India IT spending to fall 8% this year due to Covid-19, first fall in 5 yrs

Devices and data centre systems may see steepest spending declines, at -15.1% and -13.2%, respectively

Information technology (IT) spending in India is likely to decline by 8.1 per cent in 2020 due to Covid-19, the first such fall in the past five years, forecast research firm Gartner. 

The spend is expected to total $83.5 billion. “The fear of a global economic recession due to the Covid-19 pandemic is forcing CIOs (chief information officers) in India to be very cautious on their IT spending this year,” said Naveen Mishra, senior research director at Gartner. “In partnership with their CFOs, CIOs in India are reprioritizing their IT budgets on mission critical initiatives.”

In order to adhere to the continued government restrictions on social distancing, CIOs in India will need to spend more on business continuity, remote working and workforce collaboration. This is shifting spending toward technologies such as desktop as a service (DaaS), infrastructure as a service (IaaS), virtual private network (VPN) and security, Gartner said in a statement. 

As a result of this spending, the overall cloud adoption in India has increased.

Gartner expects spending on devices and data centre systems in India to see their steepest declines in 2020, at -15.1 per cent and -13.2 per cent, respectively. CIOs in India will consider extending life cycles of their existing device assets which will delay new purchases. 

However, technologies such as telehealth, smart-chatbots, mobile applications enabling deliveries, and distance learning education software will likely see an increase in spending in 2020. As a result, spending on enterprise software is set to record a moderate decline of 2.6 per cent during the year.

“The lockdown measures forced sectors such as education, healthcare, and public utilities to accelerate their digital transformation,” said Mishra. “However, sectors such as retail, insurance, and banking that were already advanced in their digital transformation have to reduce their IT spending in 2020. These sectors will continue to spend on targeted digital initiatives such as artificial intelligence, machine learning and virtual sales assistants, however, they will have to reduce or stop spending on business transformation, process re-engineering and modernization of existing systems.”