India IT spending is expected to total $92.7 billion in 2021, growing 8 per cent from 2020, according to the forecast by Gartner, Inc. Worldwide IT spending is projected to total $4.2 trillion in 2021, an increase of 8.6 per cent from 2020.

Commenting on the development, John-David Lovelock, research vice president, Gartner, said, “Technology spending is entering a new build budget phase. CIOs are looking for partners who can think past the digital sprints of 2020 and be more intentional in their digital transformation efforts in 2021. This means building technologies and services that don’t yet exist, and further differentiating their organization in an already crowded market.”

As many companies still suffer revenue declines, IT spending is accelerating ahead of revenue expectations. Boards and CEOs are much more willing to invest in technology that has a clear tie to business outcomes, and less so for everything else. For example, the IT services segment is among the top three highest growth areas for 2021 primarily due to a boost in infrastructure-as-a-service spending that supports mission critical workloads and avoids high on-premises costs. The IT services segment is forecast to total $1.2 trillion in 2021, an increase of 9.8 per cent from 2020

Table 1. Worldwide IT Spending Forecast (Millions of U.S. Dollars)

2020 Spending 2020 Growth (%)   2021 Spending 2021 Growth (%)   2022 Spending 2022 Growth (%)  
Data Center Systems 178,466 2.5 191,648 7.4 201,659 5.2
Enterprise Software 529,028 9.1 598,957 13.2 669,114 11.7
Devices 696,990 -1.5 793,973 13.9 800,172 0.8
IT Services 1,071,281 1.7 1,176,676 9.8 1,277,228 8.5
Communications Services 1,396,287 -1.4 1,444,980 3.5 1,481,878 2.6
Overall IT 3,872,052 0.9 4,206,234 8.6 4,430,051 5.3

Source: Gartner (July 2021)

Commenting on the development, Naveen Mishra, senior research director at Gartner, said, “The second wave of the pandemic and associated lockdowns have brought a significant sluggishness during most of the second quarter of 2021. However, demand is witnessing a rapid recovery across majority of the sectors. Pharma, healthcare, financial services, education, online retail and government continue to invest in their digital transformation journey.” In 2021, Indian organizations including SME’s, will be better positioned to invest more into IT, through the next two quarters. All segments of IT spending are projected to grow in 2021, in India. End-user spending is forecasted to spend the highest on devices in 2021, after a 5.9 per cent decline in 2020.

 

Table 2. India IT Spending Forecast (Millions of U.S. Dollars)

2020 Spending 2020 Growth (%)   2021 Spending 2021 Growth (%)   2022 Spending 2022 Growth (%)  
Data Center Systems                 2,616 -11.4                 2,706 3.4                 2,768 2.3
Enterprise Software                 7,884 17                 9,218 16.9               10,518 14.1
Devices               36,014 -5.9               38,747 7.6               41,135 6.2
IT Services               16,352 3               18,103 10.7               19,725 9
Communications Services               22,999 10.9               23,979 4.3               24,498 2.2

Overall IT

              85,865 1.5               92,753 8               98,645 6.4

Source: Gartner (July 2021)

“Digital transformation can no longer be purchased overnight, and global IT spending projections reflect that,” Lovelock said. “As the world continues to open back up, enterprises will invest in tools that support innovation, anywhere operations and employee productivity and trust”, he added.