IT spending in India is projected to rise 6 per cent to $81.9 billion in 2021 compared to this year on the back of growth across segments like enterprise software and IT services, research firm Gartner said on Monday.
IT spending in 2020 is expected to total $79.3 billion, down 8.4 per cent from 2019.
“The COVID-19 pandemic stalled many digital transformation projects for Indian enterprises, mainly because of the market uncertainties and reduced cash flows," Gartner research vice president Arup Roy said.
He added that organizations that were digitally sound in a pre-pandemic world could contain the impact on their businesses.
"The pandemic situation was a wake-up call for many organizations to relook and revive their IT strategies and increase their spending on IT in 2021," he said.
In 2020, the devices and data centre systems segments experienced the steepest declines, and spending is estimated to have dropped 26 per cent and 1.2 per cent, respectively.
Spending on enterprise software, IT services and communication services is estimated to have continued to grow at 7 per cent, 3.7 per cent, and 4.9 per cent, respectively, in 2020 over the previous year.
In 2021, Gartner said IT spending growth will return as CIOs (chief information officers) start positioning IT as not just a growth enabler, but a 'survival necessary' strategy.
While all segments will experience an increase in spending, the enterprise software segment will achieve the highest growth of 13.6 per cent, followed by data centre systems at 8.3 per cent, it added.
"The 'Digital India' mission will turn a new leaf in 2021 as enterprises across all sectors start spending more on IT.
“The pandemic provided an opportunity for Indian CIOs to test long-pending projects such as remote working, which delivered on-promise for many enterprises and helped them stay afloat in the most testing times," Roy said.
The success of these digital innovations has brought back the focus on investments in IT, he added.
Roy said the pandemic situation forced organizations to switch to work- from-home.
"Those organisations that were heavily reliant on office based, desk-tied work had to switch to remote work set up – enabled either through using desktops or laptops facilitated at home.
“Now, it also means that one has to also port your infrastructure and applications so that it facilitates web-based access and/or hosted applications that can be accessed using internet on the web/application/mobile platforms," he added.
It is not just restricted to one's work specific applications but also transcends to collaboration platforms because the whole element of in-person interactivity now needs to be enabled on the virtual platform using digital collaboration solutions, he said.
"Of course, not to forget the security, governance and policy administration that needs to be tweaked to facilitate and safe and secure delivery from remote set up," Roy futher added.
In 2021, the focus of IT spending will be in becoming a true digital business. CIOs in India will direct their IT spending budgets towards accelerating digitisation efforts.
Spending is expected to increase on technologies including advanced analytical solutions, access management, encryption software, desktop as a service, cloud, and hyper automation enabling systems.
IT solutions such as robotic process automation (RPA), artificial intelligence (AI), machine learning (ML), and digital commerce will also experience an increase in spending, Gartner said.