India’s IT services market grew 6.1 percent year-on-year (year-on-year) to $14.5 billion in 2023, despite a slower recovery in IT investments, a new report showed on Monday.NEW DELHI: India’s IT services market grew 6.1 percent year-on-year (year-on-year) to $14.5 billion in 2023 despite a slower recovery in IT investments, according to a new report on Monday.
While IT investments showed a slower recovery compared to the previous year, digital transformation (DX) initiatives and the increasing complexity of IT environments will continue to drive market growth, according to an IDC report.
While 2023 saw a slowdown in IT investments, 2024 will be all about growth, fueled by digital transformation (DX).
“The increasing complexity of IT ecosystems – bringing together on-premise, private and multi-cloud environments – along with rising demand for AI and GenAI solutions, stronger security measures and automation, will drive the market forward,” says Neha Gupta, senior research manager, software and IT services market, IDC India.
Service providers are at the heart of this evolution, enabling companies to manage complex infrastructures, deploy AI responsibly and deliver enhanced customer experiences, said Gupta.
According to the report, leading technology companies benefited from increased digital spending by enterprises in India, resulting in significant revenue growth. Performance was supported by strong demand for cloud, AI, security and application modernization, with notable success in the government sector, telecom and manufacturing verticals.
India-based companies prioritized strong analytics, automation and cognitive capabilities, including GenAI, from their next generation IT service partners.
“In today’s digital business environment, technology providers must be forward-thinking innovators, using technology to create new digital value and keep their customers ahead,” said Gupta.
According to the report, the GenAI solutions market is experiencing a surge, which presents numerous opportunities for vendors, especially in productivity-related use cases such as report summarization, job description generation, and code creation.
The market is expected to evolve and initially focus on business function use cases, integrating AI models with business data for specific functions such as marketing, sales, service and purchasing.
