"A major wave of IT investments has started to take place across banks, financial services institutions, telecom, manufacturing, government, resources, education and other industries," IDC said in its report on "India Domestic IT market Top 10 Predictions for 2007." "This is probably why India is the fastest-growing country by IT spending in 2006 at 22.4 per cent and is forecast to remain so in 2007 at 21.5 per cent when it reaches Rs 75.891bn," it said.

In 2007, Indian enterprises would graduate to the second level of 'Dynamic IT infrastructure', where IT infrastructure would be able to effect changes in response to the changing business scenario, it said.

The key technology components that would come to the fore to attain this state would be virtualization, SOA and application integration.

This year will mark the beginning of an aggressive focus from all major vendors to broaden and deepen their coverage of the SMB sector. Vendors will experiment with new models like On-premise hosted applications, hardware on lease and Software as a Service (SaaS).