Key Points
India attracts massive $60 billion investment in data centre market
GenAI driving software and hardware spending growth
Double-digit expansion expected across IT segments
Accelerated servers becoming critical for AI workloads
Software and IT services are major drivers of IT spending growth in India, increasing 16.9 per cent and 11.2 per cent in 2025, respectively.
“While software spending is propelled by the price premium of GenAI-enabled solutions, IT services spending is fueled by enterprises’ need for cloudification, digitization, and consulting services,” said said Naveen Mishra, VP Analyst at Gartner.
India’s data centre market has attracted $60 billion from both domestic and international investors between 2019-2024, and is reportedly expected to surpass $100 billion in cumulative investment commitments by the end of 2027, according to another report by real estate consultant CBRE South Asia last month.
Segments including data center systems, devices and software will see double-digit growth in 2025, largely due to generative AI (GenAI) hardware upgrades, according to Gartner.
However, these upgraded segments will not differentiate themselves in terms of functionality yet, even with new hardware.
“Enterprises are investing in AI-ready infrastructure for targeted use cases,” said Mishra. The emphasis on accelerated servers for AI workloads is a significant driver, resulting in increased end-user spending in this segment in 2025 compared to the previous year.
Meanwhile, worldwide IT spending is expected to reach $5.61 trillion in 2025, an increase of 9.8 per cent from 2024.
“While budgets for CIOs are increasing, a significant portion will merely offset price increases within their recurrent spending,” said John-David Lovelock, distinguished VP analyst at Gartner.
By 2026, over 50 per cent of software spend within application software will be influenced by GenAI.
As enterprises focus on developing and enhancing technological frameworks for AI, investment in tools and platforms for deployment, management, and scaling will increase, added Mishra.
