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India Inc to spend over $100 bn on IT projects in 2022: Report

IBEF:  December 02, 2021

In 2022, India Inc. is expected to spend a total of US$ 101.8 billion on Information Technology (IT) project, which indicates a 7% rise over 2021, market research firm Granter said on Wednesday. Indian companies spent US$ 95.1 billion in 2021 on IT services.  According to Gartner, in 2022 spending decisions will be driven by new projects that drive innovation, modernize legacy systems, hire talent to support the projects, and build an IT architecture that can withstand future disruptions. “In 2022, CIOs in India will build on renewed interest in technology from the business to gain funding for new IT projects," said Mr. Arup Roy, research vice president at Gartner. He believes the digital transformation trajectory that started in response to the pandemic is here to stay for the next few years. However, he cautioned that the highly fluid business environment in the last 20 months will likely continue in 2022.

Spending is expected to grow on all major IT segments in which devices will account for 43% of the total IT spending as more organizations are expected to shift from remote to a hybrid model by next year. From 2021 a 7.5% increase in device spending is to be observed which will be US$ 44 billion.

Roy said growth in devices is a combination of two components – hybrid work and pent-up demand from 2020 for device upgrades.

Except for devices, Indian organizations are expected to spend most on communication services (US$ 24.5 billion) and IT services (US$ 19.7 billion), growing at 2.3% and 9.1%, respectively, as compared to 2021. Communication services saw a major jump of 11% in 2020 after the pandemic to support remote work.

In terms of the highest growing segment, spending on software services is expected to grow at 14.4% from 2021 to reach a total of US$ 10.5 billion.

Though data centre systems are no longer a top priority, many organizations are still not giving up on them completely. Many organizations still trust them more for storing critical data and applications.

Spending on data centre systems are expected to grow at 3.4% to US$ 2.8 billion.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.