Tech sector got COVID-19 ‘windfall’ of $100 billion: HFS Research

The global IT and Business Process Management industry might have already seen a COVID windfall of $100 billion and Indian tech providers may have captured more than 50% of it, as per London-based HFS Research.

“The pandemic has no doubt accelerated tech adoption. We can attribute about $100 billion in additional IT/BPM expenditure by industries as a result of COVID. Over half of it may be going to Indian heritage providers,” Phil Fersht, CEO, HFS Research, told The Hindu,

According to Nasscom, the industry was growing at 6-7% pre-Covid. This year, growth is estimated to double, even as post-pandemic business acceleration and quantum revenue growth are already visible. “We will add an additional $8 billion-$10 billion this year,” said Sangeeta Gupta, senior VP and chief strategy officer, Nasscom. “Some $10 billion extra revenues over what we were doing pre-Covid, is a lot of business in FY22.”

The tech industry globally has been talking about pandemic-induced digital acceleration. In fact, many CEOs, CTOs, CMOs, CSOs have been saying that year 2020 alone brought in 10-year growth in terms of digital adoption and acceleration.

“However, enterprises are unwilling to break down these incremental revenues, although they are happy to attribute their incremental digital revenue growth to tech spends spurred by the pandemic,’‘ said another analyst, who does want to be named.

The start of the year (2022) would be a little slower than expected for Indian IT as Omicron has created some uncertainty and slowed down several deal completions, but it would pick up strong momentum mid-quarter, said Mr. Fersht.

Although Nasscom does not give out any industry growth projections, as per many independent analysts, Indian IT, at this pace of growth, would cross the $300 billion mark by 2025, from the current $190 billion.