Despite the harsh second wave of the Covid-19 pandemic, Indian IT services market grew 7.3% in the first half of 2021 as compared to the 5.7% growth in the same period last year, as per International Data Corporation's (IDC) latest report.
The IT and Business services market is projected to reach $19.93 billion by the end of 2025, growing at a CAGR of 8.2% between 2020 and 25.
According to the IDC’s Worldwide Semiannual Services Tracker, the Indian IT and Business services market witnessed a 6.4% year-over-year growth in H1 2021 as compared to 5.1% growth in the same period last year.
IDC also maintained that the market will witness an increased momentum in the upcoming cycles due to the revival of the economy and continued increased spending in areas like cloud, security, artificial intelligence, etc. Of the IT and Business services market, the IT services market contributed 78%.
“Despite second Covid wave, enterprises continued to invest in digital transformation initiatives to address the change in business models, streamline operations, enhance customer and employee experience, and improve overall resiliency.
Verticals like government and manufacturing, which delayed IT investments in 2020, hiked up their IT spend in 1H2021, and enterprises in the country continued to increasingly depend on IT service providers for solutions in areas like cloud, security, artificial intelligence, analytics, etc.,” said Harish Krishnakumar, Senior Market Analyst, IT Services, IDC India.
Pegging the IT and Business services market at US$ 6.96 billion, IDC classifies it into three primary markets – Project-Oriented, Managed Services, and Support Services.
For the first half of 2021, project-oriented services registered the highest growth rate at 7.2%, followed by managed services at 6.2%, and support services at 5.3%, respectively.
“With the vaccination drive picking up pace, the overall economy and consumer demand are expected to bounce back to pre-Covid levels, thus driving the Indian IT services market in the upcoming months,” added Krishnakumar.