IT spend to grow 5.5% amid Omicron spread

Investment chart

- Overall spending likely to be $105.2 bn in 2022

- Cloud-based software consumption will be 15% growth in India

- Pent-up demand for data centre technologies will lead to 4 %

- Business and technology consulting spending, specifically, is expected to grow 10%

- The worldwide IT spending is projected to total $4.5 tn

Bengaluru: Omicron will not have much impact on IT spending of Indian businesses as the overall spending is likely to be about $105.2 billion in 2022, a growth of 5.5 per cent over the last year. According to global consultancy firm Gartner, digital transformation initiatives of Indian businesses will continue despite the new Covid wave in the country.

"2022 will be a growth year as Indian CIOs accelerate their long-term digital initiatives, despite the ongoing Omicron scare in India. Gartner's 2022 Indian CIO & IT leader survey indicates increasing investment in artificial intelligence, machine learning capabilities, business intelligence and analytics, and digital business solutions," Gartner said.

Like their global peers, Indian CIOs will be challenged with skill shortage, leading to increasing dependence on external services partners. This will be one of the prime reasons to bolster spending on IT services, which is forecast to increase nine per cent from 2021.

Cloud-based software consumption will be one of the biggest contributors towards the 15 per cent growth in software segment in India, while the pent-up demand for data centre technologies will lead to four per cent for that sector in 2022, the global consultancy firm said. Globally, IT services segment, which includes consulting and managed services, to have the second highest spending growth in 2022, reaching $1.3 trillion, a rise of eight per cent from 2021. Business and technology consulting spending, specifically, is expected to grow 10 per cent in 2022, the report said. The worldwide IT spending is projected to total $4.5 trillion in 2022, an increase of 5.1 per cent from the previous year.

"2022 is the year that the future returns for the chief information officer (CIO). They are now in a position to move beyond the critical, short-term projects over the past two years and focus on the long term. Simultaneously, staff skill gaps, wage inflation and the war for talent will push CIOs to rely more on consultancies and managed service firms to pursue their digital strategies," said the report.

The pandemic has also given an impetus to the cloud market. Within the enterprise application software market, the cloud segment was larger than the non-cloud market for the first time in 2020, due in part to the pandemic. By 2025, Gartner expects the cloud market to be twice the size of the non-cloud market.