• End-user spending on IT services in India to reach $18b in 2021, registering a growth of 10.7%.

Spending on infrastructure-as-a-service (IaaS) will experience the strongest growth in India this year as organisations are moving towards a cloud-only or a cloud-first model.

Arup Roy, Research Vice-President at Gartner, said that end-user spending on IaaS, which supports mission-critical workloads and avoids high on-premises costs, will total $1.6 billion, growing 57 per cent 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 per cent of the total spending on IT services in the country in 2021, by 2025, spending on IaaS is forecast to make up 22.7 per cent of the total spending on IT services in India,” he said.

Moreover, he said that Indian enterprises are demanding more agility, rapid innovation and a swift move towards becoming a composable enterprise resulting in increased adoption of cloud through 2021.

The opening of data centres by hyperscalers such as Google, Microsoft, AWS and Oracle will fuel the adoption.

In 2020, Roy said that spending on IT services slowed but did not decline.

Rapid digitalisation

“While some digitalisation projects were stalled due to IT budget contractions and economic uncertainties in 2020, 2021 is experiencing a renewed interest in rapid digitalisation from end-user organisations,” he said.

Gartner expects that end-user spending on IT services in India is on track to total $18 billion in 2021, an increase of 10.7 per cent from 2020.

Roy said that the Indian IT services market has proven its durability through the last 15 months of the pandemic while the surge in remote working, need for business continuity planning and increased focus towards digitalisation has increased the demand for IT services.

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.

Hardware support will be the only segment where spending will decline in 2021. It will decline by 2.8 per cent as end-user organisations reduce their spending on client device support and data centre support systems.

Globally, the IT services segment is forecast to total $1.2 trillion in 2021, an increase of 9.8 per cent from $1 trillion in 2020.

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