29 Jun 2020
Posted in Coronavirus
COVID-19 to affect enterprise ICT spending in India, says GlobalData
With enterprises in India looking to contain costs, defer all capital expenditure on non-critical ICT spending and hold-off their long-term digital transformation initiatives until at least next year amid the COVID-19 pandemic scenario, the market for the information and communications technology (ICT) services – hardware, in particular, is set to fall in 2020, according to GlobalData, a leading data and analytics company.
An analysis of GlobalData’s Market Opportunity Forecasts Model reveals that ICT spending in India is estimated to register 7.2% year-on-year decline to reach US$102bn in 2020, against the initial estimated growth of 6.7% before the COVID-19 outbreak.
Rohit Sharma, Senior Technology Analyst at GlobalData, comments: “ICT spending across all infrastructure segments – hardware, services and software – is projected to fall in India in 2020. However, public cloud will be one of the few segments to show growth, with the market expected to grow over 2019. Enterprises in India are expected to continue to invest in cloud, as cloud-based applications and storage options offer strong business continuity from an operational perspective.”
The silver lining in the cloud is that the lockdown is expected to accelerate the digital transformation of verticals such as education, healthcare and utilities over the next four years. Demand for tele-health, smart chatbots, delivery apps, and distance-learning education software is projected to rise during the forecast period 2019-2024.
The demand for software is set to fall due to the impact of the COVID-19 pandemic, with enterprises delaying the roll-out of applications in 2020. Almost all ICT products/solutions’ revenue is expected to witness reduced demand in 2020, as compared to the high growth projections before the outbreak.
The market for Enterprise Social Networking and Collaboration Platforms is, however, estimated to increase by 17.5% in 2020, owing to the increased demand for collaboration from remote workers.
Looking at the sector-wise implications of the COVID-19 pandemic, spending across travel and leisure, transport and logistics, and manufacturing will bear the maximum brunt of the COVID-19 impact in 2020. The BFSI sector, which accounted for 13.5% of the overall ICT spend in 2019, will also witness a 6.4% decline in ICT spend in 2020.
Sharma concludes: “The imminent need for remote and secure accessibility has increased the adoption of cloud-based solutions across organizations in the country. Despite the significant impact of the outbreak on the ICT spending, the COVID-19 pandemic will ultimately create new opportunities for the ICT vendors by providing them with new use cases in AI, analytics and automation.”