Gartner, Inc. has forecast that IT spending in India will grow 2.6% in 2023. India’s businesses will continue to invest in key segments of information technology despite the looming tensions of global inflation and the weakening rupee.
As device upgrades stabilize, Gartner forecasts weakening demand for devices in 2023. Businesses opt for public cloud services, and spending on data center systems is expected to decline as well. In 2023, it is expected that end-user spending on public cloud services in India will increase by 27%.
Data center systems and devices will be the only segment of IT spending that will experience growth in India in 2023, except for data center systems and devices.
According to Arup Roy, VP Analyst at Gartner,
“Inflation has not impacted enterprise spending on technology globally, and India is no exception to this trend. The headwinds are in favor of technology as businesses realized how going digital can benefit them in the long run. Depending upon the maturity level of the digital enterprise, the spending context may be different for different businesses, but overall technology spending will continue to be on the rise in 2023. As Indian organizations advance in their digital initiatives and maturity, they will need to elevate their cybersecurity focus or face severe business risks. Also, the paucity of good quality digital talent and technology/management skills will continue to be some of the top challenges that CIOs in India face in 2023,”
Table 1: India Total Enterprise Application Software End-User Spending Forecast, 2021 – 2023 (Millions of U.S. Dollars)
|
Market |
2021 Spending |
2021 Growth (%) |
2022 Spending |
2022 Growth (%) |
2023 Spending |
2023 Growth (%) |
|
Analytic Platforms |
360 |
19.6 |
419 |
16.5 |
495 |
18.2 |
|
Content Services |
276 |
20.0 |
319 |
15.5 |
366 |
14.8 |
|
Customer Experience and Relationship Management (CRM) |
959 |
20.5 |
1,132 |
18.1 |
1,341 |
18.5 |
|
Email and Authoring |
568 |
21.7 |
659 |
16.0 |
768 |
16.5 |
|
Enterprise Resource Planning |
460 |
18.5 |
514 |
11.6 |
566 |
10.3 |
|
Project and Portfolio Management |
65 |
15.2 |
71 |
9.6 |
78 |
10.2 |
|
Supply Chain Management |
196 |
14.4 |
216 |
10.2 |
241 |
11.4 |
|
Other Application Software |
746 |
14.9 |
828 |
11.0 |
919 |
10.9 |
|
Overall Total |
3,629 |
18.6 |
4,157 |
14.6 |
4,774 |
14.9 |
Source: Gartner (November 2022)
Despite the software segment’s projected growth of 13.7, it is still a sharp drop from 19.9% in 2021. Roy states several factors contributing to the decline. “Economy softening, geopolitical conflicts, no respite in the supply chain constraint, and the ongoing talent shortage contribute to the same.”
CIOs in India will need to be extremely creative about how they source talent, where they source from, and how effectively they use those resources.
The Gartner IT spending forecast methodology relies heavily on rigorous analyses of the sales of over a thousand vendors across a wide range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.