Indian IT Continues To Shine Bright

Globally, every major economy is going through a challenging phase. Geopolitical tensions, tightening monetary conditions and runaway inflation are some of the major challenges. However, while almost every significant country is slowing down in terms of economic growth, India’s growth is strong and it is in a relatively better position than other countries. This has prompted even the IMF to say that ‘India was the bright spot on the dark global horizon’.

For the Indian IT sector, though there are some temporary headwinds, in the long-term, the growth outlook remains to be strong. For the record, according to NASSCOM, the Indian technology industry crossed the $200 billion revenue mark, reaching $227 billion revenue in FY 2022, witnessing a $30 billion in incremental revenue in the year with an overall growth rate of 15.5 per cent. NASSCOM says that India’s digital infrastructure has clearly acted as a strong digital foundation and has played a key role in driving India’s technology adoption with public digital platforms such as Aadhaar and UPI becoming the bedrock of India’s digital advantage.

Recession proof

The last two years have showed how the Indian tech sector rapidly innovated to win the trust and confidence of its clients. From hybrid operating models, to bringing out new innovative solutions to using newer means of collaboration, the Indian IT sector pulled off all its aces to deliver value and record excellent growth.

In fact, whether it was in 2000, when the seeds of the Indian IT services industry were sown due to the Y2K crisis to the 2008 financial crisis to the more recent Covid-19 crisis, every major crisis has shown that the demand for quality solutions recovers strongly after a temporary subdued phase and goes on to grow at an even faster pace. Today, even as the global economies face challenges of recession, it only improves the probability of more work coming to Indian IT firms due to India’s traditional advantages of cost, quality and availability of skilled talent. To its credit, the Indian IT industry has consistently innovated by investing in processes and emerging technologies that could help it maintain its strategic advantage in the marketplace.

Moreover the domestic demand for tech solutions continues to be robust and despite the looming tensions, software spend is expected to grow at 13.7 per cent in 2023 according to Gartner. The pandemic kickstarted a slew of digital transformation initiatives designed to help organisations stay

competitive. Many of these are still underway and while there may be some reprioritisation in projects due to headwinds, it is unlikely to see major cuts considering their long-term benefits. Industry leaders have understood that they need to keep investing in forward looking technologies. AI and analytics for example are a great bet as more enterprises will need rich insights from their data. Our experience of working with customers during the pandemic has clearly shown that data-driven insights can equip organisations to be more agile to adapt to changing scenarios as well as be more resilient. Governments too are taking decisive steps to invest and improve skillsets in emerging technologies. A case in point is the decision made by the Government of Rajasthan to invest Rs 200 crore to set up the Rajiv Gandhi Centre for Advanced Technology in partnership with SAS India. This initiative hopes to prepare young job seekers for the future by equipping them with the required skills that are critical in an increasingly digital economy. SAS has also collaborated with noted institutions such as IIT Kanpur, Dhirubhai Ambani Institute of Information and Communication Technology (DA-IICT), NMIMS, Goa Institute of Management, to upskill working professionals and students for the future.

Owning the next decade

If India hopes to maintain its competitive advantage over other emerging competitors, it has to continue to invest in new areas such as Cloud, Analytics, Customer Experience and AI. Gartner expects digital business initiatives such as experiential end-consumer experience and optimisation of supply chain to push spending on enterprise applications and infrastructure software into double-digit growth in 2023. From our perspective, we are seeing early adoption in cloud-based advanced analytics. The cloud is also a huge area of interest for almost all sectors, and today, almost every industry is looking at deploying at least some part of their ecosystem on the cloud. Governments in India are pivoting from traditional ways and are increasingly using emerging technologies to improve the quality and access for citizen services. One of the best examples is the state of Odisha, which used advanced analytics from SAS, during the peak of the Covid-19 pandemic to contain the virus and save precious lives. Data is the heart of every initiative, and if leveraged appropriately through the use of analytics and AI, then the results could be extraordinary.

Today, India has the right ecosystem, and if nurtured well, can catapult Indian IT to a different level. Digital adoption across sectors continues to be high, and investments by companies in the latest technologies (cloud, AI, analytics) is increasing at a fast pace. Overall, Indian IT will continue to be resilient, as the country will look at investing more in the latest technologies, to improve efficiencies and catapult growth.

In conclusion, every crisis has proven to be a silver lining for the Indian IT sector, and has typically created more business opportunities and expanded the overall market. This time too, we believe that the Indian IT industry has the opportunity to go on an even higher trajectory on wings that are fortified by emerging technologies such as cloud, AI and analytics.