IT Spending in India to Grow 6% in 2021: Gartner

Gartner’s latest forecast predicts India’s IT spending to a total of $81.9 billion in 2021, an increase of six percent from 2020. However, the IT spending in 2020 is expected to total $79.3 billion, which is 8.4 percent down 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 centre systems segments experienced the steepest decline, as spending dropped 26 percent and 1.2 percent respectively. However, CIOs in India continued to have a positive investment outlook. They continued to spend on enterprise software, IT services and communication services in 2020, and these segments are expected to grow seven percent, 3.7 percent and 4.9 percent respectively.

Gartner predicts that in 2021, IT spending growth will return as CIOs start positioning IT as not just a growth enabler but a survival necessary strategy. Enterprise software will achieve the highest growth of 13.6 percent followed by data centre systems at 8.3 percent whilst other segments too witnessing an increase in spending.

“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 Arup. “The success of these digital innovations has brought back the focus on investments in IT.”

The war of becoming a true digital business will continue in 2021. CIOs in India will direct their IT spending budgets towards accelerating digitization efforts with spending to increase on technologies like advanced analytical solutions, access management, encryption software, desktop-as-a-service, cloud and hyperautomation enabling system. RPA, AI, ML, and digital commerce will also witness increased spending.