Highlights

• The average IT spending in 2007-08 grew by 27% with retail leading at 43% owing to the entry of new players and scaling up by the established players from backend to advanced application software
• The year 2007-08 saw 43% of the total IT budget going to hardware. This is expected to come down to 41.6% in 2008-09, owing to price reduction and market commoditization.
• With a growing majority of Indian enterprises taking to outsourcing like never before, the services market is expected to go up from 24.9% in 2007-08 to 26.5% in 2008-09
• Traditional verticals like BFSI, ITeS and Oil & Petrochemicals continue to remain the highest spenders on technology

As the CTO of Shoppers Stop, one of Indias leading retail chains, Arun Gupta has many things to take care of. The last year has been especially busy for him, what with the company undergoing logo and branding transformations, and, more importantly, being a part of the great Indian retail boomthat has been such a crucial feature of the Indian corporate scenario.

Its not just the Shoppers Stops and Pantaloons, the direct or indirect entries of the likes of Walmarts or Tescos promise to transform the Indian retail scene once and forever. The unorganized Indian retail market is graduating from the mom-and-pop neighborhood kirana stores to the swanky, state-of-the-art hypermarkets and neon-lit shopping malls. The customer is the king here, and delivering superior shopping experience is the only way to capture the market. And like any other industry observer would tell, technology is the key differentiator driving the retail revolution in India.

While the retail boom has resulted in swankier malls and supermarkets, it has also recorded the highest growth in IT spend (43%) in the current year amongst all verticals, according to the Dataquest-IDC Mega Users Survey 2008.While this years survey does confirm the importance of IT in retail, it also throws up other interesting nuggets on how various sectors across India Inc are faring in terms of IT adoption. Traditional spenders like BFSI, IT/ITeS and Oil & Petrochemical though have spent the most, the percentage growth in the use of IT is maximum in retail.

There is no denying the fact that India is on a growth curve with technology playing a key role in its business success. More and more Indian enterprises are witnessing a growing automation trend leading to more sophisticated usage of IT but, more importantly, this has resulted in increased IT spending across verticals. Even though the companies have been somewhat apprehensive when it comes to disclosing their IT spends, the DQ-IDC Mega Users Survey has tried to do the job well over the years.

This year too was no exception, though we needed to work within the limitation where most of the telecom behemoths stayed away from the survey.

Based on the feedback of the participating companies as well as some readers, we have decided to change the nomenclature from Mega Spenders to Mega Users. In this era of proactive cost cutting, one of the apprehensions of the participating companies was to be tagged as a Mega Spender. Therefore, from this year onward the survey would be known as Mega Users Survey.

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