The latest report by Gartner revealed that India’s IT spending is set to surge to $112.2 billion in 2023, indicating a modest increase.
Indian Chief Information Officers (CIOs) are cautiously optimistic and plan to invest in initiatives aimed at enhancing employee productivity and elevating customer experience (CX), leading to a projected 14.6 percent annual growth in enterprise software spending.
Talent shortages continue to be a persistent concern in India, which is anticipated to drive an 8 percent growth in IT services spending. Despite this, the report indicated that generative artificial intelligence (AI) is not yet significantly impacting IT spending levels. However, it is expected that in the long term, generative AI will be integrated into enterprises through existing spending.
Global IT spending
Globally, IT spending is predicted to reach a staggering $4.7 trillion in 2023, marking a notable increase of 4.3 percent from the previous year.
“Digital business transformations are beginning to morph. IT projects are shifting from a focus on external-facing deliverables such as revenue and customer experience, to more inward-facing efforts focused on optimization,” John-David Lovelock, distinguished VP analyst at Gartner, said.
The software segment is expected to witness double-digit growth in 2023, as organizations ramp up utilization and reallocate spending to core applications and platforms that drive efficiency gains, like enterprise resource planning (ERP) and customer relationship management (CRM) applications. Additionally, vendor price increases are set to bolster software spending throughout the year.
However, not all segments of IT spending will experience growth in 2023. Device spending is projected to decline by 8.6 percent due to the ongoing impact of inflation on consumer purchasing power. It is not expected for devices spending to recover to 2021 levels until at least 2026.
Despite challenges, the outlook for enterprise IT spending remains positive. With Indian CIOs leading the charge in investing for improved productivity and customer experience, the IT industry in India is poised for continued growth.
