The information and communications technology (ICT) market in the Asia-Pacific region excluding Japan will reach US$154 billion in 2008, up 10% over 2007, with China and India together contributing about half of the spending, according to a prediction by ICD, a global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer electronics markets.

India is expected to experience the fastest growth of all countries in IT spending in 2008, according to ICD.

Graeme Muller, head of the ICD Asia/Pacific predictions committee, said that government spending would accelerate due to digital inclusion (expansion of the capabilities of computing technology to better address the social and economic challenges of underserved communities, both rural and urban) and new digital demands from a more educated population. "While governments will typically lead digital inclusion efforts," Muller commented, "strong participation from ICT vendors is expected as part of their corporate social responsibility programs."

IDC made 10 predictions about factors that will shape the ICT industry in the region in 2008:

1. Double-digit growth in China and India will drive the regional ICT market.

The rate of GDP growth is predicted to reach between 9% and 10% in both China and India in 2008, and the small and medium-sized business (SMB) sectors in the two countries will increasingly adopt IT solutions as a strategic business differentiator. Vendors will need to adjust their existing models to cater to this group of customers, whose business operations may be drastically different from those of their larger competitors.

2. Product vendors will tap into the profitable end of their services business.

With shrinking margins for hardware products and consistent growth in the IT services market, vendors are using their services business to enter new segments. End-user demand for IT services is a key driver of this phenomenon, since end users are more willing to pay for higher-value premium services directly as their IT environments become more complex.

3. The business intelligence market will be shaken by consolidation and convergence.

The business intelligence (BI) software market was characterized by big acquisitions in 2007, notably by large software vendors with non-BI backgrounds. These "disruptions" will alter the competitive landscape and affect positioning and marketing strategies in 2008. In addition, BI is increasingly being packaged and sold as part of larger solutions, and this accelerates the evolution of what IDC calls "intelligent process automation" (IPA). While consolidation and convergence will add some downward pricing pressures, IDC expects the overall BI market in the region to continue growing in 2008.

4. The uptake of enterprise collaboration in the digital marketplace will accelerate.

As the gap between personal and business communications narrows, there is an emerging focus on Web 2.0 and unified communications (UC) solutions for enterprises. The need for constant presence and enhanced collaboration for more effective communications and workflows will be the key factors driving the adoption of UC applications in the workplace-which is now giving way to the virtual workplace, where UC and Web 2.0 provide needed tools. These services, IDC believes, will truly gain traction in 2008.

5. Green IT will emerge in the Asia-Pacific region.

The increasing concern over global warming and climate change has turned attention to green technologies and environmental protection in the ICT industry. It is not surprising, IDC notes, that while corporate social responsibility is one important motivation for the adoption of green IT, the fundamental motivation is cost saving. The challenge for vendors is to demonstrate the business case for green IT to end users while maintaining a "green" supply chain. The "greenness" of IT vendors, IDC believes, will become more important as a purchasing criterion for end users.

6. The iPhone will drive demand for multimedia phones.

The converged devices market is expected to become more competitive in 2008, with Apple`s iPhone and products from other suppliers such as Nokia and RIM further stimulating demand and driving the multimedia phone market. A variety of new access capabilities will find their way into mobile phones, further encouraging the downloading of music content and supporting peer-to-peer mechanisms. IDC predicts that this new "disruptive" force will boost the already hot market to new levels of segmentation and growth, and drive demand for multimedia devices.

7. HSDPA and WiMAX will contend for wireless broadband supremacy.

The growing demand for wireless broadband access, both fixed and mobile, will result in fierce competition for market share by carriers and providers. IDC expects a battle between High Speed Downlink Packet Access (HSDPA) and Worldwide Interoprability for Microwave Access (WiMAX).



8. ITSM and ITILv3 will drive the convergence of business and IT consulting.

End users will seek IT engagements that are more "business-outcome" oriented so as to assure greater efficiency and agility for their products. Vendors will be expected to deliver products in accordance with IT Service Management (ITSM) and the latest version of ITILv3, which specifies IT strategy within the organization. IDC believes that it will be crucial for vendors wishing to serve as strategic advisors to their clients to be able to provide a mix of IT and business consulting.

9. ICT markets in emerging Asian countries will continue to grow despite political risk.

Combined IT spending in the Association of Southeast Asian Nations (ASEAN) ICT market will exceed even that of India, making ASEAN an important area for ICT investment in 2008 and beyond. For emerging South Asian markets (Bangladesh, Pakistan, and Sri Lanka), 2008 looks promising as government initiatives aimed at improving the IT infrastructure improve the business environment and attract foreign investment. ICT development in this region is expected to accelerate.

10. Government digital inclusion will drive public-sector IT spending.

There will be a proliferation of projects that combine the efforts and resources of public, private, and civil-society stakeholders in addressing the digital divide. With strong political will and available funding, governments are expected to lead the way in 2008 in deploying technologies that extend connectivity and build toward a society of digital inclusion.
(by Quincy Liang)