Domestic information technology (IT) spending in India is expected to see a decline of 4.1% in 2020, according to data intelligence firm IDC.
In an earlier forecast, the Framingham, Massachusetts-based company had said the overall Indian software market would have a compound annual growth rate (CAGR) of 14.1% for the 2018-2023 period.
The IT spending, which includes hardware, software and services section, is expected to drop 4.5% in 2020 as against the previous year’s growth rate of 9.1%, IDC said in its latest Worldwide Black Book Live edition.
“IT vendors are gearing up to adapt and transform the way of doing business, in a bid to support their clients during these testing times,” Shweta Baidya, senior research manager for enterprise software and IT services, IDC India, said in a statement.
While the hardware segment is expected to be the worst hit, the software side could notice an increase in demand for productivity applications as businesses try to make work from home more efficient amid the Covid-19 pandemic.
In terms of IT services, endpoint security, and network services and solutions could also witness a strong demand due to extended remote working operations, it said.
“Digital transformation has again become the centrepiece for all boardroom discussions as enterprises adjust to a new world in which all businesses are virtual,” Sharath Srinivasamurthy, research director of enterprise solutions and ICT practices, IDC India, said.
Srinivasamurthy also stressed on how enterprises were now evaluating software-as-a-service and cloud models to facilitate business in a digital world.
Indian SaaS-based firms are already witnessing heavy demand as enterprises have moved towards the work from home model due to the Covid 19 pandemic. A few businesses are even contemplating a permanent remote working scenario for their employees.
IT services major Tata Consultancy Services recently announced that 75% of its workforce will continue to work from home in the future.
Meanwhile, the department of telecommunications has extended the permission for IT companies to enable their employees to work from home to July 31.