Tech News

Digital Transformation Spending to Reach Nearly $1.2 Trillion in 2019 : IDC

IDC has recently published its report on global spending enterprises are going to make in Digital Transformation which is going to reach $1.18 trillion in 2019, an increase of 17.9% over 2018 world wide. IDC updated the report to its Worldwide Semiannual Digital Transformation Spending Guide.

The report stated that manufacturing industry will spend most in digital transformation, within its spending category which is discrete manufacturing ($221.6 billion) and process manufacturing ($124.5 billion) respectively.

Retail will be the next largest industry in 2019, followed closely by transportation and professional services. Each of these industries will be pursuing a different mix of strategic priorities, from omni-channel commerce for the retail industry to digital supply chain optimization in the transportation industry and facility management transforming workspace in professional services. A CAGR of 21.4% will enable the professional services industry to move ahead of transportation in terms of overall DX spending in 2020.

“Worldwide DX technology investments are expected to total more than $6 trillion over the next four years,” said Eileen Smith, program vice president with IDC’s Customer Insights & Analysis group. “Strong DX technology investment growth is forecast across all sectors, ranging between 15% and 20%, with the financial sector forecast to be the fastest with a compound annual growth rate (CAGR) of 20.4% between 2017 and 2022.”

From a technology perspective, hardware and services investments will account for more than 75% of all DX spending in 2019. Services spending will be led by IT services ($154 billion) and connectivity services($102 billion).Hardware spending will be spread across several categories,including enterprise hardware, personal devices, and IaaS infrastructure. DX-related software spending will total $253 billion in 2019. The fastest growing technology categories will be IaaS (35.9% CAGR), application development and deployment software (26.7% CAGR), and business services (26.5% CAGR).

“It is already clear from our research that the businesses which have invested heavily in DX over the last 2-3 years are already reaping the rewards in terms of faster revenue growth and stronger net profits compared to businesses lagging in DX initiatives and investments” Craig Simpson, a research manager with IDC’s Customer Insights and Analysis group, said.

The United States and China will be the two largest geographic markets for DX spending, delivering more than half the worldwide total in 2019. In the U.S., the leading industries will be discrete manufacturing ($63 billion), professional services ($37 billion) and transportation ($34 billion) with DX spending focused on IT services, applications, and enterprise hardware. In China, the industries spending the most on DX will be discrete manufacturing ($55 billion), process manufacturing ($31 billion), and state/local government ($21 billion). Connectivity services and enterprise hardware will be the largest technology categories in China.

The Worldwide Semiannual Digital Transformation Spending Guide quantifies enterprise spending for 210 DX use cases and 12 technology categories across 19 industries and nine geographies. The guide provides spending data for 39 DX strategic priorities and 84 programs as well as technology spending by delivery type (cloud, non-cloud, and other). Unlike any other research in the industry, the DX Spending Guide was designed to help business and IT decision makers to better understand the scope and direction of investments in digital transformation over the next five years.

(Image Courtesy: www.tronweekly.com)

Leave a Comment

Your email address will not be published.

You may also like