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MUMBAI, India., June 3, 2020

Gartner Says IT Spending in India to Decline 8% in 2020 Due to the Impact of COVID-19

Spending on Devices and Data Centers to Record Highest Declines in 2020

IT spending in India will total $83.5 billion, a decline of 8.1% in 2020, according to the latest forecast by Gartner, Inc. 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 in India to be very cautious on their IT spending this year,” said Naveen Mishra, senior research director at Gartner. “In partnership with their CFOs, 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. 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% and -13.2%, respectively (see Table 1.) CIOs in India will consider extending life cycles of their existing device assets which will delay new purchases.

Table 1. India IT Spending Forecast (Millions of U.S. Dollars)

 

2019

Spending

2019

Growth (%)

2020

Spending

2020

Growth (%)

Data Center Systems

3,670

1.4

3,186

-13.2

Enterprise Software

6,287

11.7

6,125

-2.6

Devices

36,595

7.0

31,077

-15.1

IT Services

15,573

10.5

14,924

-4.2

Communications Services

28,744

-1.7

28,227

-1.8

Overall IT

90,869

4.7

83,540

-8.1

Source: Gartner (June 2020)

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%.

“The lockdown measures forced sectors such as education, healthcare, and public utilities to accelerate their digital transformation,” said Mr. 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 modernization of existing systems.”

More detailed analysis on the outlook for IT spending in India is available in the Gartner webinar "Virtual Briefing: How COVID-19 Has Impacted Indian IT Providers’ 2020 Business Plans".  Learn more about how to prioritize cost initiatives by business outcome with the Gartner Cost Optimization Framework.

Learn more about how to lead organizations through the disruption of coronavirus in the Gartner coronavirus resource center, a collection of complimentary Gartner research and webinars to help organizations respond, manage and prepare for the rapid spread and global impact of COVID-19.

Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.

The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across the hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast research is available to Gartner clients in “Gartner Market Databook, April 2020 Update.” This quarterly IT spending forecast page includes links to the latest IT spending reports, webinars, blog posts and press releases.

About Gartner

Gartner, Inc. (NYSE: IT) is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities today and build the successful organizations of tomorrow.

Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and an objective resource for more than 14,000 enterprises in more than 100 countries — across all major functions, in every industry and enterprise size.

To learn more about how we help decision makers fuel the future of business, visit gartner.com.

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