The IT & Business Services market is expected to register an annual growth rate of 8.7% to be valued at US$ 14.3 billion by December 2020, says IDC.
India’s IT and business services market is likely to grow by over 8% to reach USD 13.1 billion by the year-end and expand further to USD 14.3 billion by 2020, according to research firm IDC.
Of the IT & Business Services market, the IT Services market contributed 76% in 2H 2018. The IT Services market is slated to reach US$ 10 billion by December 2019, growing at 9.1% annually. The Indian government’s higher spending on the Digital India and Smart Cities initiatives, and the increased adoption of next-gen technologies by organizations is driving growth in the IT Services market.
IDC classifies the IT Services market into three categories – Project Oriented, Managed Services, and Support and Training. For 2H 2018 (July – December 2018), Project-Oriented Services was the largest segment, followed by Managed Services, and Support and Training.
Increased spend on digitization has driven the demand for IT Services, especially around Systems Integration. The faster-growing services included Hosting Infrastructure Services and Hosted Application Management; followed by IT Consulting and Application Management.
“In India, growth in the IT services market is being propelled by the BFSI and the government verticals. The other emerging verticals which are expected to adopt IT Services and futuristic technologies more aggressively in the next 3-5 years are the manufacturing, retail, healthcare and education verticals. Additionally, a number of technology start-ups offering niche solutions in AI, ML, IoT, blockchain, automation, etc. have come up, which is further driving adoption of IT Services in the country,” said Ranganath Sadasiva , Director, Enterprise Solutions, IDC India.
“In 2H 2018, it was seen that the major leading IT Services vendors forged partnerships or made acquisitions in open-source technology, in a bid to be able to meet organization’s demand for adopting Agile methodologies. Amongst the emerging technologies, AI and ML attracted more partnerships, on the back of increased demands from organizations to create innovative products and services. IT Services vendors also increasingly entered into partnerships to set up datacenters, or Security Operations Centers (SOCs), or Centers of Excellence (CoEs) in the country,” said Garima Goenka, Market Analyst – IT Services, IDC India.
IDC estimates that the IT Services market will grow at a CAGR of 8.6% between 2019-2023, to reach US$ 14.0 billion by the end of 2023.