INDUSTRIESIT/ITES/BPO/KPO

Gartner says IT Spending in India to Decline by 8.4%; forecasts 6% Growth in 2021

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.

“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
Enterprise Software 6,647 17.1 6,693 7.0 7,415 13.6
Devices 38,279 15.5 26,460 -26.5 26,780 3.8
IT Services 15,410 12.6 15,043 3.7 15,838 8.0
Communications Services 27,943 1.0 27,592 4.9 28,193 4.8
Overall IT 92,017 9.9 79,263 -8.4 81,896 6.0
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 hyper-automation 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.

More detailed analysis on the outlook for global IT spending is available in the Gartner webinar ‘IT Spending Forecast, 3Q20: Technology Trends Accelerated by COVID.”

Forecast Methodology

Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.

The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across the hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast research is available to Gartner clients in “Gartner Market Databook, 3Q20 Update.” This quarterly IT spending forecast page includes links to the latest IT spending reports, webinars, blog posts and press releases.

Analysts discussed the outlook for the Indian IT market during Gartner IT Symposium/Xpo India, which is taking place virtually through Wednesday (25 November).

Brian Pereira

Brian Pereira is an Indian journalist and editor based in Mumbai. He is Editor-in-Chief of Digital Creed, which he founded in 2015. A technology buff, former computer instructor, and software developer, Brian has 27 years of journalism experience (since 1994). He is sound and confident about his knowledge of business technology concepts. And he is a believer in continual education/learning. Brian is the former Editor of CHIP and InformationWeek magazines (India). He has written hundreds of technology articles for India's leading newspaper groups such as The Times of India and Indian Express Newspapers (among others). And he has conducted more than 300 industry interviews during his journalism career. Brian also writes on Aviation, cybersecurity, startups, and topics directed at small and medium businesses. He achieved certifications from the EC-Council (Certified Secure Computer User) and from IBM (Basics of Cloud Computing). Apart from those, he has successfully completed many courses on Content Marketing and Business Writing. Follow Brian on Twitter (@creed_digital) and LinkedIn.

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