India Enterprise IT Spending Growth In 2023 To Be Slower Than 2022: IDC

Latest data from International Data Corporation (IDC) indicates the growth of IT spending in 2023 by Indian enterprises and service providers to be slower than 2022.

The IT spending by Indian enterprises and service providers is projected to grow 7.8 per cent in 2023.

The data from IDC suggests that consumer IT spending experienced a sharp decline in Q4 2022 and turned cautious due to rising prices, pulling the growth to 2.1 per cent in 2023.

IDC predicts that overall Indian IT spending is projected to grow by 4.7 per cent in 2023 to USD 86.7 billion in constant currency, lower than the earlier projection of 5.8 per cent growth.

Enterprises' immediate concerns impacting IT budgets are inflation-driven price increases, staffing shortages, IT supply chain constraints - especially on the networking side, and the impact of the weakening global economy on expected business revenues, IDC mentioned in its press release.

"Rising inflation and currency devaluations made technology investments costlier. Enterprises focused on immediate needs by either stretching or prioritizing budgets. But with worries around weakening global macroeconomic situation, spending growth has moderated," said Vinay Gupta, Research Director, IT Spending Guides, IDC Asia/Pacific.

"Enterprises still face challenges impacting their business and will look at consumption-based models to drive their focus on transformation," he added.

Meanwhile, IDC expects Domestic IT Services spending to grow 8.7 per cent in 2023, driven by enterprises' need to increase customer engagement and satisfaction, launch new products/services, and improve operational efficiency to drive revenue growth and profitability.

Also, the report from IDC highlighted that the software spending is projected to grow 15 per cent in 2023, driven by higher adoption of cloud-based solutions. “Automation-related platforms and tools, security, workplace solutions (collaboration, content management, virtual meeting, unified communications), data and analytics initiatives/projects, infrastructure, and IT operation optimisation initiatives are still focused areas for enterprises despite the moderating economic growth,” it mentioned.