IDC: ‘Disruption,’ hyper competition to drive AsiaPac IT market in 2007

By Melvin G. Calimag

Research firm IDC said in its annual "year ahead" forecast that the information and communications technology (ICT) spending and growth for the Asia Pacific (excluding Japan) region will be fueled largely by continued economic growth and increasing market demand across the region, with China and India predicted to have having another outstanding year.

IDC said the IT market in Asia Pacific excluding Japan (APEJ) will reach 2 billion in 2007, a 10 percent rate of growth over 2006.

Together, China and India will make up more than 43 percent of the region’s IT spend, with China remaining the largest IT market consisting 32 percent of the region’s IT spending and India growing at a remarkable 23 percent.

IDC said there will be three major areas of focus in 2007 in relation to the ICT market in the region:

• Innovative and useful services: With the wireless Internet experience becoming a reality for businesses and consumers, this will provide added impetus for companies to roll out mobility services to help us work and play.

• Standardization to simplify and reduce costs: Asian enterprises will simplify and adopt a service orientation in IT architectures by standardizing on components. System Integration vendors will look at reducing risk for project delivery by standardizing their service offerings.

• Smarter approaches to markets: Software vendors in APEJ are responding to the need for competitive offerings, particularly for Small and Medium-sized Businesses (SMB), as larger firms lag with practical and straightforward SMB offerings; Business Process Outsourcing (BPO) vendors are seeking to build longer term relationships with Asian firms, which have been slow to take advantage of the BPO phenomenon.

The following are the top 10 key IDC predictions that will shape the ICT industry in APEJ in 2007:

1. China and India continues to lead the pack as the next opportunity – emerging Asia – approaches Brazil Russia India and China (BRIC)-like growth rates.

2. Eastern heroes emerge such as UFSoft, Kingdee, Mincom, Ahnlab, and Rising will capture regional and global software markets.

3. Service oriented architecture (SOA) momentum gathers with new entry points, with nearly two thirds of mid-size and large corporate firms in APEJ committing to early stage SOA adoption in 2007.

4. Consulting and Systems Integration vendors refine delivery models to improve profitability.

5. BPO customers test drive before making long-term commitments.

6. Vendors chase the long tail in the SMB market, as 2007 will be marked by an aggressive focus from all major vendors to broaden and deepen their coverage of the SMB sector in the APEJ region.

7. Services get caught in the wireless mesh. After much hype, 2007 will finally be the year where wireless mesh services will emerge in Asia.

8. Fixed-Mobile-Convergence enables massmarket consumer mobility. IDC predicts that telecom network operators will begin initial deployments of fixed-mobile convergence (FMC) services in 2007.

9. The evolution of laptops take over both mature and emerging markets in Asia by storm.

10. Content is king as HDTV and IPTV emerge in Asia/Pacific.