Lead Worldwide IT Spending
February 9, 2017
revenues for information technology (IT) products and services are
forecast to reach nearly $2.4 trillion in 2017, an increase of 3.5% over
2016. In a newly published update to the Worldwide Semiannual IT
Spending Guide: Industry and Company Size , International Data
Corporation (IDC) estimates that global IT spending will grow to nearly
$2.65 trillion in 2020. This represents a compound annual growth rate
(CAGR) of 3.3% for the 2015-2020 forecast period.
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% of all IT revenues throughout the
forecast period as they invest in technology to advance their digital
transformation efforts. 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. 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% of all technology revenues will come from consumer purchases, but
consumer spending will be nearly flat throughout the forecast (0.3%
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. 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 stabilized, 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," said
Stephen Minton, vice president, Customer Insights and Analysis at IDC.
On a geographic basis, North America (the United States and Canada) will
be the largest market for IT products and services, generating more than
40% of all revenues throughout the forecast. Elsewhere, Western Europe
will account for slightly more than 20% of worldwide IT revenues
followed by Asia/Pacific (excluding Japan) at slightly less than 20%.
The fastest growing regions will be Latin America (5.3% CAGR) followed
by Asia/Pacific (excluding Japan) and the United States (each with a
IT spending in the United States is forecast reach nearly $920 billion
this year and top the $1 trillion mark in 2020. While IT services such
as applications development and deployment and project-oriented services
will be the largest category of spending in 2017 ($275 billion),
software purchases will experience strong growth (7.9% CAGR) making it
the largest category by 2020. Business services will also experience
healthy growth over the forecast period (6.0% CAGR) while hardware
purchases will be nearly flat (0.5% CAGR).
"While we are seeing a tempering in growth for U.S. healthcare provider
IT spending as we enter the post-EHR era, the diverse and innovative
professional services industry is expected to exhibit the fastest growth
over the life of the forecast. Combine tech-savvy talent with an
information-based business, and one can envision the multitude of
possibilities for IT in this segment. IT investments will be used to
achieve goals related to the differentiation of products and services,
improving client satisfaction, and increasing revenue," said Jessica
Goepfert, program director, Customer Insights and Analysis at IDC.
terms of company size, more than 45% 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 a CAGR of 4.3%.
“Global SMB software spending will surpass that of hardware in 2018,
upending traditional IT spending habits. More mature SMBs already
recognize the value of linking software investments to business
processes, and by the end of the forecast, we expect most midmarket
firms will be on a path to embrace digital transformation," said
Christopher Chute, vice president, Customer Insights and Analysis.
"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. This sets the stage
for spending growth everywhere, especially in midsize firms," added Ray
mond Boggs, program vice president, SMB Research.