IDC forecasts worldwide spending on digital transformation technologies to reach $1.3tn in 2018

By Zenobia Hegde

Worldwide spending on digital transformation (DX) technologies (hardware, software, and services) is expected to be nearly $1.3 trillion (€1.09 trillion) in 2018, an increase of 16.8% over the $1.1 trillion (€0.93 trillion) spent in 2017. A new update to the Worldwide Semiannual Digital Transformation Spending Guide from International Data Corporation (IDC)forecasts DX spending to maintain a strong pace of growth over the 2016-2021 forecast period with a compound annual growth rate (CAGR) of 17.9%. In 2021, DX spending will nearly double to more than $2.1 trillion (€1.77 trillion).

The majority of DX spending in 2018 ($662 (€557.47) billion) will go toward technologies that support new or expanded operating models as organisations seek to make their operations more effective and responsive by leveraging digitally-connected products/services, assets, people, and trading partners.

The second largest DX investment area in 2018 ($326 (€274.52) billion) 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 individualised demand. Information will also be an important DX investment area ($240 (€202.10) billion in 2018) as organisations strive to obtain and leverage information for competitive advantage through better decisions, optimised operations, and new products and services.

“At this point in the digital transformation era, all industries are investing heavily in 3rd Platform technologies,” said Eileen Smith, program director in IDC’s Customer Insights & Analysis Group. “While some industries are more focused on the core technologies underlying the 3rd Platform, particularly cloud, big data and analytics, and mobility, many have shifted their investment focus toward the Innovation Accelerators, such as the Internet of Things, artificial intelligence and cognitive computing, and robotics.

While the investment strategies may differ from company to company, the objective remains the same: to reimagine and reconstruct the business to compete in the increasingly digital economy that’s platform-powered and ecosystem-enabled.”

The industries that will invest the most in digital transformation in 2018 are discrete manufacturing ($214 (€180.21) billion), professional services ($133 (€112.00) billion), process manufacturing ($132 (€111.16) billion), and transportation ($127 (€106.95) billion).

All four industries are expected to spend the most on operating model transformation, with information transformation as the second largest area of investment for both the discrete and process manufacturing industries and omni-experience transformation coming in second for the professional services and transformation industries. The industries that will see the fastest DX spending growth over the five-year forecast are construction (32.1% CAGR), retail (21.9% CAGR), and healthcare provider (21.7% CAGR).

The technology categories that will see the greatest amount of DX spending in 2018 are connectivity services, IT services, enterprise hardware, and applications. Investment in connectivity services will be central to those industries focusing on operating model transformation and omni-experience transformation. Industries focusing on information transformation are expected to invest more heavily in IT services and enterprise hardware. Investments in new applications will be important to virtually all industries as they pursue their DX strategies.

On a geographic basis, the United States will see DX spending of $437 billion (€368.00 billion) in 2018 followed closely by the Asia/Pacific […]

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Posted on: December 27, 2017

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