IT spending in India is projected to total $81.9 billion in 2021, an increase of 6% from 2020, according to the latest forecast by Gartner, Inc. IT spending in 2020 is expected to total $79.3 billion, down 8.4% from 2019. Analysts discussed the outlook for the Indian IT market during Gartner IT Symposium/Xpo India, which is taking place virtually.
“The COVID-19 pandemic stalled many digital transformation projects for Indian enterprises, mainly because of the market uncertainties and reduced cash flows,” said Arup Roy, research vice president at Gartner. “Organizations that were digitally sound in a pre-pandemic world could contain the impact on their business. The pandemic situation was a wake-up call for many organizations to relook and revive their IT strategies and increase their spending on IT in 2021.”
In 2020, the devices and data center systems segments experienced the steepest declines, as spending dropped 26% and 1.2%, respectively (see Table 1). Contrary to other markets where spending declined across all segments, CIOs in India continued to spend on enterprise software, IT services and communication services in 2020. These segments are expected to grow 7%, 3.7% and 4.9%, respectively.
Table 1. India IT Spending Forecast (Millions of U.S. Dollars)
|2019 Spending||2019 Growth (%)||2020 Spending||2020 Growth (%)||2021 Spending||2021 Growth (%)|
|Data Center Systems||3,738||4.8||3,475||-1.2||3,670||8.3|
Source: Gartner (November 2020)
In 2021, IT spending growth will return as CIOs start positioning IT as not just a growth enabler, but a ‘survival necessary’ strategy. While all segments will experience an increase in spending, the enterprise software segment will achieve the highest growth of 13.6%, followed by data center systems at 8.3%.
“The ‘Digital India’ mission will turn a new leaf in 2021 as enterprises across all sectors start spending more on IT. The pandemic provided an opportunity for Indian CIOs to test long-pending projects such as remote working, which delivered on-promise for many enterprises and helped them stay afloat in the most testing times,” said Mr. Roy. “The success of these digital innovations has brought back the focus on investments in IT.”
In 2021, the focus of IT spending will be in becoming a true digital business. CIOs in India will direct their IT spending budgets towards accelerating digitization efforts. Spending is expected to increase on technologies including advanced analytical solutions, access management, encryption software, desktop as a service, cloud, and hyperautomation enabling systems. IT solutions such as robotic process automation (RPA), artificial intelligence (AI), machine learning (ML), and digital commerce will also experience an increase in spending.