In its latest forecast, the International Data Corporation (IDC) projected a notable 11 per cent year-on-year increase in IT spending within India, reaching a significant milestone of $44 billion by the end of 2024. Despite facing economic challenges and uncertainties, Indian enterprises remained steadfast in their commitment to digital transformation throughout 2023. This strategic investment was instrumental in enhancing customer engagement, launching innovative products and services, and streamlining operational efficiency, ultimately driving revenue growth and bolstering profitability. However, the bulk of organisations’ budget allocations were directed towards software, application development, and the migration to cloud platforms.
Looking ahead, IDC anticipates a robust acceleration in spending, projecting a compound annual growth rate (CAGR) of 9.9 per cent over the next several years, propelling IT expenditure to reach a staggering $59 billion by the year 2027. The software market is poised for sustained growth, demonstrating consistent double-digit expansion across the forecasted period.
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Furthermore, IDC forecasts a significant uptick in the adoption of generative AI technology across the country. With more organisations exploring or actively investing in various use cases, investments in generative AI are expected to comprise 26 per cent of the overall AI expenditure in India by 2027. This sector is projected to experience an impressive compound annual growth rate of 101.6 per cent, reflecting the growing significance and potential of AI-driven innovations in the Indian market landscape.
According to an Indian Express report, Steven Frantzen, Head of WW Strategy and Senior VP & Regional Managing Director (EMEA), in a press release said, “Even with economic headwinds and uncertainty in 2024, we anticipate that global ICT spending will expand by more than 6 per cent (3x of projected GDP growth), as we enter a new era of accelerated digital innovation, driven in part by greater investment in automation and generative AI.”