The impact of the coronavirus (COVID-19) pandemic had not only brought the global economy to a standstill but set the clock backwards on the developmental progress of several nations. While the rate of infection in India did not appear to be as high as in other countries, precautionary measures adopted dealt a severe blow to the country’s major industries, including finance, real estate & professional services bearing the largest brunt at an estimated loss of 17.3 percent. However, IDC’s new research report shows that India’s IT and business services market is gradually getting back into the track. The report says, India’s IT and business services market is expected to grow 5.4 percent annually to reach $13 billion by December this year. According to the report, the segment grew 5.3 percent year-on-year (YoY) in January-June (H1) 2020 period as compared to 8.9 percent growth in H1 2019.

Of the IT and business services market, the IT services market contributed 77.4 percent in H1 2020, growing 5.9 percent YoY as compared to 9.3 percent growth in the year-ago period. “IT services market will begin picking up momentum gradually from 2021 onwards and is projected to grow at a CAGR of 7.2 percent during 2019-2024, to be valued at $13.4 billion by the end of 2024,” the report stated. This reduced rate of growth in the IT services market in India is due to the COVID-19 pandemic, IDC added.

“During H1 2020, 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 video-conferencing) and cloud infrastructure,” IDC

IT services market will begin picking up momentum gradually from 2021 onwards and is projected to grow at a CAGR of 7.2 percent during 2019-2024, to be valued at $13.4 billion by the end of 2024

said. Owing to increased demand for VPN licenses and requirement for higher network connectivity, network services witnessed higher adoption, it added.

“In H1 2020, the role of IT services vendors gained higher prominence, as organizations increasingly approached them to help ensure business continuity by putting in place various technologies, solutions, best practices and frameworks,” stated Garima Goenka, Market Research Analyst, IDC.

During these difficult times, organizations were investing higher in collaboration applications, VPN licenses, endpoint devices, cybersecurity solutions, cloud, artificial intelligence, and automation. “Apart from just ensuring business continuity, the role of IT service providers have also been towards helping organizations to achieve a higher degree of tech resilience, adaptability” she said.

Garima noted that vendors have launched AI-based applications to help the government and healthcare sectors to provide citizen services and answer COVID-19 related queries, and for organizations to ensure safe and secure return of their employees to the workplace.

“IT investments across all the major sectors such as BFSI, healthcare, telecom, IT/ITeS, government and manufacturing increased considerably to improve overall experience and maintain business continuity and resiliency,” stated Shweta Baidya, Senior Research Manager, IDC. She added that the government also relaxed some of the stringent guidelines that provided increased flexibility with respect to work from home/anywhere policies.