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IDC forecasts digital transformation spend to reach US$1.3 trillion this year


January 3, 2018  


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Worldwide spending on digital transformation (DX) technologies (hardware, software, and services) is expected to be nearly US$1.3 trillion in 2018, an increase of 16.8% over the US$1.1 trillion spent in 2017.

A new update to the Worldwide Semi-annual 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 US$2.1 trillion.

The majority of DX spending in 2018 (US$662 billion) will go toward technologies that support new or expanded operating models as organizations 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 (US$326 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 individualized demand.

Information will also be an important DX investment area (US$240 billion in 2018) as organizations strive to obtain and leverage information for competitive advantage through better decisions, optimized 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 (US$214 billion), professional services (US$133 billion), process manufacturing (US$132 billion), and transportation (US$127 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.