$1.2T Spend Forecast
for Digital Transformation Technologies in 2017
February 23, 2017
A new update to the
Worldwide Digital Transformation Spending Guide from International Data
Corporation (IDC) forecasts worldwide spending on digital transformation
(DX) technologies to be more than $1.2 trillion in 2017, an increase of
17.8% over 2016. IDC expects DX spending to maintain this pace with a
compound annual growth rate (CAGR) of 17.9% over the 2015-2020 forecast
period and reaching $2.0 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 optimizing the workforce," said Eileen Smith, program
director in IDC's Customer Insights & Analysis Group. "In 2017, global
organizations will spend $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."
The technology categories that will see the greatest amount of DX
spending in 2017 are connectivity services, IT services, and application
development & deployment (AD&D). Combined, these categories will account
for nearly half of all DX spending this year. However, investments in
these categories will vary considerably from industry to industry. The
discrete and process manufacturing industries, for example, will invest
roughly 20% of their DX budgets in AD&D and another 12-13% in IT
services while the transportation industry will devote nearly half of
its spending to connectivity services.
The fastest growing technology categories associated with digital
transformation over the five-year forecast are cloud infrastructure
(29.4% CAGR), business services (22.0% CAGR), and applications (21.8%
CAGR). And, despite a CAGR that is slower than the overall market
(17.3%), AD&D spending will grow fast enough to overtake IT services as
the second largest DX technology category by 2020.
than half of all DX investments in 2017 will go toward technologies that
support operating model innovations. These investments will focus on
making business operations more responsive and effective by leveraging
digitally-connected products/services, assets, people, and trading
partners. Investments in operating model DX technologies help businesses
redefine how work gets done by integrating external market connections
with internal digital processes and projects. 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 unique and individualized demand.
On a geographic basis, Asia/Pacific (excluding Japan) will see the
largest investments in DX technologies in 2017 with 37% of the worldwide
total. DX spending in this region will be led by the discrete and
process manufacturing industries as well as professional services firms.
The United States will be the second largest region with 30% of the
worldwide total, led by professional services, discrete manufacturing,
and the transportation industries. Latin America and the Middle East and
Africa will experience the fastest growth in DX spending with five-year
CAGRs of 23.4% and 22.6%, respectively.
"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 3rd 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, Global Services
Markets and Trends.