Worldwide IT spending is forecast to grow from $2.46 trillion in 2015 to more than $2.8 trillion in 2019, according to the new Worldwide Semiannual IT Spending Guide: Vertical and Company Size from International Data Corporation (IDC).
The new spending guide expands on IDC's previous IT spending forecasts by providing greater depth and detail on technology expenditures by geography, industry, and company size.
North America (the United States and Canada) will provide the largest share of global IT spending throughout the 2015-2019 forecast period and is forecast to pass the $1 trillion mark in 2017. Europe, the Middle East, and Africa (EMEA) will be the second largest region followed closely by Asia/Pacific. Latin America will be the fastest growing region with a compound annual growth rate (CAGR) of 4.3% while IT spending in North America will grow at a 3.8% CAGR. Asia/Pacific and EMEA will both grow more slowly than the overall market, which is forecast to have a CAGR of 3.3%.
"With the global economy entering a new and uncertain phase, IT spending will be heavily influenced by economic cycles and wild cards over the next five years," said Stephen Minton, VP, Customer Insights and Analysis at IDC. "Recent sluggishness in China has caused severe disruption for emerging markets, while the collapse in oil prices continues to challenge energy producers and stock market volatility poses new questions for investment firms. In many industries, business leaders will turn to IT solutions, including data analytics and infrastructure optimization, to help them navigate the stormy economic waters. For IT vendors, the need is greater than ever for a detailed approach to targeting pockets of growth and opportunity amidst this volatile economy."
From an industry perspective, the largest IT expenditures will be found in the discrete manufacturing, banking, and telecommunications verticals with each delivering more than 8% of all spending throughout the forecast period. These three industries will be followed by process manufacturing, federal/central government, and professional services. The fastest growing vertical industry over the 2015-2019 forecast period will be healthcare, with a five-year CAGR of 5.5%. Banking and insurance are tied with media and the resource industries for the industries with the second fastest-growing IT spending, each with a five-year CAGR of 4.6%.
In terms of company size, over 40% of overall IT spending will come from very large businesses (more than 1,000 employees) while the small office category (the 70-plus million small businesses with 1-9 employees) will provide roughly one quarter of all IT spending throughout the forecast period. Medium (100-499 employees) and large (500-999 employees) business will see the fastest growth in IT spending, with CAGRs of 4.4% and 4.8%, respectively.
"Organizations from all industries and of varied sizes are investing in a combination of customer-facing initiatives, enterprise-focused projects, and 3rd Platform technology adoption and advancement," said Jessica Goepfert, Program Director, Customer Insights and Analysis at IDC. "To truly capitalize on this opportunity, vendors would be well served to not only listen to their strategic client's feedback but also to respond and react accordingly. Knowing the client's industry is table stakes. In order to become more embedded in their customers' businesses and make a significant impact, the conversations between vendor and client must change to be process and outcome focused."
Software spending will be the fastest growing technology market segment with a 6.7% CAGR, led by healthcare and financial services investments, followed by business services at 6.2% with strong spending growth from media and resource industries. In contrast, hardware and IT services spending will grow at rates slower than the overall market. Within the software segment, applications that facilitate enterprise and IT operations, such as enterprise resource management and operations & manufacturing applications, will receive the greatest share of software spending. The fastest growing software categories will be network software, collaborative applications, and data access, analytics & delivery applications.
Hardware will remain the largest market segment overall with roughly 40% of all IT expenditures going to devices, infrastructure, and telecom hardware throughout the forecast period. Telecom hardware including smartphones will represent more than half of all hardware spending through the forecast while PCs will remain an important category of IT spending despite a five-year CAGR of -1.6%. Spending on enterprise infrastructure will be driven by solid growth in the server and storage segments with CAGRs of 2.6% and 3.2%, respectively. Healthcare and telecommunication firms will represent the strongest opportunities here.
The Worldwide Semiannual IT Spending Guide: Vertical and Company Size is IDC's flagship all-in-one data product capturing IT spending across 100+ technology categories and 53 countries. This IDC Spending Guide will provide a granular view of the market for IT spending from a country, industry, company size, and technology perspective. This comprehensive database delivered via pivot table format or IDC's custom query tool allows the user to easily extract meaningful information about various technology markets and industries by viewing data trends, relationships, and making data comparisons across 3+ million data points.
The Latest
In MEAN TIME TO INSIGHT Episode 11, Shamus McGillicuddy, VP of Research, Network Infrastructure and Operations, at EMA discusses Secure Access Service Edge (SASE) ...
On average, only 48% of digital initiatives enterprise-wide meet or exceed their business outcome targets according to Gartner's annual global survey of CIOs and technology executives ...
Artificial intelligence (AI) is rapidly reshaping industries around the world. From optimizing business processes to unlocking new levels of innovation, AI is a critical driver of success for modern enterprises. As a result, business leaders — from DevOps engineers to CTOs — are under pressure to incorporate AI into their workflows to stay competitive. But the question isn't whether AI should be adopted — it's how ...
The mobile app industry continues to grow in size, complexity, and competition. Also not slowing down? Consumer expectations are rising exponentially along with the use of mobile apps. To meet these expectations, mobile teams need to take a comprehensive, holistic approach to their app experience ...
Users have become digital hoarders, saving everything they handle, including outdated reports, duplicate files and irrelevant documents that make it difficult to find critical information, slowing down systems and productivity. In digital terms, they have simply shoved the mess off their desks and into the virtual storage bins ...
Today we could be witnessing the dawn of a new age in software development, transformed by Artificial Intelligence (AI). But is AI a gateway or a precipice? Is AI in software development transformative, just the latest helpful tool, or a bunch of hype? To help with this assessment, DEVOPSdigest invited experts across the industry to comment on how AI can support the SDLC. In this epic multi-part series to be posted over the next several weeks, DEVOPSdigest will explore the advantages and disadvantages; the current state of maturity and adoption; and how AI will impact the processes, the developers, and the future of software development ...
Half of all employees are using Shadow AI (i.e. non-company issued AI tools), according to a new report by Software AG ...
On their digital transformation journey, companies are migrating more workloads to the cloud, which can incur higher costs during the process due to the higher volume of cloud resources needed ... Here are four critical components of a cloud governance framework that can help keep cloud costs under control ...
Operational resilience is an organization's ability to predict, respond to, and prevent unplanned work to drive reliable customer experiences and protect revenue. This doesn't just apply to downtime; it also covers service degradation due to latency or other factors. But make no mistake — when things go sideways, the bottom line and the customer are impacted ...
Organizations continue to struggle to generate business value with AI. Despite increased investments in AI, only 34% of AI professionals feel fully equipped with the tools necessary to meet their organization's AI goals, according to The Unmet AI Needs Surveywas conducted by DataRobot ...