End-user spending on public cloud services in India is forecast to total $4.1 billion in 2021, an increase of 29.4% from 2020, according to the latest forecast from Gartner, Inc.
Analysts discussed the outlook for the Indian IT market during Gartner IT Symposium/Xpo India, which is taking place virtually through Wednesday.
“The onset of the COVID-19 pandemic was the starting point of the Cloud 2.0 era,” said Sid Nag, research vice president at Gartner. “Indian enterprises were not ready for the large scale of remote work. However, public cloud delivered on its promise of scalability, cost efficiency and business resilience for Indian enterprises during this critical time in 2020. As digitalization efforts further evolve in the country, public cloud will become a must have technology for Indian enterprises.”
In 2021, spending on managed services and cloud infrastructure will make up 8% of total IT spending in India. The low cost of entry provided by public cloud services will be a big influence on Indian CIOs to increase their spending on this technology in the price sensitive market.
Although the cloud application services (SaaS) segment is forecast to be the largest segment in the public cloud services market in India in 2021, cloud system infrastructure services (IaaS) will experience the largest growth at 44.6% (see Table 1.)
Indian enterprises are at an early stage of cloud adoption as compared to their global counterparts. The COVID-19 pandemic accelerated their cloud adoption rate significantly as Indian CIOs migrated from legacy systems to public cloud services to maintain business continuity and resilience through 2020. Indian enterprises moved critical business applications such as email, web hosting, customer relationship management (CRM), enterprise resource planning (ERP) and human resources (HR) to the cloud, ensuring employees can access them anytime and from anywhere in the world, as long as they have internet access.
“While end-user spending on cloud in India is increasing, there is a long road ahead for Indian enterprises to achieve the same market maturity as the U.S. or Europe. India-based organizations and their CIOs need to focus on the cultural shift that will make them cloud-ready and give them a competitive edge,” said Mr. Nag.
The recent investment by hyperscalers, such as Amazon Web Services, Google Cloud and NTT, in India further testify the opportunities for public cloud to grow in this market.