# Software and IT services Stratum 5 · Information and capital Source page: https://www.materialinsights.org/industries/software_it/ Stratum 5 · Information and capital ## Software and IT services Software and IT services write, run and maintain the programs that every other industry depends on, from operating systems and business applications to outsourced development and support. Gartner estimates worldwide spending of US$ 1.27 trillion on software and US$ 1.49 trillion on IT services in 2025, and forecasts US$ 1.47 trillion and US$ 1.57 trillion for 2026, with AI-driven data-centre spending growing fastest. The platform layer is concentrated in the United States: Amazon, Microsoft and Google take 63% of cloud infrastructure revenue (Synergy, Q2 2026).^[1](https://www.gartner.com/en/newsroom/press-releases/2026-07-27-gartner-forecasts-worldwide-it-spending-to-grow-14-point-2-percent-in-2026-totaling-6-point-37-trillion) **India.** India's tech industry is estimated to earn about US$ 315 billion in FY26, of which US$ 246 billion is exports, with 59.5 lakh direct employees (Nasscom estimates). Its strength is services (IT services US$ 149 billion, engineering R&D US$ 63 billion, BPM US$ 59 billion), while software products are only US$ 23 billion, the main gap to close^[2](https://www.etvbharat.com/en/business/india-fy26-tech-revenues-hit-usd-315-billion-enn26022404879). Depends on 12 of 35 industries · 1 directly Relied on by 9 industries, directly or indirectly Enterprise types 11 in 5 stages Chokepoints 0 rated 5 of 5 Size about US$ 2.76 trillion combined software and IT services spending (calculated from Gartner estimates) 2025 ## [Where ₹100 of Software and IT services output goes](https://www.materialinsights.org/industries/software_it/cost-mix/) Where ₹100 of Software and IT services output goes Every rupee of sales is paid out to someone along the chain. This splits ₹100 of output by who finally receives it, so you can see how exposed the industry is to commodity, chemical and energy prices. Commodities ₹1.6 Chemicals ₹0.2 Energy ₹2.4… ## [Price links with supplier industries](https://www.materialinsights.org/industries/software_it/price-links/) Price links with supplier industries How the industries this one buys from shape its prices: the share of its costs they make up, and how their prices have moved together. Tap a row for the charts. Hover or tap ? for what each measure means. Supplier industry Cost share Raw-material mix… ## [Follow one offering through the chain](https://www.materialinsights.org/industries/software_it/story/) Follow one offering through the chain 5 Example story · 7 steps · India A Zoho subscription built and hosted in India Follow India's best-known software product from its servers to the engineers who write it. 1 / 7 · Compute and cloud platforms Opting out of the US clouds 63% big three's cloud… ## [Buys directly from](https://www.materialinsights.org/industries/software_it/linked-industries/) Buys directly from Data centres and cloud Depends on through its suppliers Building materials Computers and electronics Construction and infrastructure Electrical equipment Machinery and equipment Metal products Plastic and rubber products Semiconductors Telecommunications Water and sanitation… ## [Value chain, from upstream to the customer](https://www.materialinsights.org/industries/software_it/value-chain/) Value chain, from upstream to the customer Criticality to the chain: 5 · Chokepoint 4 · Critical 3 · Important 2 · Supporting 1 · Commodity service Stage 1 Compute and cloud platforms Hyperscale cloud providers 4 · Critical Rent computing, storage, databases and AI accelerators on demand from… ## [What the whole chain draws on](https://www.materialinsights.org/industries/software_it/materials/) What the whole chain draws on Every commodity, chemical and energy tile named by the enterprises above; ×n shows how many of them depend on it. Open any tile for its full detail. Commodities (3) Si Silicon Cu Copper H₂O Water Chemicals (2) MEG Monoethylene glycol HFC Fluorochemicals and… ## [Chokepoints and risks](https://www.materialinsights.org/industries/software_it/risks/) Chokepoints and risks Cloud concentration: Amazon, Microsoft and Google hold 63% of cloud infrastructure revenue, creating lock-in and single points of failure 3 . AI-driven shift in spending: data-centre systems spending is forecast to grow 62.5% in 2026 against 5.3% for IT services, squeezing… ## [Sources](https://www.materialinsights.org/industries/software_it/sources/) Sources Gartner forecasts worldwide IT spending to grow 14.2% in 2026, totalling $6.37 trillion Gartner, 2026 India FY26 tech revenues seen 6.1% up at USD 315 billion (Nasscom Strategic Review 2026 estimates) ETV Bharat, reporting Nasscom, 2026 Q2 cloud market passes $143 billion; highest growth… ## Relationship cards - [Data centres and cloud](https://www.materialinsights.org/links/data-centres-and-cloud-and-software-and-it-services/): Cloud platforms and software are two layers of the same stack: software firms rent compute from cloud providers, and cloud providers buy and build vast amounts of software to run it. For India's IT services firms, cloud migration and AI work on the hyperscalers' platforms are a main source of growth, and some, like TCS, are now building data centres