NEW DELHI, Nov 10: The Indian IT and Business Services market was valued at USD 6.96 billion and recorded a 6.4 per cent year-over-year growth in the first half of 2021, research firm IDC said on Wednesday.
The IT and Business Services market had registered a 5.1 per cent growth in the January-June 2020 period, IDC said.
“The increase in growth rate was primarily due to the continued focus on digital transformation initiatives by enterprises in the country,” it added.
Of the IT and Business Services market, the IT Services market contributed 78 per cent and grew by 7.3 per cent in the first half of 2021, as compared to the 5.7 per cent growth in the year-ago period.
As per IDC, the IT and Business Services market will witness an increased momentum in the upcoming cycles due to the revival of the economy and increased spending in areas like cloud, security, artificial intelligence, etc.
The IT and Business Services market is projected to reach USD 19.93 billion by the end of 2025, growing at a compound annual growth rate (CAGR) of 8.2 per cent between 2020-2025, IDC said.
“Despite the harsh second wave of the COVID-19 pandemic, enterprises continued to invest in digital transformation initiatives to address the change in business models, streamline operations, enhance customer and employee experience, and improve overall resiliency,” IDC India Senior Market Analyst (IT Services) Harish Krishnakumar said.
Verticals like government and manufacturing, which delayed IT investments in 2020, hiked up their IT spend in the first half of 2021, and enterprises in the country continued to increasingly depend on IT service providers for solutions in areas like cloud, security, artificial intelligence, analytics, etc, he added.
With the vaccination drive picking up pace, the overall economy and consumer demand are expected to bounce back to pre-COVID levels, thus driving the Indian IT services market in the upcoming months, Krishnakumar said.
IDC classifies the IT & Business Services market into three primary markets – Project-Oriented, Managed Services, and Support Services.
During the first half of 2021, project-oriented services registered the highest growth rate at 7.2 per cent, followed by managed services at 6.2 per cent, and support services at 5.3 per cent.
“1H2021 turned out to be the year that showcased that enterprise resiliency strengthened at a remarkable pace. Most enterprises witnessed a bounce back with business reaching the pre-pandemic situation,” IDC India Senior Research Manager (Enterprise Software and ICT Services) Shweta Baidya said.
While large enterprises continued to take long strides towards transformation initiatives, the mid-market segment adopted a cautious approach towards technology investments; with a focus on investments that provided quick returns in the form of customer acquisition, talent retention or financial returns, Baidya added.
“Long-term or capital-intensive projects were de-prioritised for some of the SMB organisations. Large enterprises evaluated infrastructure modernisation and application transformation projects and engaged with service providers to navigate the journey,” Baidya said.
Small and medium businesses focused on process automation, customer experience management, and hybrid cloud management during the period, Baidya added. (PTI)
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