Rise in growth rate due to digital transformation initiatives among enterprises
Bengaluru, April 28 The Indian domestic IT & Business Services market was valued at $14.15 Billion and recorded a 7.2% year-over-year (YoY) growth as compared to 5.3 per cent in 2020, according to the International Data Corporation’s (IDC). The increase in growth rate is due to rise in digital transformation initiatives among enterprises in the country.
“The surge in digital transformation initiatives among Indian enterprises continued in 2021 as enterprises continued to increase their IT investments to improve the resiliency and efficiency of their business operations and enhance customer experience,” said Harish Krishnakumar, Senior Market Analyst, IT Services, IDC India.
Priority investment areas
Pointing out that cloud, AI/ML, and security continue to be priority investment areas, the analyst added that businesses also increased their investments in workplace transformation projects due to adoption of hybrid work models. “With the economy gradually recovering from the impact of the Covid-19 pandemic, there will be an increase in IT services spending in the upcoming years due to the pent-up demand caused due to the pandemic and also due to rising discretionary IT spending in certain industries,” said anayst Harish Krishnakumar .
Of the IT & Business Services market, the IT services market contributed 77.6 per cent and grew by 7.9 per cent in 2021 compared to the 5.8 per cent growth in 2020. Further, as per IDC, the IT & Business Services market is expected to witness robust growth in the upcoming years as enterprises continue to invest in areas such as cloud, AI/ML, security and application modernisation. The IT & Business Services market is projected to grow at a CAGR of 8.9 per cent between 2021-26 and reach $ 21.67 billion by the end of 2026.