themselves. *(researched)* - [Telecommunications](https://www.materialinsights.org/links/software-and-it-services-and-telecommunications/): Modern telecom networks run on software, from billing and network management to virtualised cores and radio, so operators are large buyers of software and IT services, while cloud and software firms depend on telecom fibre and backbone links. In India the tie is unusually close: telecom is a core client vertical for IT exporters, and TCS led the build of BSNL's homegrown 4G network. *(researched)* - [Finance: banking, insurance, markets](https://www.materialinsights.org/links/finance-banking-insurance-markets-and-software-and-it-services/): Banks, insurers and payment systems run on software, and they are in turn the largest client group of India's IT firms: banking, financial services and insurance were about a third of TCS revenue in Q2 FY26, while a single vendor failure in 2024 cut off payments at hundreds of small banks. *(researched)* - [AI and digital platforms](https://www.materialinsights.org/links/ai-and-digital-platforms-and-software-and-it-services/): AI platforms buy software and engineering from IT firms, and IT firms resell and integrate AI for clients, but the same models can automate coding and process work; for India, whose tech industry was expected to earn about USD 315 billion in FY26 with USD 246 billion from exports, AI is both a new revenue line and a threat to the old one. *(researched)* - [Computers and electronics](https://www.materialinsights.org/links/computers-and-electronics-and-software-and-it-services/): Software and IT services buys from Computers and electronics; computers and electronics buys from Software and IT services; computers and electronics depends on software and IT services; software and IT services depends on computers and electronics. - [Education and research](https://www.materialinsights.org/links/education-and-research-and-software-and-it-services/): Software and IT services buys from Education and research; education and research buys from Software and IT services; education and research depends on software and IT services; software and IT services depends on education and research. - [Real estate](https://www.materialinsights.org/links/real-estate-and-software-and-it-services/): Software and IT services buys from Real estate; real estate buys from Software and IT services; real estate depends on software and IT services; software and IT services depends on real estate. - [Transport and logistics](https://www.materialinsights.org/links/software-and-it-services-and-transport-and-logistics/): Software and IT services buys from Transport and logistics; transport and logistics buys from Software and IT services; transport and logistics depends on software and IT services; software and IT services depends on transport and logistics. - [Aerospace and defence](https://www.materialinsights.org/links/aerospace-and-defence-and-software-and-it-services/): Aerospace and defence buys from Software and IT services; aerospace and defence depends on software and IT services. - [Apparel and footwear](https://www.materialinsights.org/links/apparel-and-footwear-and-software-and-it-services/): Apparel and footwear buys from Software and IT services; apparel and footwear depends on software and IT services. - [Construction and infrastructure](https://www.materialinsights.org/links/construction-and-infrastructure-and-software-and-it-services/): Construction and infrastructure buys from Software and IT services; construction and infrastructure depends on software and IT services. - [E-commerce and digital marketplaces](https://www.materialinsights.org/links/e-commerce-and-digital-marketplaces-and-software-and-it-services/): E-commerce and digital marketplaces buys from Software and IT services; E-commerce and digital marketplaces depends on software and IT services. - [Furniture](https://www.materialinsights.org/links/furniture-and-software-and-it-services/): Furniture buys from Software and IT services; furniture depends on software and IT services. - [Healthcare services](https://www.materialinsights.org/links/healthcare-services-and-software-and-it-services/): Healthcare services buys from Software and IT services; healthcare services depends on software and IT services. - [Hospitality and tourism](https://www.materialinsights.org/links/hospitality-and-tourism-and-software-and-it-services/): Hospitality and tourism buys from Software and IT services; hospitality and tourism depends on software and IT services. - [Household and personal care](https://www.materialinsights.org/links/household-and-personal-care-and-software-and-it-services/): Household and personal care buys from Software and IT services; household and personal care depends on software and IT services. - [Machinery and equipment](https://www.materialinsights.org/links/machinery-and-equipment-and-software-and-it-services/): Machinery and equipment buys from Software and IT services; machinery and equipment depends on software and IT services. - [Media and entertainment](https://www.materialinsights.org/links/media-and-entertainment-and-software-and-it-services/): Media and entertainment buys from Software and IT services; media and entertainment depends on software and IT services. - [Medical devices](https://www.materialinsights.org/links/medical-devices-and-software-and-it-services/): Medical