Due to Covid-19 pandemic impact, IT spending in India will total $83.5 billion, a decline of 8.1 per cent in 2020, according to a forecast by Gartner on Wednesday. This is the first decline in IT spending experienced in India in the last five years.
“The fear of a global economic recession due to the Covid-19 pandemic is forcing CIOs (Chief Information Officers) in India to be very cautious on their IT spending this year,” Naveen Mishra, Senior Research Director at Gartner said in a statement.
“In partnership with their CFOs (Chief Financial Officers), CIOs in India are reprioritizing their IT budgets on mission critical initiatives.”
In order to adhere to the continued government restrictions on social distancing, CIOs in India will need to spend more on business continuity, remote working and workforce collaboration.
This is shifting spending toward technologies such as desktop as a service (DaaS), infrastructure as a service (IaaS), virtual private network (VPN) and security, Gartner said, adding that the overall Cloud adoption in India has increased, as a result of this increase in spending.
Spending on devices and data center systems in India are on pace to record the steepest declines in 2020, at -15.1 per cent and -13.2 per cent, respectively, said the report.
CIOs in India will consider extending life cycles of their existing device assets which will delay new purchases.
While spending is on pace to dip across all segments in India this year, technologies such as telehealth, smart-chatbots, mobile applications enabling deliveries, and distance learning education software will experience an increase in spending in 2020.
As a result, spending on enterprise software is set to record a moderate decline in 2020 at -2.6 per cent, it added.
“The lockdown measures forced sectors such as education, healthcare, and public utilities to accelerate their digital transformation,” said Mishra.
However, sectors such as retail, insurance, and banking that were already advanced in their digital transformation have to reduce their IT spending in 2020.
“These sectors will continue to spend on targeted digital initiatives such as artificial intelligence, machine learning and virtual sales assistants, however, they will have to reduce or stop spending on business transformation, process re-engineering and modernisation of existing systems,” Mishra added.