By Dominick Rodrigues
Mumbai: India’s total domestic IT spending (comprising enterprise and consumers) is estimated to grow by 8.8% in 2021 to reach Rs 273,776 crores – despite negative growth of -1.8% in 2020 due to the COVID impact and first-time-ever de-growth — according to Dr Kapil Dev Singh, CEO, Coeus Age.
Dr Singh was quoting the annual report titled “Enterprise Business and IT Priorities 2021” brought out by Coeus Age, a fast-growing research organization. The research report is based upon inputs of 96 CEOs and 110 CIOs/IT Heads of large and medium-sized Indian enterprises. Inputs were sought regarding their business and IT priorities for 2021.
‘Every industry has been negatively impacted by the COVID crisis and IT industry has been no exception. But the impact has been less severe — given IT’s importance in helping businesses and individuals survive the crisis. Though the overall spending has marginally dipped in 2020, and the business outlook for 2021 looks uncertain, IT spend is expected to bounce back with 8.8% growth,” he noted.
“The business outlook for 2021 shall remain uncertain and challenging as 69% of the CEOs feel the crisis will remain through 2021, while 51% see the growth looking uncertain or may take another 6 months to return. Despite that, the domestic IT spend shall bounce back in 2021 with an estimated growth of 8.8%, as enterprises are keen on continuing their IT spend to build newer capabilities.”
“India’s domestic IT spend in 2020 is estimated at Rs 251,540 Crore; contracts -1.8% over 2019; first negative growth ever due to COVID. Adopting digital (56%), ensuring security and BCDR (49%), and IT operations automation (46%) emerge as top 3 enterprise priorities for 2021,” the report stated.
“The IT spending growth in 2021 is — despite the uncertainty that prevails in the environment. COVID impact on business — far from over. Around 48% of the CEOs expect uncertainty to be present through 2021 and another 21% think it may have subsided but may take time to go away. This has implications for the growth scenario that they envisage, where 51% see the growth looking uncertain or may take another 6 months to return.”
“This thinking is only natural, given that a vaccination program will also take 6 to 9 months to cover the entire population. And then, there are scares of new variety of viruses emerging. All put together, the environment will remain uncertain for a large part of 2021.”
“But a deep realisation that has set in the CEO’s mind is that of digital transformation. Their new strategic orientation is built largely with digital at the core. This is clearly evident from their stated strategic priorities, where IT Model (54%) and Digital Transformation (46%) are at the top. This has direct implications on their IT and Digital Spend and the specific mix of that spend. Even with the business scenario remaining uncertain, businesses will continue spending on IT and Digital.”
“The IT spend by the enterprises (business and government) dipped by 3.5% in 2020, primarily due to lower spending on traditional IT. The commoditized traditional hardware and software products (PC, Server, Storage, Networking, and In-premise Enterprise Software) spend has been severely hit in 2020 due to COVID. It de-grew by 10.7% and is expected to remain under pressure in 2021 too.”
“Enterprise spend on digital technologies has saved the day as it grew by 18% in 2020, though at a slower pace than previous years. It is expected to be strong in 2021, growing at 23.4%. Digital shall help Enterprises become Agile, Sustainable, and Efficient. Adopting digital (56%), ensuring security and BCDR (49%), and IT operations automation (46%) emerge as top 3 enterprise priorities for 2021,” the Coeus Age report revealed.
“The top three enterprise priorities for 2021 of adopting digital, ensuring security and BCDR, and IT operations automation are reflection of the environment that businesses are operating in. The triple imperatives of agility, sustainability, and efficiency with inherent tensions among them has been brought to fore by the COVID crisis. The gradual enterprise approach has been replaced by an urgent focus on leveraging IT and digital to manage the tension while focussing on the three imperatives.”
‘The COVID crisis has in-fact catalysed the digital transformation drive of the enterprises. Business leadership is now convinced about the need of revamping their approach to survive in the new normal that has emerged and digital has been accepted as an important cornerstone of their strategy,” Dr. Singh observed.
Coeus (Koios) was the Greek Titan of intelligence, the axis around which the heavens revolved. In the current age, enterprise intelligence is the axis around which organizing takes place, a true source of strategic advantage and success.
Coeus Age is a fast-growing research and consulting organization that is continuously developing actionable insights for the business and government leaders build value amid digital disruption.
