While investments in artificial intelligence (AI) and generative AI (GenAI) will contribute to IT spending growth in India, their impacts on IT spending levels will not be evident until 2025. “GenAI will account for a small portion of IT spending through 2024,” said Naveen Mishra, VP, Team Manager at Gartner.
“Indian organizations are expected to make investments in AI and automation during this time, as a strategic effort to improve operational efficiency and address the ongoing shortage of IT talent. However, it is not until 2025 that GenAI will begin to carve its place in IT budgeting amongst Indian organizations.”
Impact of Digital Priorities on Software and IT Services Spending
“As Indian organizations accelerate the adoption of digital technologies such as AI, machine learning, secure access service edge (SASE), there will be a greater implementation of cloud services, resulting in growth for both software and IT services,” said Mishra. “The lack of internal skills within Indian businesses will also contribute to the growth of IT services spending in 2024.”
Spending on software and IT services is projected to experience the highest annual growth rates in 2024 in India with software spending expected to increase 18.5% and IT services forecast to grow 14.6 (see Table 1).
Table 1. India IT Spending Forecast (Millions of U.S. Dollars)
Despite facing a sluggish phase in 2022 and 2023, primarily due to inflationary pressures, devices spending in India is projected to witness a strong resurgence in 2024, growing 10.1% year-over-year. “The double-digit growth can be attributed to Indian consumers’ willingness to pay a higher price for better experience when upgrading to new smartphones,” said Mishra.
Define Your AI Ambition and Become AI-Ready
In the future, as GenAI continues to present unique opportunities for organizations and become part of IT budgets, CIOs and IT leaders must define their organization’s AI ambition by examining the opportunities and risks of using GenAI in four areas: the back office, the front office, new products and services, and new core capabilities.
Additionally, CIOs and IT leaders must be able to navigate decisions about AI within their organizations by having lighthouse principles — a vision for AI that lights the way and says what kind of human-machine relationships they will and will not accept.
However, few organizations have established lighthouse principles or even a clear vision for AI. A Gartner survey in June 2023 of 606 CIOs and technology leaders found that only 9% of organizations have an AI vision statement in place, and more than one-third of respondents had no plans to create an AI vision statement.
To facilitate swift and safe adoption of generative AI in the next 12 months, organizations must do three things:
· Establish AI-ready principles: Lighthouse principles must align with the values of the organization. The organization’s values must be the guiding light for navigating the unknowns of how humans and machines will interact.
· Make data AI-ready: For data to be AI-ready, it must meet five criteria. It is secure, enriched, fair, accurate and is governed by the lighthouse principles.
· Implement AI-ready security: For every positive use of AI, someone is putting that same technology to negative use. This is the dark side of AI. CIOs should prepare for new attack vectors and work with the executive team to create an acceptable use policy for public generative AI solutions.
Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of the sales by over a thousand vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.
The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across the hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast research is available to Gartner clients in “Gartner Market Databook, 3Q23 Update.”
