Poojitha Jayadevan
Staff Writer

Indian CIOs’ IT spending priorities in 2022

News Analysis
Dec 19, 2021

Software spending will grow fastest, followed by IT services, devices, data centre systems, and communications services, according to Gartner. Here are some insights on what it can mean for Indian CIOs.

indian money held by man in suit currency rupee bank notes by kritchanut gettyimages 950701812
Credit: Kritchanut / Getty Images

Indian IT spending will reach $101.8 billion in 2022, a rise of 7% from this year, according to Gartner’s latest forecast.

“In 2022, CIOs in India will build on renewed interest in technology from the business to gain funding for new IT projects,” said Gartner’s research vice president, Arup Roy, who led the analysis for the forecast. “India has experienced one of the fastest recoveries despite being one of the worst-hit regions in the second wave of the pandemic in early 2021. In 2022, CIOs in India will build on renewed interest in technology from the business to gain funding for new IT projects,” he adds.

Indian CIOs’ priority area is digital acceleration, says Roy: “This is a continuation of the digital business initiatives that they have had for the last 4-5 years.”

Spending on digital technologies will continue to accelerate, with a focus on cloud and analytics, Roy says.

Gartner expects all segments of IT spending in India to grow with software being the fastest of all, followed by IT services, devices, data centre systems, and communications services.

Here’s a breakdown of spending plans by category to help CIOs make informed decisions in the coming year.

Software: Software spending in India is forecast to grow fastest, up 14.4% to $10.5 billion in 2022. The software segment has two main components, infrastructure software and enterprise application software. The former is expected to reach $6.5 billion in 2022, a 14.6% rise, whereas the latter will reach $4.1 billion, growing 13.9%. They are further expected to have a growth rate of 16% and 15.8% respectively in 2023.

IT services: IT services will grow 9.1% to reach $19.8 billion. The major spending within IT services is consulting, constituting $5.2 billion of the total with a 12.6% increase forecast in 2022. It is further expected to increase by 10.4% in 2023. The next biggest service  spend is infrastructure implementation and managed services, forecast to rise 2.4% to $4.7 billion. Infrastructure-as-a-service (IaaS) is forecast to grow fastest, at 40.0%, to reach $2.4 billion in 2022 and to continue growing at 37.1% in 2023. Application implementation and managed services, business process services, and hardware support are the other sub-segments that will contribute $4.6 billion (up 5.0%), $1.8 billion (up 2.9%), and $1.1 billion (up 1.5%) respectively.

Devices: Since the beginning of the pandemic, hybrid work adoption has increased dramatically, necessitating more and different devices to access information from outside the office. As a result, device spending is up 7.5% to $44 billion. Mobile spending is expected to continue to grow at 11.1% to reach $34.9 billion in 2022, making it far and away the biggest contributor to this segment. It is expected to increase another 9% in 2023. Spending on PCs and tablets is forecast to drop 4.4% to $8.6 billion, while spending on printers will slip 0.6% to $702 million.

Data centre systems: Growth in data centre systems is forecast to be more sedate, rising 3.5% to reach $2.98 billion. Enterprise network equipment is forecast to make up the lion’s share of that, rising 5.5% in 2022 to $1.7 billion and another 6.8% in 2023. Server spending is expected to remain stable at $863 million and external controller-based storage to rise 3.0% to $346 million.

Communications services: Communications services spending is forecast to reach $24.6 billion, up 2.3% in 2022. The biggest slice in this segment is consumer mobile services, forecast to rise 3.4% to $16.9 billion in 2022, and a further 4.2% in 2023. Enterprise fixed services and enterprise mobile services are expected to reach $3 billion (up 0.9%) and $2.3 billion (up 1.5%) respectively, and continue their growth in 2023 at 0.2% and 2.6% respectively. Spending on consumer fixed services and unified communications is expected to decline in the coming years, down 3.9% to $1.5 billion, and down 1.5% to $739 million respectively in 2022.

Roy expects some areas will gain more attention than to others from Indian CIOs in the coming year. “Automation could be enabled through myriads of technologies but there is a lot of interest in specific technologies such as robotic process automation, intelligent document processing, artificial intelligence, machine learning, and conversational AI/Virtual assistants,” he says.