IDC predicts that US$1.2 trillion in will be spent on digital transformation technologies in 2017, an increase of 17.8% from 2016.
The Worldwide Digital Transformation Spending Guide forecasts that spending will continue at a 17.9% compound annual growth rate (CAGR) over the 2015-2020 forecast period and reach US$2 trillion in 2020.
“Changing competitive landscapes and consumerism are disrupting businesses and creating an imperative to invest in digital transformation, unleashing the power of information across the enterprise and thereby improving the customer experience, operational efficiencies, and optimising the workforce,” said Eileen Smith, programme director in IDC’s Customer Insights and Analysis Group. “In 2017, global organisations will spend US$1.2 trillion on digital transformation with discrete and process manufacturers contributing almost 30% of this spending, while the fastest growth will come from retail, healthcare providers, insurance, and banking.”
Almost half of this US$1.2 trillion will be spent on technologies to improve connectivity services, IT services, and app development and deployment. The discrete and process manufacturing industries will invest roughly 20% of their digital transformation budgets in app development and deployment, and another 12-13% in IT services. Meanwhile, the transportation industry will invest nearly 50% of its budget to connectivity services.
More than half of all digital technology investments in 2017 will go toward technologies that make business operations more effective by leveraging digitally connected products, services, assets, people and trading partners.
The second largest investment area will be technologies supporting omni-experience innovations that transform how customers, partners, employees and things communicate with each other and the products and services created to meet individualised demand.
“IDC’s Digital Transformation Spending Guide is a powerful tool for understanding the hardware, software and services opportunities related to digital change; this insight includes not only third platform spending on cloud, analytics, mobile and social technologies, but also on innovation accelerators like the internet of things, cognitive software, and 3D printing,” said Gard Little, research director of Global Services Markets and Trends at IDC.
The fastest growing technology categories associated with digital transformation over the 2015-2020 forecast are cloud infrastructure (29.4% CAGR), business services (22.0% CAGR), and applications (21.8% CAGR). Despite a CAGR that is slower than the overall market (17.3%), app development and deployment spending will overtake IT services as the second largest digital technology category by 2020.