectors to address the digital divide. "2008 is expected to be the year where governments lead the way in deploying technologies to extend connectivity, and build toward a society of digital inclusion," the analyst said.

IDC estimates the Asia-Pacific region, excluding Japan, will increase their ICT spending to US$154 billion in 2008, a 10 percent growth over last year. China and India will account for almost half of total expenditure, with India registering the fastest growth worldwide in terms of overall IT spending.

In particular, an increasing number of small and midsize businesses (SMBs) in both countries will acquire more IT products and services. IDC noted that IT vendors must then tweak their existing sales model to cater specifically to this market segment, where customers may have "drastically different" business operations from larger companies.

The research house also believes business intelligence (BI) software is increasingly packaged and marketed as part of a larger product suite that can better address customer needs. Coining this trend intelligent process automation (IPA), IDC said 2007 was marked by several major acquisitions in the BI space, where these companies were snapped up by large software vendors that did not specialize in BI.

"These disruptions will alter the competitive landscape and affect the positioning and go-to-market strategies in 2008, as new segments appear from these new delivery models," IDC said.

The research firm also predicted that growing concerns about global warming will shift Asia's focus toward green IT and eco-friendly technologies. Expecting the "greenness" of ICT vendors to be an important component of a customer's purchasing decision, IDC said: "It is not surprising that while corporate social responsibility is an important reason for companies to adopt green IT, the underlying motivation is that of cost savings."

IT vendors, it added, will be challenged to demonstrate a business case for adopting, as well as sustaining a green IT strategy.

IDC's other predictions for 2008 include:

  • Increased adoption of enterprise collaboration. The desire for enhanced collaboration and effective communication will drive the adoption of unified communications amongst Asian companies. IDC believes unified communications and Web 2.0 tools will gain significant traction in the enterprise space next year.
  • Apple iPhone drives demand for multimedia phones. The expected introduction of iPhone in Asia next year, alongside new devices from handset makers such as Nokia and RIM, will stimulate the multimedia and converged devices market. Various new access capabilities, including downloading content over-the-air and peer-to-peer mechanisms, will also find their way into mobile devices in 2008.
  • WiMax versus HSDPA. Demand for wireless broadband access will fuel a fiery and complex competition for market share amongst carriers and service providers, and a battlefield between HSDPA and WiMax.

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