India’s IT Spending Hits $44 Billion

Generative AI (GenAI) will continue to accelerate AI adoption in India with more leading organisations exploring or investing in GenAI use cases…reports Asian Lite News

IT spending in India for 2024 is expected to grow 11 per cent year-on-year (YoY), reaching $44 billion, an International Data Corporation (IDC) report said on Thursday.

As India’s digital economy continues to thrive in 2024 and beyond, IDC expects IT spending in the country to accelerate at a Compound Annual Growth Rate (CAGR) of 9.9 per cent over the coming years to cross the $59 billion mark in 2027, with the software market consistently showing double digit growth across the forecasted years.

Generative AI (GenAI) will continue to accelerate AI adoption in India with more leading organisations exploring or investing in GenAI use cases.

As technology leaders realise AI’s pivotal role in their digital-first strategies, the report forecasts that investments on GenAI by 2027 will be 26 per cent of the overall AI spend in the country or a CAGR of 101.6 per cent.

“India Inc.’s shift to digital continues unabated as enterprises march aggressively towards an ‘AI Everywhere’ future. We can clearly see this in the growth of AI investments from Indian enterprises,” said Vasant Rao, Managing Director, IDC India and South Asia.

In 2023, despite economic headwinds and uncertainty, Indian enterprises continued to invest in digital technology to increase customer engagement and satisfaction, launch new products and services, and improve operational efficiency to drive revenue growth and profitability.

“They allocated their budgets mainly to software, application development and Cloud migrations, a reflection of their judiciousness to make their hardware assets work longer and elongating refresh cycles,” the report noted.

Meanwhile, about 95 per cent of Indian CIOs believe that the adoption of Artificial Intelligence (AI) is key for business in 2024, according to a report on Thursday.

The report by International Data Corporation, commissioned by Lenovo surveyed over 900 CIOs, including more than 150 in India.

It reveals that organisations in Asia-Pacific are planning to increase AI spending by 45 per cent in 2024 compared to 2023.

“CIOs in India are most confident about AI, with 95 per cent expressing certainty that it will create a competitive advantage, and 57 per cent of them consider it to be a game changer for their organisations,” said Amit Luthra, MD -Inid India, Lenovo ISG, in a statement.

“Higher investments in GenAI and machine learning followed by deep learning systems, underscore their desire to elevate operational efficiency, security, decision-making processes, and customer experiences,” he added.

Further, a key trend for Indian CIOs in 2024 includes investments in GenAI (28 per cent). The report showed that AI has significantly influenced top technologies including cybersecurity and threat detection, intelligent automation and robotics, and automation for enhanced efficiency in the country.

However, adoption challenges such as high dependence on third-party support (55 per cent) and security (51 per cent) were found as top concerns for Indian CIOs. Some were also concerned over job security (62 per cent) as well as lack of adequate IT support in automation deployment (64 per cent).

The report also showed that 84 per cent of CIOs in India are already using AI to enhance their security framework with 14 per cent planning to invest.

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