Tuesday, June 18, 2024

IT spend in India projected to total $108.5 billion in 2023: Gartner

IT spending in India is projected to total $108.5 billion in 2023, while global tech spend is projected to reach $4.6 trillion in 2023, an increase of 5.5% from 2022, forecast Gartner, Inc., on Thursday.

Despite continued global economic turbulence, all regions worldwide are projected to achieve IT spending growth in 2023, as per the report.

On the India front, the report stated that for the remainder of the year (calendar 2023), Indian CIOs would remain cautious, targeting their spend on IT modernisation and growth initiatives, which typically involve business-led investments in applications and software-as-a-service (SaaS).

According to Gartner’s analysis, many Indian CIOs are embarking on cost optimisation and efficiency programmes which are resulting in a decline in spending on data center systems. The acceleration in cloud migration, coupled with IT skills shortage, are projected to fuel IT services spending in the country, which is on pace to reach 21.9 billion in 2023.

Globally, the IT services segment would continue its growth trajectory through 2024, largely driven by the infrastructure-as-a-service market, which was projected to reach over 30% growth this year. For the first time, price was a key driver of increased spend for cloud services segments, rather than just increased usage, found the study.

“Macroeconomic headwinds are not slowing digital transformation,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “IT spending will remain strong, even as many countries are projected to have near-flat gross domestic product (GDP) growth and high inflation in 2023.

According to Lovelock, CIOs face a balancing act that is evident in the dichotomies in IT spending. “For example, there is sufficient spending within data center markets to maintain existing on-premises data centers, but new spending has shifted to cloud options, as reflected in the growth in IT services,’‘ he added.

Tech talent shortages continue amidst layoffs

Even as layoffs continue to impact the tech industry at large, there is still a critical shortage of skilled IT labor. The demand for tech talent greatly outstrips the supply, which will continue until at least 2026 based on forecast IT spend, as per Gartner.

“Tech layoffs do not mean that the IT talent shortage is over,” said Lovelock. “IT spending on internal services is slowing in all industries, and enterprises are not keep up with wage rate increases.’‘ As a result, enterprises would spend more money to retain fewer staff and would turn to IT services firms to fill in the gaps,’‘ he added.

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