IT spending by Indian govt forecast to grow 12 per cent to $9.5 billion in 2022: Gartner

Government IT spending In India is forecast to total $9.5 billion in 2022, up 12.1 per cent from 2021, according to Gartner, Inc.

On the other hand, worldwide government IT spending, is estimated at $565.7 billion in 2022, up 5 per cent from 2021.

“The challenges posed by the pandemic has mobilised a wave of digital transformation activities in government organisations across the world,” said Daniel Snyder, director analyst at Gartner. 

“Governments are harnessing technology to streamline digital services, advance automation processes and evolve citizen experiences,” he added.

Globally, government IT spending is forecast to increase across all segments, except internal services and telecom services, in 2022.

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“Contrary to worldwide spending, all segments will experience growth in India in 2022,” said Apeksha Kaushik, principal analyst at Gartner.

Software highest growing segment in India

Software is expected to remain the highest growing segment in India, forecast to record 27.9 per cent growth in 2022, with spending expected to surpass $2 billion. It will be followed by IT services, which is expected to record 13.4 per cent growth, with spending expected to total $2.4 billion.

“Modernisation has been a longstanding objective of government organisations for more than the past decade, but the challenges posed by the pandemic has mobilised a wave of transformation activities,” the report said.

“Now, more than ever, governments are executing innovative activities by harnessing technology to streamline digital services, advance automation processes, evolve citizen experiences and build a data fabric. These investments will continue as the confluence of stimulus measures and increases in annual IT budgets at most national and state levels empowers governments to continue the existing momentum,” it added.

Telecom services growth to slow down

Telecom services is expected to record lower growth at 0.7 per cent, with spending of over one billion in 2022.

Globally as well, continuing the trend from 2021, software is forecast to record the strongest growth across all segments in 2022 at 10.4 per cent.

“As legacy modernisation continues to be a priority in government organisations, growth in the data center systems segment will continue to slow though the forecast period,” the report added.

New area of investments 

With Pay-As-You-Use gaining momentum, Anything-as-a-Service Mode (XaaS) is expected to emerge as a new area of investment, gaining popularity across government organisations.

“Gartner predicts that by 2026, most government agencies’ new IT investments will be made in XaaS solutions,” it said.

“The XaaS model for modernising infrastructure and accelerating innovation is an attractive approach to acquiring new digital capabilities and managing IT infrastructure — especially as governments face increased pressure to provide digital delivery of services, despite constrained resources,” it added.

According to Kaushik, “The pandemic has hastened public sector adoption of cloud solutions and the XaaS model for accelerated legacy modernisation and new service implementation.

“Fifty-four per cent of government CIOs responding to the 2022 Gartner CIO Survey, indicated that they expect to allocate additional funding to cloud platforms in 2022, while 35 per cent will decrease investments in legacy infrastructure and data centre technologies,” Kaushik added.

Further, mounting concerns with privacy and data protection, have fostered new regulations about the use and location of citizen data. 

“Few mission-critical solutions delivered in the cloud are increasingly sought across numerous verticals in government, including administration, tax and finance, health and human services, community development and planning, and regulatory agencies,” the report said.