Indian IT services market grew 7.3% in H1 of 2021: IDC report

The IT and business services market will see growth in the coming cycles due to the revival of the economy and ever-increasing spending in areas such as cloud, security and artificial intelligence. The IT and business services market is projected to reach $19.93 billion by the end of 2025, growing at a CAGR of 8.2% between 2020-25.

IDC classifies the IT and business services market into three primary markets – project-oriented, managed services and support services. For the first half of 2021, project-oriented services registered the highest growth rate of 7.2%, followed by managed services at 6.2% and support services at 5.3%.

The Indian IT and business services market was valued at $6.96 billion and registered a growth of 6.4% year-on-year during January-June, 2021 as compared to 5.1% in the same period last year. The increase in the growth rate was mainly due to the continued focus on digital transformation initiatives by the enterprises in the country.

“Despite the harsh second wave of the COVID-19 pandemic, enterprises continue to invest in digital transformation initiatives to address changes in business model, streamline operations, enhance customer and employee experience, and improve overall resilience. Verticals such as government and manufacturing, which delayed IT investments in 2020, increased their IT spending in H1 2021, and enterprise in the country on IT service providers for solutions in areas such as cloud, security, artificial intelligence, analytics, etc. fast dependent. Harish Krishnakumar, Senior Market Analyst, IT Services, IDC India said.

In H1 2021, hosted application management and hosted infrastructure services continued to register the highest growth rates as many enterprises continued to migrate their applications to the cloud. Offerings such as systems integration and network consulting integration also saw increased demand, as enterprises increased their investments in application modernization and network transformation initiatives during this cycle.

“H1 2021 proved to be a year that strengthened enterprise resilience at a remarkable pace. Most enterprises saw a boom in business with pre-pandemic conditions. While larger enterprises continued to make long strides towards transformation initiatives, Shweta Baidya, Senior Research Manager, Enterprise Software and ICT Services, Mid-market, IDC India, said, “This segment has adopted a cautious approach towards technology investments with a focus on investments, whether in the form of customer acquisition, talent retention or financial returns. Provides quick returns.