The India IT and Business Services market grew by 5.3 per cent year-over-year (YoY) in the first half (1H20) (January to June 2020), as compared to the 8.9 per cent growth in the first half, 2019, according to the International Data Corporation′s (IDC) Worldwide Semiannual Services Tracker - first half, 2020.
Of the IT and Business Services market, the IT Services market contributed 77.4 per cent in 1H20 and grew by 5.9 per cent year-over-year (YoY) in 1H20 compared to the 9.3 per cent growth in 1H2019. IDC forecasts that the IT and Business Services market is expected to grow annually by 5.4 per cent to reach USD 13 billion by December 2020, according to an official release.
"In 1H20, the role of IT Services vendors gained higher prominence, as organisations increasingly approached them to help ensure business continuity by putting in place various technologies, solutions, best practices and frameworks. During these difficult times, organizations were investing higher in collaboration applications, VPN licenses, endpoint devices, cybersecurity solutions, cloud, AI and automation," said Garima Goenka, Market Analyst, IT Services, IDC India.
Further, as per IDC, the IT Services market will begin picking up momentum gradually from 2021 onwards and is projected to grow at a CAGR of 7.2 per cent between 2019-2024, to be valued at USD 13.4 billion by the end of 2024. This reduced rate of growth in the IT Services market in India is due to the COVID-19 pandemic.
IDC classifies the IT Services market into three primary markets - Project-Oriented, Managed Services and Support Services. For 1H20, project-oriented services registered the highest growth followed by managed services and support services, respectively.
During 1H20, application hosting services and infrastructure hosting services continued to be higher growth markets on account of increasing adoption of cloud applications (majorly collaboration applications and videoconferencing) and cloud infrastructure. Owing to increased demand for VPN licenses and requirement for higher network connectivity, network services witnessed higher adoption.
"Enterprises strongly felt the need for advisory and support services to propel their digital journey amidst the pandemic. As a result, IT service providers witnessed a strong surge in demand for various services such as systems and network management, IT Consulting, hosting application management and hosting infrastructure services, among others," said Shweta Baidya, Senior Research Manager, Enterprise Software and ICT Services, IDC India.
The government also relaxed some of the stringent guidelines that the IT sector had to adhere to, prior to COVID-19. The new rules provide increased flexibility with respect to work from home/ anywhere policies and have also modified some of the existing guidelines to augment the growth in the sector, she added.