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Gartner Forecasts End-User Spending on IT Services in India to Reach $18 Billion in 2021

Gartner

Double Digit Growth Returns as Spending Grows 10.7%

End-user spending on IT services in India is on track to total $18 billion in 2021, an increase of 10.7% from 2020, according to Gartner, Inc.

“The Indian IT services market has proven its durability through the last 15 months of the pandemic. The surge in remote working, need for business continuity planning and increased focus towards digitalization has increased the demand for IT services,” said Arup Roy, research vice president at Gartner. “In 2020, spending on IT services slowed, but did not decline. While some digitalization projects were stalled due to IT budget contractions and economic uncertainties in 2020, 2021 is experiencing renewed interest in rapid digitalization from end-user organizations.”

The consulting segment will be the largest in terms of end-user spending in 2021. It is forecast to total $4.6 billion this year, up from $4.1 billion in 2020. (see Table 1). Hardware support will be the only segment where spending will decline in 2021. It will decline 2.8% as end-user organizations reduce their spending on client device support and data center support systems.

Table 1. IT Services End-User Spending by Segment, India, 2019-2021 (Millions of Dollars)

Segment 2019 2020 2021
Consulting 3,962 4,103 4,617
Business Process Services 1,646 1,686 1,783
Infrastructure Implementation and Managed Services 4,469 4,389 4,594
Hardware Support 1,085 1,077 1,047
Infrastructure as a Service (IaaS) 725 1,075 1,689
Application Implementation & Managed Services 3,993 4,022 4,372
Total 15,880 16,352 18,103

Due to rounding, some figures may not add up to the totals shown.

Source: Gartner (July 2021)

“Organizations in India are moving towards a cloud-only or a cloud-first model, which is why spending on infrastructure as a service (IaaS) will experience strong growth in 2021,” said Roy. “Indian enterprises are demanding more agility, rapid innovation and a swift move towards becoming a composable enterprise resulting in an increased adoption of cloud through 2021.”

In 2021, end user spending on IaaS will total $1.6 billion, growing 57% as compared to 2020. This will be the highest registered growth rate within all segments of IT services spending in India. While IaaS is expected to contribute to 9% of the total spending on IT services in the country in 2021, by 2025, spending on IaaS is forecast to make up 22.7% of the total spending on IT services in India.

Gartner clients can read more in “Forecast: IT Services, Worldwide, 2019-2025, 2Q21 Update.”

 

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About Gartner

Gartner, Inc. (NYSE: IT) is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities and build the successful organizations of tomorrow.

Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and objective resource for more than 14,000 enterprises in more than 100 countries — across all major functions, in every industry and organization size.

To learn more about how we help decision makers fuel the future of business, visit www.gartner.com.

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