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Asian companies lead IT spending


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Laptops on sale in Singapore. IT spending by Asian businesses is predicted to reach $208.7 billion in 2005.
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SINGAPORE -- Technology spending by Asian companies will top $200 billion in 2005 due to the expanding demands of the Chinese and Indian economies, research group Gartner predicted on Tuesday.

Gartner analysts reported that they expected the information technology market in Asia, excluding Japan, to increase by 7.6 percent to $208.7 billion next year.

That puts the Asian economy well ahead of Gartner's forecast for global spending, which it believes will increase by just 5.4 percent to reach $1.75 trillion.

Ian Bertram, Gartner's regional vice-president for software research, said that Indian business was taking advantage of the offshoring boom by leading the region in software spending. Demand for hardware also grew at the fastest rate in India.

"In India, it's the offshoring phenomenon that is driving increased infrastructure spending, as companies need viable infrastructure to support their businesses," said Gartner.

Across Asia, software spending increased by 12.4 percent to $5.6 billion, followed by a rise of 8.4 percent for IT services.

Telecommunications spending increased by 7.5 percent to $132.5 billion, and hardware spending grew by 6.3 percent to $36.9 billion.

The region remains one of the fastest growing markets for cell phones with up to 140 million people expected to subscribe to a mobile service during the year.

Bertram said that China continued to lead Asia in hardware spending with Chinese companies investing aggressively in technology to help them compete in the global market.

"It's the leapfrogging effect in China," said Bertram.

"As China starts to open its doors and compete on the global stage, companies have to change some of their business processes which have become quite archaic."


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