Although the market is expected to grow 8.3% in 2021, the growth will be slower than the 14% growth it experienced in 2019
Enterprise application software vendor revenue in India is forecast to decline 1.3% in 2020 and total USD 2.58 billion, according to Gartner. Although the market is expected to grow 8.3% in 2021, the growth will be slower than the 14% growth it experienced in 2019.
Globally, enterprise application software revenue will decline 2.2% in 2020, to total USD 237 billion. In India, all enterprise applications software markets will shrink in 2020 except the content services and customer experience and relationship management (CRM) markets.
“Spending on enterprise applications software is expected to shrink in 2020 due to recession caused by COVID-19 across industries,” says Neha Gupta, research director at Gartner. “The large decline in enterprise applications software spending is also due to some companies going out of business, in addition to reduced workforce across industries, especially in transportation, manufacturing and natural resource industries.”
In 2020, CRM software revenue will grow 2.5%, followed by content services revenue which will increase 0.8%. (See Table) Analytics and business intelligence software revenue will be the worst hit in India in 2020, as it will decline 3.9%. Email and authoring software revenue, which experienced the highest growth in 2019 (27.5%), will decline 1.2% in 2020.
Enterprise Application Software Revenue Forecast, India, 2019-2021 (Millions of U.S. Dollars)
Source: Gartner (October 2020)
“We expect the market to start recovering by 2021, although the growth will be muted as organizations will observe prudence. Organizations will continue to put new long-term projects on hold and cut the scope of high-cost projects through 2020,” says Gupta.
Gartner expects the revenue growth to come from enterprises’ demand for “quick win” projects that have shorter return on investment or those which help them become more competitive. For example, spending on digital commerce platforms will increase next year as the demand for cashless payments increases, which will boost the CRM software revenue.