India Inc’s tech spending growth rate bounces back: SalesEdge

The total spending on technology by Indian companies that had lost some pace during the recent past, has seen an uptick with the growth rate accelerating to nearly 15% for the year ended March 2024, as per data collated by the technology sector database SalesEdge, a sister unit of Techcircle.

The data captures the tech spending profile of 96,500 companies including 91,786 private firms.

The uptick comes as enterprises navigate the digital terrain to strengthen their businesses and is also testimony to the sector's critical role in enabling growth and innovation. Enterprises investing in digital transformation to enhance efficiency, customer experience, and competitiveness, cloud adoption, cybersecurity, and remote work, among other things, are the reasons for the rise in IT spending.

While expenditure on software continues to grow the fastest, services is not far behind and retains the tag of being the biggest component of tech spending in the country.

Spending on hardware, on the other hand, has seen growth remain slow rising in single digit for the third straight year.

As a consequence, the contribution of hardware in total IT spending that was around 38% pre-pandemic has shrunk to 30% by FY24. While services has maintained its proportion at around 40-42%, software spends has gained big time from 20% to 28% last year.

If the recent trends continue, software spends in India may overtake hardware expenditure in the current financial year.