On-Premises IT Infrastructure Spending in India to Hit $2.2B This Year

By: Jacqueline Lee| - Leave a comment

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Last week, at Gartner’s IT Infrastructure Operations and Data Center Summit in Mumbai, analysts predicted that IT infrastructure spending in India would reach $2.2 billion by the end of this year — a 1.5 percent increase from 2016.

The employee demand for a digital workplace is also driving infrastructure spending growth. CNN Money predicts that by 2020, India will have 900 million working-age residents. By 2022, its population will surpass that of China, with an average age of 29 years old. This shift will force employers to adapt to an influx of digital natives in the workplace.

Goldman Sachs sees the growth of enterprises in India, thanks to economies of scale and IT infrastructure investments, as a key driver that will help generate growth in the Indian middle class. Employees in these workplaces can achieve greater productivity and therefore higher income. However, only 5 percent of the population currently works in businesses like these.

Infrastructure Spending Grows While Costs Drop

Single-digit growth in infrastructure spending doesn’t initially seem worthy of attention, but the story changes when you understand that Gartner’s figures cover on-premises, discrete systems. They don’t include spending on cloud infrastructure, integrated systems and hyperconverged architecture, as BW CIO points out.

Lack of in-house operations skills and a desire to cut costs have driven significant growth in cloud infrastructure spending. According to BW CIO, Amazon Web Services has grown its customer base by half over the last year, driven by a need for cloud-based storage and the infrastructure needed to host workloads.

“We are in the second phase of public cloud in India,” Naveen Mishra, research director at Gartner, told the news source. “In moving to the cloud, enterprises can focus more on business projects rather than IT. In some instances, there are cost savings. It is really about resource optimization.”

Integrated and hyperconverged systems are driving down IT infrastructure costs — which explains the slow growth in spending, even though investments continue at a rapid pace.

“It’s not that people are not buying infrastructure; they are looking at ways of optimizing costs,” Mishra explains, according to BW CIO. “They ask, ‘How do we invest in technology to save money?'”

Investments Growing Outside the Enterprise

As spending on Internet of Things devices and the IT resources to support them increases, infrastructure spending will also increase outside the enterprise. Last summer, Gartner predicted broadband spending in India would hit $7 billion by the end of 2016.

Mobile device usage in India alongside a push toward mobile banking also contribute to investments in cellular infrastructure. According to TelecomLead, 3G networks are expected to cover 90 percent of India by 2021, with 4G LTE coverage increasing to 45 percent.

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About The Author

Jacqueline Lee

Freelance Writer

Jacqueline Lee specializes in business and technology writing, drawing on over 10 years of experience in business, management and entrepreneurship. Currently, she blogs for HireVue and IBM, and her work on behalf of client brands has appeared in Huffington Post, Forbes, Entrepreneur and Inc. Magazine. In addition to writing, Jackie works as a social media manager and freelance editor. She's a member of the American Copy Editors Society and is completing a certificate in editing from the Poynter Institute.

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