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End-user IT spending in India to reach $15 billion in 2019: Gartner

Non-traditional sectors like logistics, transportation and manufacturing are experiencing healthy growth rates

PTI|
May 06, 2019, 04.07 PM IST
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The managed services and cloud infrastructure services will continue to be the biggest segment in terms of spending on IT services in India
Mumbai: End-user information technology spends by Indian companies will jump by nearly 10 percent to $15 billion in 2019, a report said Monday.

The fastest growth will be in the business process outsourcing sector, which is estimated to grow at over 14 percent to $1.9 billion, the estimate by the consultancy firm Gartner said.

"High GDP growth rates are driving local organisations to increase their investment in infrastructure, applications and digital initiatives, which are increasingly moving to the cloud," its vice president for research Arup Roy said.

Non-traditional sectors like logistics, transportation and manufacturing are experiencing healthy growth rates as their business models get centered on investments in IT, he added.

On the BPO front, the report said crowdsourcing, working at home (WAH) or teleworking, and the 'gig economy' will account for 40 percent of the customer management (CM) BPO workforce by 2021, up from 7 percent in 2017. By 2021, it will account for an estimated 900,000 people.

Nearly two-thirds of this will be employed by CM BPO service providers, while the rest will be employed by end-user companies directly, Roy said.

"A key benefit of crowdsourcing, WAH/teleworking and the gig economy is access to specialized talent that may not all reside in the same area or that may be unwilling to commute to a central location to work," he said.

This model also helps mitigate some other business risks, by, for example, providing clear benefits from a business continuity perspective and helping attract buyers from a corporate social responsibility perspective, the report said.

The managed services and cloud infrastructure services will continue to be the biggest segment in terms of spending on IT services in India, with nearly USD 6 billion in spends, it said.

Roy said there is a shift in how organisations are adopting to the cloud, mentioning that they are looking not just to acquire cloud infrastructure as a service (IaaS) resources themselves, but also the automated management of those resources, management tools delivered as services, and cloud software infrastructure services.

Hence, the consultancy expects that while IaaS-only cloud providers will continue to exist, they will become increasingly niche due to the breadth and depth of service offerings that end-user organisations require.

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