Sunday, November 27, 2022

The End-User Expenditure on IT Services in India Will Reach Almost $18 Billion in 2021

By Sudipta Choudhury - August 18, 2021 3 mins read

Gartner forecasts double-digit growth returns as IT services spending in India grows nearly 10.7% amid the pandemic era.

In the global rush towards a cloud-centric digital infrastructure, innovations around IT services are primarily driving the way for enterprises in India. As a result, the end-user spending on IT services in India to increase rapidly as we advance.

Basically, Indian enterprises were not ready for this widespread, large-scale remote work. However, advanced technologies help businesses with their deliverables with cost efficiency, the promise of scalability, and business resilience during the critical phase in 2020.

Also Read: Three Strategies for CIOs to Drive Innovation while Delivering Operational Excellence

A recent study by Gartner, titled “Forecast: IT Services, Worldwide, 2019-2025, 2Q21 Update” reveals that Indian end-user spending on IT solutions is on track to reach a total of $18 billion by the end of 2021. This is an increase of almost 10.7% from 2020.

Certainly, the Indian IT services marketplace has proven its persistence through the last 15-months of the crisis. Unsurprisingly, the pandemic has accelerated the IT migration and cloud adoption rate across different industry sectors.

In fact, many CIOs migrated from their legacy systems to public cloud services for seamless business operations to maintain overall continuity and resilience. And this sudden surge in remote working and increased focus around digitalization has increased the demand.

As explained by Arup Roy, research vice president at Gartner – “In 2020, spending on IT services slowed, but did not decline. While some digitalization projects were stalled due to IT budget contractions and economic uncertainties in 2020, 2021 is experiencing a renewed interest in rapid digitalization from end-user organizations.”

Market-wise, the consulting segment will be the largest with respect to end-user spending in 2021. It is anticipated to touch a total valuation of $4.6 billion this year – up from $4.1 billion YOY. Hardware support is the only division where the spending will decline in 2021.

It will decrease roughly 2.8% as end-user organizations reduce their expenditures on client device support as well as data center support systems. Even Indian companies are moving towards a cloud-only (or a cloud-first).

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This is leading the overall spending on infrastructure as a service (IaaS) with robust growth in 2021. At present, enterprises are demanding rapid innovation, improved agility, and a swift move to become a composable business resulting in the rising cloud adoption for 2021.

Furthermore, in 2021, the end-user spending on IaaS will touch a total of $1.6 billion – exceeding almost 57% of 2020 figures. It will be the highest registered growth rate within various segments of IT services spending in the Indian market.

While IaaS is most likely to contribute to approximately 9% of the total spending on IT services this year, the total expenditure on IaaS is anticipated to make up to 22.7% of the overall spending on IT services in India by 2025.

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Sudipta Choudhury

Marketing professional with experience in B2B and MR industry. Skilled in Marketing, Strategy Making, Copywriting and Content Creation, Sales, and SEO with excellent Communication Efficiency. Holding a dual master's degree focused on Marketing from IBS, Pune and ICFAI University.

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