India IT spending to reach $110.3 bn in 2023 amid global slowdown

The India IT spending is estimated to grow 0.5 per cent in 2023, totaling $110.3 billion which is up from $109.7 billion in 2022, a report showed on Wednesday.

Globally, IT spending is projected to total $4.5 trillion in 2023, an increase of 2.4 per cent from 2022 — down from the previous quarter’s forecast of 5.1 per cent growth, according to the latest forecast by Gartner.

While inflation continues to erode consumer purchasing power and drive device spending down, overall enterprise IT spending is expected to remain strong.

“While inflation is devastating consumer markets, contributing to layoffs at B2C companies, enterprises continue to increase spending on digital business initiatives despite the world economic slowdown,” said John-David Lovelock, a distinguished VP analyst.

A turbulent economy has changed the context of business decisions and can cause CIOs to become more hesitant, delay decisions or reorder priorities.

“We’ve seen this in action with the reshuffling taking place among some B2B companies, especially those that overinvested in growth. However, IT budgets are not driving these shifts, and IT spending remains recession-proof,” Lovelock added.

The software and IT services segments are projected to grow 9.3 per cent and 5.5 per cent in 2023, respectively.

The devices segment is forecast to decline 5.1 per cent this year as both consumers and enterprises lengthen device refresh cycles.

Job vacancy rates have been increasing every quarter and the open jobs per unemployed rate is at record lows in many countries.

High competition for talent is challenging CIOs to hire skilled IT staff, limiting growth for companies who struggle to scale without the requisite talent, said the report.

“Skilled IT workers are migrating away from the enterprise CIO towards technology and service providers (TSPs) who can keep up with increased wage requirements, development opportunities and career prospects,” said Lovelock.

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