Worldwide IT spending is projected to total US$ 4.5 trillion in 2022, an increase of 5.1 per cent from 2021, according to the latest forecast by Gartner, Inc. In India, IT spending will total US$ 105.2 billion in 2022, an increase of 5.5 per cent from 2021.
Despite the potential impacts of the Omicron variant, economic recovery with high expectations for digital market prosperity will continue to boost technology investments. “2022 is the year that the future returns for the CIO. They are now in a position to move beyond the critical, short-term projects over the past two years and focus on the long term. Simultaneously, staff skills gaps, wage inflation and the war for talent will push CIOs to rely more on consultancies and managed service firms to pursue their digital strategies,” said John-David Lovelock, Distinguished Research Vice President, Gartner.
Gartner forecasts that the IT services segment – which includes consulting and managed services – is expected to have the second highest spending growth in 2022, reaching US$ 1.3 trillion, up 7.9 per cent from 2021. Business and technology consulting spending, specifically, is expected to grow 10 per cent in 2022.
Through 2025, organisations will increase their reliance on external consultants, as the greater urgency and accelerated pace of change widen the gap between organisations’ digital business ambitions and their internal resources and capabilities, according to Gartner.
“2022 is a growth year as Indian CIOs accelerate their long-term digital initiatives, despite the ongoing Omicron scare in India. Gartner’s 2022 Indian CIO and IT leader survey indicates increasing investment in artificial intelligence/ machine learning capabilities, business intelligence and analytics, and digital business solutions,” said Naveen Mishra, Senior Research Director, Gartner.
With these investments, like their global peers, Indian CIO’s will also be challenged with skills shortage, leading to increasing dependence on external services partners. This will bolster the spending on IT service segment, forecast to increase by nine per cent as compared to 2021 . Cloud based software consumption will be one of the biggest contributor towards the 15 per cent growth in software segment in India whereas the pent-up demand for data center technologies will bring four per cent growth to the data center segment in 2022.
“This will be particularly poignant with cloud as it serves as a key element in achieving digital ambitions and supporting hybrid work,” said Lovelock. “Gartner expects the vast majority of large organisations to use external consultants to develop their cloud strategy over the next few years.”
In 2020, within the enterprise application software market, the cloud market became larger than non-cloud market for the first time, due in part to the coronavirus pandemic. By 2025, Gartner expects it to be double the size of the non-cloud market. Cloud is responsible for nearly all the 11% spending growth within the enterprise software segment in 2022 as organizations focus on upgrading their software stack to software-as-a-service (SaaS) to support continued flexibility and agility.
