Worldwide revenues for information technology (IT) products and services are forecast to reach nearly $US2.4 trillion in 2017, representing an increase of 3.5 per cent over 2016.
With global investments set to grow to nearly $US2.65 trillion by 2020, IDC research reports that industry spending on IT products and services will continue to be led by financial services (banking, insurance, and securities and investment services) and manufacturing (discrete and process).
Together, these industries will generate around 30 per cent of all IT revenues throughout the forecast period as they invest in technology to advance digital transformation efforts.
According to IDC, the telecommunications and professional services industries and the federal/central government are also forecast to be among the largest purchasers of IT products and services.
In addition, the industries that will see the fastest spending growth over the forecast period will be professional services, healthcare, and banking, which will overtake discrete manufacturing in 2018 to become the second largest industry in terms of overall spending.
Meanwhile, more than 20 per cent of all technology revenues will come from consumer purchases, but consumer spending will be nearly flat throughout the forecast (0.3 per cent CAGR) as priorities shift from devices to software for things such as security, content management, and file sharing.
“Consumer spending on mobile devices and PCs continues to drag on the overall IT industry, but enterprise and public sector spending has shown signs of improvement,” IDC vice president of customer insights, Stephen Minton, said.
“Strong pockets of growth have emerged, such as investments by financial services firms and utilities in data analytics software, or IT services spending by telcos and banks.
“Government spending has stabilised, and shipments of notebooks including Chromebooks posted strong growth in the education market.
“Double-digit increases in commercial tablet spending will drive a return to growth for the overall tablet market this year, despite ongoing declines in consumer sales. These industry-driven opportunities for IT vendors will continue to emerge, even as the global economy remains volatile.”
On a geographic basis, the fastest growing regions will be Latin America (5.3 per cent) followed by Asia/Pacific (excluding Japan) and the United States (each with at four per cent).
In terms of company size, more than 45 per cent of all IT spending worldwide will come from very large businesses (more than 1,000 employees) while the small office category (businesses with 1-9 employees) will provide roughly one quarter of all IT spending throughout the forecast period.
Spending growth will be evenly spread with the medium (100-499 employees), large (500-999 employees) and very large business categories each seeing an increase of 4.3 per cent.
“Global SMB software spending will surpass that of hardware in 2018, upending traditional IT spending habits,” IDC vice president of analysis, Christopher Chute, added.
“More mature SMBs already recognise the value of linking software investments to business processes, and by the end of the forecast, we expect most mid-market firms will be on a path to embrace digital transformation.”
According to findings, changing SMB attitudes regarding the importance of technology investment cut across company size and region categories.
“Small and midsize firms in developing geographies are just as interested in leveraging technology as those in developed regions,” IDC vice president of SMB Research, Raymond Boggs, added.
“This sets the stage for spending growth everywhere, especially in midsize firms.”