Digital Services Will Account For 50% Of The Indian IT Industry Revenue By 2026 [Report]

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The Indian IT industry is all set to accelerate growth over the next five years!

According to a soon-to-be-released report by McKinsey & Company, the country’s $194 billion Information Technology industry is expected to be touching the $300-350 billion revenue mark over the next 5 years, growing by a rate of 10% every year.

The highlights of the report which was presented on Thursday at the annual Nasscom Technology and Leadership forum hinted that the growth of the Indian IT industry will be primarily driven by digital services which currently accounts for 30% of the industry revenue.


Now, over the upcoming five years, the share of digital services is being pegged to increase all way up to 50% totalling $170-$200 billion of revenue for the IT industry in India.

Chairman of Nasscom, UB Pravin Rao, in a statement about the growth of IT, mentioned how the world is clearly pivoting into a ‘hyper-digital world’ and thus it will have several implications on technology providers as well 

Rao, who is the COO of Infosys as well, further said that 20%-30% of Infosys’s revenue is coming from digital and the industry has definitely seen quite a bit of acceleration which will continue into the future given the pandemic-affected situation.

The McKinsey & Company report also mentioned that the Indian IT industry, to achieve the expected growth will need to undertake ‘multiple concerted actions’. This must include investment by the service provides in both building and scaling digital technologies which in turn will help them create different and scalable offerings at a global level along with reskilling the workforce in emerging tech domains such as cybersecurity, enterprise SAS ecosystem, data, artificial intelligence, 5G, IoT, product engineering and more.

Senior Partner at McKinsey & Company Noshir Kaka said Indian IT industry clients are of the view that technology is a primary factor which will lead their recovery from the COVID-19 pandemic slump. Thus, it is being believed that technology spending will revive and bounce back faster than it has ever done before from previous similar crises.


He also added that the bounce back is already visible in terms of actual work incoming in the order book of all industry participants.

Furthermore, the report revealed that one of the biggest trends which will definitely shape the future of technology will be the ‘tech intensity’ revenue increasing from 3% to 5%. What does it mean?

Well, it basically refers to the assumption that digital natives, in the next five years, will account for 75% of enterprise tech spending. 

Tech has become an accelerator in fundamental shifts in business models worldwide, something which the IT industry needs to take note of according to the report. The first change is – direct to consumer and the second is ecosystems. Now, going forward, these new business models are expected to account for close to a whopping $15 billion opportunity for service providers.


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