CEOs see greater tech spending in 2021, economy improving: Nasscom survey

Chief executive officers (CEO) of Indian technology companies are most optimistic about the global economy, with 97 per cent believing that 2021 will be better than the “difficult year” of 2020, said a survey by Nasscom.

Indian tech CEOs demonstrated highest ever confidence in tech spending growth in 2021 as well. About 71 per cent CEOs expect global spend to grow in excess of 4 per cent, found the survey. The 71 per cent figure is significantly higher than 2020, when 59 per cent CEOs expected the year to be better and only 41 per cent CEOs in 2019 expected spends to be higher than the previous year.

The survey said that global tech spending is expected to recover, led by digital. For 2021 core tech spending growth will include 2020 drivers such as accelerated digital adoption and ‘work from anywhere’ enablement. The priority tech spending areas for 2021 being AR/VR/mixed reality, IoT, AI, Robotics and cloud. Healthcare, Telecom, BFSI and Retail Consumer are expected to spend most in 2021.

ALSO READ:

The survey covered CEOs from large and small Indian IT firms, Global capability centres (GCCs) and startups. The survey, conducted in January and February of 2021, saw responses from over 120 CEOs.

In terms of key themes for customer technology spending for 2021, the survey found that 92 per cent firms plan to increase digital tech spending. There is a clear shift in focus from legacy/cost optimization to front end customer experience. Rather 20 per cent respondents said that there is an increased focus on building comprehensive digital organizations.

“What we found is that CEOs are much more optimistic about 2021, especially compared to a difficult 2020 year. From deals perspective while the traditional large multi-year deals are still happening, what is leading the growth momentum is digital led by cloud migration,” said Sangeeta Gupta, senior VP and Chief Strategy Officer of Nasscom (National Association of Software and Service Companies).

Pandemic has also changed the top three tech priorities for 2021. Though cloud and advanced analytics continue to be the focus, cyber security is the third most important area. For the Indian IT services players cyber security as a service is an area where they seen demand rising. The global cybersecurity market is expected to grow to $282 billion by 2027.

Large digitization deals, followed by growth in core markets especially Europe and Continental Europe will drive growth in 2021. The survey pointed that digital transformation deals have seen a 30 per cent jump since the pandemic.

However, with growth coming back access to capability and right skills will need more focus matter as well. Rather 56 per cent respondents said that they will increase their hiring by 10 per cent and 39 per cent said that they will grow more than 10 per cent.

As organizations move from services to platforms, build new business models and fast track inorganic growth, new talent capabilities will be in demand. Close to 70 per cent CEOs said that they see gig worker accounting for uptp 10 per cent of workforce by 2021. With a focus on hybrid work models, 70 per cent CEOs expect remote workers to constitute 50 per cent of workforce.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor