IT companies are expected to benefit as enterprise clients continue to pursue digital strategies next year. Businesses across sectors are likely to invest in technologies that would help them optimise costs and drive efficiencies in the face of an impending global economic downturn.

“Companies are continuing to double down on digital strategies, which have become essential to have a competitive edge and remain relevant to their customers. At the same time, they are keeping a close tab on macroeconomic and geopolitical developments and, where necessary, re-prioritising initiatives to focus on those with quicker RoI,” said Joseph Anantharaju, executive vice chairman, Happiest Minds Technologies.

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Happiest Minds is beefing up existing capabilities in internet of things (IoT), analytics, artificial intelligence (AI), digital process automation, and security, and looking to build expertise in newer technologies like blockchain, Web 3.0, metaverse, augmented reality/virtual reality (AR/VR), drones, and robotics, Anantharaju said.

LTIMindtree is expected to gain from enterprises shifting their business models to digital and cloud. “While programmes focused on cost optimisation will be prioritised in certain markets for a while, we expect technology to continue to play a dominant role in shaping businesses. Clients in certain sectors may take longer to determine their spending priorities, but they are unlikely to altogether stall or abandon business-critical tech modernisation that has now become a matter of survival,” said Debashis Chatterjee, CEO and MD, LTIMindtree.

The newly merged entity LTIMindtree now plans to compete for bigger deals on the back of a broader set of capabilities. “Our growth strategy as LTIMindtree is no different than that of the merged companies, except that we are now operating with a larger, more comprehensive portfolio of global clients, capabilities, verticals, and markets. It combines the highly complementary capabilities of the two merged entities to unlock sizeable market opportunities. This was already at play in the run-up to the merger,” Chatterjee said.

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In general, as clients move more towards digital operations, analysts expect to see a greater number of smaller and shorter deals. “Unlike monolithic deals of the past, we are seeing more specialised, outcome-based approaches delivered through more ecosystem-based approaches. In addition, the duration is also shorter and typically for three years because the visibility of technology is limited, and clients don’t want to get themselves locked into long-term contracts when there are many unknowns,” said DD Mishra, senior director analyst at Gartner.

Technology vendors like Dell believe more businesses will move to a multi-cloud environment next year. “In 2023, we expect to see businesses proactively shift to a multi-cloud environment to gain control over data and critical applications. Businesses would need to reduce complexities of their existing cloud infrastructure to better manage their data without added expenditures. As ease of doing business remained a priority in 2022, adoption of sustainable technologies shall pick up to a greater degree in 2023,” said Manish Gupta, VP and general manager, Infrastructure Solutions Group, Dell Technologies India.

Companies will also invest in cyber security as 5G creates a massive new pool of connected devices or endpoints. “The security of these endpoints must be managed throughout their lifecycle, especially since a lot of these could contain sensitive information, including biometrics. Businesses must build effective and long-term strategies to mitigate potential threats arising from something as simple as a door lock connected through a SIM card,” Gupta said.

IT vendors will benefit as digital transformation becomes a “fundamental reality” for businesses today, according to Sumed Marwaha, managing director, Unisys India. “We will witness a hyper-automation of processes that will enable people to focus on much more significant tasks. Businesses will heavily rely on data-driven decision-making to scale product deliveries while increasing customer engagement. Multi-cloud adoption will also continue to grow in a data-led economy, leading to a steeper rise in demand for cost-effective cheat-proof cloud solutions,” he said.