India’s IT spending is forecast to total $110.6 billion in 2022, growing 6.3% from 2021, according to the latest forecast by Gartner. The forecast has been revised from its earlier estimate of $105.2 billion, which showed an increase of 5.5% year-on-year primarily due to the growth in devices in 2021.
In 2021, India’s spending on devices reached an all-time high, growing at 34.8% and is likely to maintain a steady growth momentum over the next two years. Furthermore, India spending on IT services is forecast to total $19.7 billion in 2022, an 8.6% growth from 2021. According to the latest forecast, the increasing cost of talent will be one of the major growth drivers, said Gartner.
“In 2022, along with devices Indian CIO’s and business leaders will continue to increase their spending towards analytics, artificial intelligence, machine learning, customer experience and cloud in 2022,” said Naveen Mishra, senior research director at Gartner.
“Indian CIOs are contemplating to restructure their existing IT vendor engagement programs with an eye on co-creation of solutions in close partnership with their providers and newer contracting models,” he added.
Meanwhile, global IT spending is projected to total $4.4 trillion in 2022, an increase of 4% from 2021, said the analyst firm.
“This year is proving to be one of the nosiest years on record for CIOs,” said John-David Lovelock, distinguished research vice president at Gartner. “Geopolitical disruption, inflation, currency fluctuations and supply chain challenges are among the many factors vying for their time and attention, yet contrary to what we saw at the start of 2020, CIOs are accelerating IT investments as they recognise the importance of flexibility and agility in responding to disruption.”
“As a result, purchasing and investing preference will be focused in areas including analytics, cloud computing, seamless customer experiences and security.”
Inflation impacts on IT hardware (e.g., mobile devices and PCs) from the past two years are finally dissipating and are starting to spill over into software and services.
With the current dearth of IT talent prompting more competitive salaries, technology service providers are increasing their prices, which are helping to increased spending growth in these segments through 2022 and 2023. Software spending is expected to grow 9.8% to $674.9 billion in 2022 and IT services sector is forecast to grow 6.8% to reach $1.3 trillion.
Gartner expects digital business initiatives such as experiential end-consumer experience and optimisation of supply chain to push spending on enterprise applications and infrastructure software into double-digit growth in 2023.
The Russian invasion of Ukraine is not expected to have a direct impact on global IT spending, said the Gartner analyst. Price and wage inflation compounded with talent shortages and other delivery uncertainties are expected to be greater impingements on CIOs’ plans in 2022 but will still not slow down technology investments.
“CIOs anticipate having the financial and organisational ability to invest in key technologies throughout this year and next,” said Lovelock.
“Some IT spending was on hold in early 2022 due to the Omicron variant and subsequent waves but is expected to clear in the near-term,” he added.
Lovelock also said that CIOs who focused on key market signals, such as the shift from analog to digital business and buying IT to building it, as well as negotiate with their vendor partners to assume ongoing risks, will fare better in the long-term.
At this point, only the most fragile companies will be forced to pivot to a cost cutting approach in 2022 and beyond, said Gartner.