End User Spending on Application Software to Grow by 15% in 2022: Gartner Forecasts

India’s end-user spending on enterprise application software is estimated to reach $4.7 billion in 2022, an increase of 14.8% from the previous year, according to Gartner forecast. Led by digital transformation agenda, Indian enterprises will grow the share of application software spending in their more expansive IT spending.

Applications required for keeping the quality of customer service – like supply chain management (SCM), supply chain execution (SCE), and customer relationship management (CRM), will see increased spending as companies look to manage complex supply chains and volatile marketplaces and more effectively adapt to change and disruption.

Spending on CRM software is forecast to grow 18.1% in 2022, while SCM software spending will increase 10.2% (see Table 1). 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, VP 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”.

However, the growth in software spending will be lower in 2022 than in 2021. “The volatile global macroeconomic situation has increased business uncertainty. Organizations will continue to put new long-term projects on hold selectively and cut the scope of high-cost projects and instead look to “quick win” projects that either have a shorter return on investment (ROI) or provide a competitive edge,” said Gupta.

Indian companies will also boost their spending on email, authoring, and content services to continue supporting collaboration and remote/hybrid work. A large portion of Covid outbreak related spending in these two markets appeared in 2020, causing a prominent peak that, while still expanding, has slowed budget spending for the next few years.