India IT spending forecast to drop to –4.5% in 2020 due to COVID-19

India IT spending on hardware, software and services is expected to drop to –4.5 percent in 2020 as compared to 2019 growth rate of +9.1 percent, IDC report said.
Dollar spending on technologyThe hardware segment will contribute the most to this decline.

Growth in Software is expected to drop to 4.1 percent in 2020 due to the impact of COVID-19 pandemic, as compared to 2019 growth rate of 16.7 percent as enterprises relook at their buying decisions owing to increased focus on profitability.

Growth in IT services is expected to be almost flat at 6.9 percent in 2020 as enterprises look at maintaining the status quo on IT services contracts.

On the software side, there will be a demand for productivity applications as the remote workforce increases.

Collaborative application vendors are looking at making minor adjustments and offering the premium version through a minimum price subscription model. Apart from collaborative tools, cloud platforms, security solutions, and automation technologies, most of the other applications will post only marginal growth.

On the IT services side, endpoint and network services will witness a stronger demand because of extended remote working options.

Hardware and software implementation or integration services will be slightly impacted because of the non-deployment/non-availability of new hardware or software. Implementation and integration services will be severely impacted.

New outsourcing deals or renewals will be shelved because of financial duress impacting the growth of the managed services market.

IT vendors are gearing up to adapt and transform the way of doing business, in a bid to support their clients during these testing times, says Shweta Baidya, senior research manager, Enterprise Software & IT Services, IDC India.

Solutions such as conferencing and collaboration, secure endpoint and network management, CRM, cloud storage, backup & recovery solutions, and remote support & services will achieve steady rise.

Renewal of IT services contracts will be delayed by a few quarters and organizations will adopt a wait and watch approach for non-critical IT spending.

Indian enterprises are also looking at cloud options for business continuity, infrastructure services, and application management.

Digital transformation has again become the centerpiece for all boardroom discussions as enterprises adjust to a new world in which all businesses are virtual. Enterprises are evaluating software-as-a-service (SaaS) and cloud models to facilitate business in a digital world, says Sharath Srinivasamurthy, research director, Enterprise Solutions & ICT Practices, IDC India.

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