Enterprise application software spend to grow 15% YoY in 2022 : Gartner report

In a moment of cheer for software-as-a-service (SaaS) and Information Technology (IT) services companies amidst margin pressures, end-user spending on enterprise application software in India is expected to reach a total of $4.7 billion in 2022, an increase of 14.8 percent from 2021, according to Gartner’s forecast.

Applications here refer to digital operation tools needed for maintaining the quality of customer service, like supply chain management (SCM), supply chain execution (SCE) and customer relationship management (CRM).

These will see increased spending as organizations look to address complex supply chains and volatile marketplaces, and more effectively adapt to change and disruption.

According to Gartner’s report, spending on CRM software is expected to grow 18.1 percent in 2022, while SCM software spending will increase by 10.2 percent. Likewise, core financial and planning tools will see increased spending as companies look to improve their ability to manage cash and ensure a firm financial foundation upon which to grow.

Neha Gupta, vice president analyst at Gartner said, “Driven by the digital transformation agenda, Indian enterprises will continue to expand the share of software spending in their broader IT spending. Organizations are increasingly relying on software to operate all aspects of business.”

Indian businesses are also expected to increase spending on email, authoring and content services to continue to support collaboration and remote/hybrid work. A large portion of pandemic-related spending in these two markets occurred in 2020, causing a large peak that, while still growing, has slowed spending for the next few years, the report said.

This is in line with the projections of IT industry analysts, who expect client companies to continue spending on their digital transformation projects as technology budgets are fast becoming non-discretionary spend and a necessity to keep businesses afloat and growing.