India IT spending to grow 8% in 2021: Gartner

Technology spending enters a new build budget phase

India IT spending to grow 8% in 2021: Gartner - CIO&Leader

India IT spending is expected to total USD 92.7 billion in 2021, growing 8% from 2020, according to Gartner. Worldwide IT spending is projected to total USD 4.2 trillion in 2021, an increase of 8.6% from 2020. 

“Technology spending is entering a new build budget phase,” said John-David Lovelock, distinguished research vice president at Gartner. “CIOs are looking for partners who can think past the digital sprints of 2020 and be more intentional in their digital transformation efforts in 2021. This means building technologies and services that don’t yet exist, and further differentiating their organization in an already crowded market.”

As many companies still suffer revenue declines, IT spending is accelerating ahead of revenue expectations. Boards and CEOs are much more willing to invest in technology that has a clear tie to business outcomes, and less so for everything else. For example, the IT services segment is among the top three highest growth areas for 2021 primarily due to a boost in infrastructure-as-a-service spending that supports mission critical workloads and avoids high on-premises costs. The IT services segment is forecast to total USD 1.2 trillion in 2021, an increase of 9.8% from 2020 (see Table 1).

Table 1: Worldwide IT Spending Forecast (Millions of U.S. Dollars)

 

 

2020 Spending

 

2020 Growth (%)  

 

2021 Spending

 

2021 Growth (%)  

 

2022 Spending

 

2022 Growth (%)  

 

Data Center Systems

 

178,466

 

2.5

 

191,648

 

7.4

 

201,659

 

5.2

 

Enterprise Software

 

529,028

 

9.1

 

598,957

 

13.2

 

669,114

 

11.7

 

Devices

 

696,990

 

-1.5

 

793,973

 

13.9

 

800,172

 

0.8

 

IT Services

 

1,071,281

 

1.7

 

1,176,676

 

9.8

 

1,277,228

 

8.5

 

Communications Services

 

1,396,287

 

-1.4

 

1,444,980

 

3.5

 

1,481,878

 

2.6

 

Overall IT

 

3,872,052

 

0.9

 

4,206,234

 

8.6

 

4,430,051

 

5.3

 

Source: Gartner (July 2021)

“The second wave of the pandemic and associated lockdowns have brought a significant sluggishness during most of the second quarter of 2021. However, demand is witnessing a rapid recovery across majority of the sectors,” said Naveen Mishra, senior research director at Gartner. “Pharma, healthcare, financial services, education, online retail and government continue to invest in their digital transformation journey.” In 2021, Indian organizations including SME’s, will be better positioned to invest more into IT, through the next two quarters. All segments of IT spending are projected to grow in 2021, in India. End user spending are forecasted to spend the highest on devices in 2021 (see Table 2), after a 5.9% decline in 2020.

Table 2: India IT Spending Forecast (Millions of U.S. Dollars)

 

 

2020 Spending

 

2020 Growth (%)  

 

2021 Spending

 

2021 Growth (%)  

 

2022 Spending

 

2022 Growth (%)  

 

Data Center Systems

 

                2,616

 

-11.4

 

                2,706

 

3.4

 

                2,768

 

2.3

 

Enterprise Software

 

                7,884

 

17

 

                9,218

 

16.9

 

              10,518

 

14.1

 

Devices

 

              36,014

 

-5.9

 

              38,747

 

7.6

 

              41,135

 

6.2

 

IT Services

 

              16,352

 

3

 

              18,103

 

10.7

 

              19,725

 

9

 

Communications Services

 

              22,999

 

10.9

 

              23,979

 

4.3

 

              24,498

 

2.2

 

Overall IT

 

              85,865

 

1.5

 

              92,753

 

8

 

              98,645

 

6.4

 

Source: Gartner (July 2021)

“Digital transformation can no longer be purchased overnight, and global IT spending projections reflect that,” said Lovelock. “As the world continues to open back up, enterprises will invest in tools that support innovation, anywhere operations and employee productivity and trust.”


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