India IT spending expected to reach $88.8 billion in 2021: Gartner

Our Bureau Mumbai | Updated on January 25, 2021

India IT spending is expected to reach $88.8 billion in 2021, an increase of 6.8 per cent from 2020, according to the latest forecast by Gartner Inc.

India IT spending in 2020 was down 2.7 per cent “as CIOs prioritised spending on technology and services that were deemed mission-critical during the initial stages of the pandemic,” as per the report.

Worldwide IT spending is expected to amount to a total of $3.9 trillion in 2021, an increase of 6.2 per cent from 2020.

“In 2021, CIOs have to fast track their digital projects to get the necessary attention and funding from the board,” said Naveen Mishra, senior research director at Gartner. “Digital initiatives directly related with improving customer engagement and supported with a shorter ROI window will be prioritized in the current economic environment. Improving demand scenario across select verticals in India will spur the overall IT spending in 2021.”

All IT spending segments are expected to return to growth in 2021. Enterprise software is likely to witness the strongest rebound recording an 8.8 per cent growth as remote work environments are expanded and improved, the report said.

It will be followed by the devices segment which is projected to witness an 8 per cent growth in 2021 to reach $705.4 billion in IT spending.

Data Center Systems, IT Services and Communications Services are expected to grow 6.2, 6.0 and 4.5 per cent respectively.

“There are a combination of factors pushing the devices market higher,” said John-David Lovelock, distinguished research vice president at Gartner.

“As countries continue remote education through this year, there will be a demand for tablets and laptops for students. Likewise, enterprises are industrializing remote work for employees as quarantine measures keep employees at home and budget stabilization allows CIOs to reinvest in assets that were sweated in 2020,” he said.

Businesses will be forced to accelerate their digital transformation through 2024, by at least five years to survive in the post-pandemic word. This includes a permanently higher adoption of remote work and digital touchpoints, the report said.

Global IT spending related to remote work is expected to amount to $332.9 billion in 2021, an increase of 4.9 per cent from 2020.

“Digital business represents the dominant technology trend in late 2020 and early 2021 with areas such as cloud computing, core business applications, security and customer experience at the forefront. Optimization initiatives, such as hyperautomation, will continue and the focus of these projects will remain on returning cash and eliminating work from processes, not just tasks,” said Lovelock.

Covid-19 will continue to require interventions from the government through 2021, despite the availability of vaccines. This will impact the recovery of the sector along with other geopolitical factors such as Brexit and the US-China tension.

“Overall, returning global recovery back to 2019 spending rates will not occur until 2022, although many countries may recover earlier,” Gartner said.

“Greater levels of digitalization of internal processes, supply chain, customer and partner interactions, and service delivery is coming in 2021, enabling IT to transition from supporting the business to being the business. The biggest change this year will be how IT is financed; not necessarily how much IT is financed,” said Lovelock.

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Published on January 25, 2021
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