The Indian IT services market expanded by 6.1 per cent in 2023, reaching a market size of USD 14.5 billion, as per a latest industry report. Despite a deceleration in IT investment, digital transformation (DX) initiatives have been a key driver of growth as companies navigate increasingly complex IT ecosystems.
The integration of on-premises, private, and multicloud environments, along with the adoption of advanced solutions like artificial intelligence (AI), generative AI (GenAI), and heightened security protocols, has set the stage for continued expansion in 2024, mentioned the IDC report.
The report pointed to a good demand across cloud services, AI, cybersecurity, and application modernisation, with significant traction in sectors such as government, telecommunications, and manufacturing.
Neha Gupta, Senior Research Manager for Software and IT Services at IDC India, noted that service providers are essential in helping businesses handle intricate infrastructures and deploy AI responsibly to enhance customer experiences.
“The increasing complexity of IT ecosystems—blending on-premises, private, and multicloud environments—along with surging demand for AI and GenAI solutions, stronger security measures, and automation, will drive the market forward. Service providers are at the heart of this evolution, enabling businesses to manage complex infrastructures, responsibly harness AI, and deliver enhanced customer experiences,” she said.
India’s IT service budgets are expected to grow further as companies increase their reliance on external IT partners, invest in their internal IT teams, and develop new digital business models. Key areas of focus include analytics, automation, and cognitive tools, with GenAI expected to play a central role.
Organisations are reportedly using GenAI for data management, risk mitigation, and productivity enhancements, with applications ranging from report summarization and job description generation to coding. While initial GenAI applications are being tailored for specific business functions like marketing, sales, and procurement, future industry-specific use cases will address unique operational needs through extensive customisation.
The IDC report also stressed the need for technology vendors to act as forward-thinking partners, supporting clients in generating digital value and maintaining a competitive edge in today’s rapidly evolving digital landscape.
