Indian IT spend to rise 6.8%, reach $88.8 bn in Calendar 2021: Gartner

Spending fell 2.7% in 2020 with focus only on 'mission-critical' tech & services during early stages of pandemic; worldwide spending pegged at $3.9 trillion in 2021, up 6.2%

India's information technology spending is expected to reach $88.8 billion in 2021, an increase of 6.8 per cent from last year, according research firm Gartner. 

In 2020, India IT spending fell 2.7 per cent as chief information officers prioritized spending on technology and services that were deemed “mission-critical” during the initial stages of the pandemic.

Gartner further forecast worldwide IT spending would be $3.9 trillion in 2021, an increase of 6.2 per cent from 2020, largely due to the increased speed of digital transformation last year to satisfy remote working, education and new social norms.

“In 2021, CIOs have to fast track their digital projects to get the necessary attention and funding from the board,” said Naveen Mishra, senior research director at Gartner. “Digital initiatives directly related with improving customer engagement and supported with a shorter ROI (return on investment) window will be prioritised in the current economic environment. Improving demand scenario across select verticals in India will spur the overall IT spending in 2021.”

All IT spending segments are forecast to return to growth in 2021. Enterprise software is expected to have the strongest rebound (8.8 per cent) as remote work environments are expanded and improved. The devices segment will see the second highest growth in 2021  of 8 per cent and is projected to reach $705.4 billion in IT spending.

“There are a combination of factors pushing the devices market higher,” said John-David Lovelock, distinguished research vice president at Gartner. “As countries continue remote education through this year, there will be a demand for tablets and laptops for students. Likewise, enterprises are industrializing remote work for employees as quarantine measures keep employees at home and budget stabilisation allows CIOs to reinvest in assets that were sweated in 2020.”

Gartner forecasts global IT spending related to remote work will total $332.9 billion in 2021, an increase of 4.9 per cent from 2020.  

Through 2024, businesses will be forced to accelerate digital business transformation plans by at least five years to survive in a post-Covid-19 world that involves permanently higher adoption of remote work and digital touchpoints, it added.

Despite the availability of Covid-19 vaccines, the virus will continue to require government health interventions throughout 2021. Non-Covid-19 geopolitical factors such as Brexit and the US-China tension will also inhibit recovery for some regions.

“Covid-19 has shifted many industries’ techquilibrium,” said Lovelock. “Greater levels of digitalisation of internal processes, supply chain, customer and partner interactions, and service delivery is coming in 2021, enabling IT to transition from supporting the business to being the business. The biggest change this year will be how IT is financed; not necessarily how much IT is financed.”