IT Services Spending in India Set to Reach $15 Billion in 2019

Gartner Analysts expect a high growth on IT services end user spending in India for 2019. Approx 9.8% increase from last year and it will reach $15 billion in 2019 only. In India, IT services end user spending will represent 59% of total end user spending on IT services in 2019.

Investments on applications, SaaS, cloud computing, Analytics, Automation, and IT infrastructure driving organizations towards the digitization. On BPO (business process outsourcing) spending expected to reach highest in 2019. BPO segment organizations will increase their budget on end user IT spending. Particularly IT services spending from BPO set to reach $ 1.7 billion this year and 1.9 billion for 2020.

Speaking with Arup Roy, research vice president at Gartner. said “High GDP growth rates are driving local organizations to increase their investment in infrastructure, applications and digital initiatives, which are increasingly moving to the cloud. Nontraditional sectors, such as logistics and transportation and manufacturing, are also experiencing healthy growth rates, and their business models are centered on investments in IT.”

IT Services End-User Spending by Segment, India, 2018-2020 (Millions of Dollars)

Segment	2018	2019	2020
Consulting	3,373	3,782	4,362
Managed services and cloud infrastructure services	5,537	5,946	6,605
Business process outsourcing	1,451	1,660	1,941
Implementation	3,232	3,535	3,985
Total	13,593	14,923	16,893

Source: Gartner (May 2019)

Crowdsourcing, Home Working/Teleworking and the “Gig Economy” Are on the Rise

Analysts expect that crowdsourcing, working at home (WAH)/teleworking, and the “gig economy” will account for 40% of the customer management (CM) BPO workforce by 2021, up from 7% in 2017. By 2021, it will account for an estimated 900,000 people.

“Most of this workforce — nearly two-thirds — will be employed by CM BPO service providers, while the rest will be employed by end-user companies directly,” said Mr. Roy. “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.”

This way it will also reduce business risks – example, providing clear benefits from a business continuity perspective and helping attract buyers from a corporate social responsibility perspective.

Managed Services and Cloud Infrastructure Services Continues to Grow

This year cloud infrastructure and managed services will be biggest segments in terms of spending on IT services in India. Cloud infrastructure adn managed services segment represents 40% of end user spending on IT services in India.

“We have identified a shift in how organizations adopt cloud technologies,” said Mr. Roy. “Organizations in India are increasingly looking to acquire not only 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.” As a result, Gartner analysts expect 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 organizations require.