Investments in IT continue despite a sinking economy

The world's largest chipmaker Intel on Wednesday released a processor that it said would suit new generation services, supercomputing and cloud-based services in particular. It claimed the Xeon Processor E5-2600 v2 is upto "45 per cent more energy efficient and delivers upto 50 per cent more on performance parameters compared to the previous generation" of processors.

Sounds good, but will Indian companies be investing in new chips and servers at a time when the Indian economy is in tatters?

The answer is yes. No doubt, some have cut their budgets. The IT budgets at Reliance Entertainment-Digital, for instance, is down 25 per cent compared to last year, according to Sayed Peerzade, the company's Vice President of Technology.

But that does not reflect technology spending across all enterprises. There are still pockets of growth. While the sale of personal computers remains a challenge, the data centre market, IT services and software segments are still growing.

An IDC report for the first quarter of 2013 pegged the overall server market's growth in India at 10 per cent year-on-year. A large number of deals, it said, were being driven by various government projects and large corporate investments. A data centre is made of servers, storage and network.  

Gartner in August said Indian banking and securities companies will spend around Rs 417 billion on IT products and services, including data center technologies, in 2013, an increase of more than 13 per cent over 2012.

Indian companies have not capped data centre investments because they are preparing for the future. There are a few mega trends that will help companies reduce overall operational costs, in the near future. Cloud is one of them.

"Companies are transitioning to cloud technologies. There is also a growing demand in the market. The SME (Small and Medium Enterprises) companies that so long used personal computers as servers are now looking at more robust hardware," Jaideep Mehta, Country Manager of IDC India told Business Today."

The National Stock Exchange of India Limited (NSE), for instance, is carefully scrutinising all its costs but has not reduced technology spending, Chief of Special Projects at the company N. Muralidaran said. It is banking on technology innovations such as cloud platforms and energy-efficient hardware to reduce costs, scale, speed up its portfolio processing as well as execute risk computations faster.

India's economy may be sinking but Intel and its data center partners can breathe easy.