devices buys from Software and IT services; medical devices depends on software and IT services. - [Metal products](https://www.materialinsights.org/links/metal-products-and-software-and-it-services/): Metal products buys from Software and IT services; metal products depends on software and IT services. - [Pharmaceuticals](https://www.materialinsights.org/links/pharmaceuticals-and-software-and-it-services/): Pharmaceuticals buys from Software and IT services; pharmaceuticals depends on software and IT services. - [Professional services](https://www.materialinsights.org/links/professional-services-and-software-and-it-services/): Professional services buys from Software and IT services; professional services depends on software and IT services. - [Public administration, defence and security](https://www.materialinsights.org/links/public-administration-defence-and-security-and-software-and-it-services/): Public administration, defence and security buys from Software and IT services; public administration, defence and security depends on software and IT services. - [Semiconductors](https://www.materialinsights.org/links/semiconductors-and-software-and-it-services/): Semiconductors buys from Software and IT services; semiconductors depends on software and IT services. - [Textiles and leather](https://www.materialinsights.org/links/software-and-it-services-and-textiles-and-leather/): Textiles and leather buys from Software and IT services; textiles and leather depends on software and IT services. - [Vehicles, ships, rail, aircraft](https://www.materialinsights.org/links/software-and-it-services-and-vehicles-ships-rail-aircraft/): Vehicles, ships, rail, aircraft buys from Software and IT services; vehicles, ships, rail, aircraft depends on software and IT services. - [Waste and recycling](https://www.materialinsights.org/links/software-and-it-services-and-waste-and-recycling/): Waste and recycling buys from Software and IT services; waste and recycling depends on software and IT services. - [Water and sanitation](https://www.materialinsights.org/links/software-and-it-services-and-water-and-sanitation/): Water and sanitation buys from Software and IT services; water and sanitation depends on software and IT services. - [Wholesale and retail trade](https://www.materialinsights.org/links/software-and-it-services-and-wholesale-and-retail-trade/): Wholesale and retail trade buys from Software and IT services; wholesale and retail trade depends on software and IT services. - [Wood products](https://www.materialinsights.org/links/software-and-it-services-and-wood-products/): Wood products buys from Software and IT services; wood products depends on software and IT services. - [Copper](https://www.materialinsights.org/links/copper-and-software-and-it-services/): Software and IT services depends on copper. - [Data centres](https://www.materialinsights.org/links/data-centres-and-software-and-it-services/): Software and IT services depends on data centres. - [Distribution grids, mini-grids and interconnectors](https://www.materialinsights.org/links/distribution-grids-mini-grids-and-interconnectors-and-software-and-it-services/): Software and IT services depends on distribution grids, mini-grids and interconnectors. - [Energy in buildings](https://www.materialinsights.org/links/energy-in-buildings-and-software-and-it-services/): Software and IT services depends on energy in buildings. - [Fluorochemicals and refrigerants](https://www.materialinsights.org/links/fluorochemicals-and-refrigerants-and-software-and-it-services/): Software and IT services depends on fluorochemicals and refrigerants. - [Heat pumps, air conditioning and refrigeration](https://www.materialinsights.org/links/heat-pumps-air-conditioning-and-refrigeration-and-software-and-it-services/): Software and IT services depends on heat pumps, air conditioning and refrigeration. - [Internal combustion engines and gensets](https://www.materialinsights.org/links/internal-combustion-engines-and-gensets-and-software-and-it-services/): Software and IT services depends on internal combustion engines and gensets. - [Monoethylene glycol](https://www.materialinsights.org/links/monoethylene-glycol-and-software-and-it-services/): Software and IT services depends on monoethylene glycol. - [Silicon](https://www.materialinsights.org/links/silicon-and-software-and-it-services/): Software and IT services depends on silicon. - [Water](https://www.materialinsights.org/links/software-and-it-services-and-water/): Software and IT services depends on water. ## Other sections - [Where ₹100 goes](https://www.materialinsights.org/industries/software_it/cost-mix/index.md) - [Price links with suppliers](https://www.materialinsights.org/industries/software_it/price-links/index.md) - [Example story](https://www.materialinsights.org/industries/software_it/story/index.md) - [Linked industries](https://www.materialinsights.org/industries/software_it/linked-industries/index.md) - [Value chain](https://www.materialinsights.org/industries/software_it/value-chain/index.md) - [Materials drawn on](https://www.materialinsights.org/industries/software_it/materials/index.md) - [Chokepoints and risks](https://www.materialinsights.org/industries/software_it/risks/index.md) - [Sources](https://www.materialinsights.org/industries/software_it/sources/index.md)