Indian IT spending stymied in 2022, expected to grow by 7.7 per cent

Ayushi Kar | | Updated on: Jul 15, 2022

Worldwide IT spending is projected to total $4.5 trillion in 2022, an increase of 3 per cent

Indian IT spending is expected to grow by 7.7 per cent in 2022, according to a report by Gartner on global IT spending. While the report notes that Indian enterprises are expected to maintain a robust growth rate despite the looming global economic uncertainty, the pinch of inflation has stymied growth as the growth rate for Indian enterprises on IT spending was 21.2 per cent for 2021.

Worldwide IT spending is projected to total $4.5 trillion in 2022, an increase of 3 per cent from 2021, according to the latest forecast by Gartner, Inc. In India, IT spending is projected to total $114.9 billion in 2022, growing 7.7 per cent from last year.

Spending to shrink

While IT spending is expected to grow in 2022, it will be at a much slower pace than in 2021 due to spending cutbacks on PCs, tablets and printers by consumers, causing spending on devices to shrink 5 per cent worldwide.

“Inflation is on top of the mind for everyone. Central banks around the world are focusing on fighting inflation, with overall inflation rates expected to be reduced through the end of 2023. However, the current levels of volatility being seen in both inflation and currency exchange rates is not expected to deter CIOs’ investment plans for 2022,” said John-David Lovelock, research vice president at Gartner. “Organizations that do not invest in the short term will likely fall behind in the medium term and risk not being around in the long term.”

Price increases and delivery uncertainty, exacerbated by the Russian invasion of Ukraine, have accelerated the transition in purchasing preference among CIOs, and enterprises in general, from ownership to service — pushing cloud spending to 18.4 per cent growth in 2021 and expected growth of 22.1 per cent in 2022. Not only is cloud service demand reshaping of the IT services industry, but it is also driving spending on servers to 16.6 per cent growth in 2022, as hyperscalers build out their data centres.

Gartner’s data comes at a time when Indian IT giants are closely eyeing the impact of inflation on their deal pipeline in the future. Tata Consultancy Services reported that they are not seeing any slowdown in IT spending as of yet, although they are monitoring the situation closely. L&T Infotech has also reiterated TCS’s concerns regarding the impact of inflation on its business and notes that they are keeping close contact with their customers.

Published on July 15, 2022
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