Service providers playing a vital role in ensuring business continuity among enterprises.
In 2020, the Indian IT & Business Services market was valued at USD 13.41 Billion and recorded a 5.41 per cent year-over-year (YoY) growth as compared to 8.43 per cent in 2019, according to the International Data Corporation ‘s (IDC) Worldwide Semi-annual Services Tracker.
The reduced growth rate is due to the impact of the COVID-19 pandemic on businesses in the country, of the IT & Business Services market, the IT Services market contributed 77.06 per cent and grew by 5.97 per cent in 2020 compared to the 8.91 per cent growth in 2019.
According to IDC the IT & Business Services market will begin picking up momentum gradually from 2021 onwards due to increased spending in areas like cloud, application modernization, artificial intelligence, automation, etc. The IT & Business Services market is projected to grow at a CAGR of 7.18 per cent between 2020-2025 and reach US$18.97 billion by the end of 2025.
Enterprises across all sectors started investing in digital transformation as the pandemic made it evident that businesses with higher digital adoption would fare better than ones with traditional IT systems, said Harish Krishnakumar senior market analyst IT Services at IDC India.
“During the second half of 2020, apart from cloud adoption and IT security, enterprises also started to increasingly invest in technologies like artificial intelligence, machine learning, and analytics for solutions like conversational AI and Chatbots, fraud prevention, demand forecasting, etc., which would help streamline their business operations,” said Krishnakumar. “Even sectors like manufacturing, which was adversely affected during the initial stages of the pandemic, started investing in cloud-based applications and automation projects.”
IDC classifies the IT & Business Services market into three primary markets – Project-Oriented, Managed Services, and Support Services. For 2020, managed services segment registered the highest growth rate at 6.85 per cent, followed by project-oriented services at 5.92 per cent, and support services at 4.51 per cent, respectively.
In 2020, hosted application management and hosted infrastructure services witnessed a higher growth as many enterprises continued to migrate their applications to the cloud. The growth is also attributed to the increase in demand for cloud services driven by the rise in remote working, online classes, and online streaming because of the COVID-19 pandemic.
Last year, 2020 pushed enterprises to focus on survival and business continuity strategies through cost takeout and cost optimisation initiatives, the year 2021 will pave the way for business resiliency plans to kick-in and accelerated investments in technologies to support an enterprise’s digital goals, said Shweta Baidya senior research manager Enterprise Software and ICT Services at IDC India.
“Some of the areas where IDC envisions clear opportunities for service providers include cloud enablement and augmentation services, network management, optimization and automation, managed security services, and AI-based services, among others,” said Baidya.
With a large part of the workforce being out of action during the second wave of the pandemic, enterprises will look up to their service partners to enable digital transformation initiatives and prepare them to be a future-ready enterprise.”
Tags: IDCIT services
