August 30, 2016
A new published update to the Worldwide Semiannual IT Spending Guide: Vertical and Company Size from International Data Corporation (IDC) finds that worldwide revenues for information technology products and services will grow from nearly US$2.4 trillion in 2016 to more than $2.7 trillion in 2020. This represents a compound annual growth rate (CAGR) of 3.3% for the 2015-2020 forecast period.
Among the trends in the forecast is the positive momentum displayed in big industries like financial services and manufacturing, where companies continue to invest in 3rd Platform solutions (e.g. cloud, mobility, and big data) as part of their digital transformation efforts.
The telecommunications industry is forecast to remain relatively sluggish, although spending levels are expected to gradually improve compared to the past several years.
Combined, these four industries (banking, discrete manufacturing, process manufacturing, and telecommunications, which are also the industries with the largest IT expenditures) will generate nearly a third of worldwide IT revenues throughout the forecast.
Consumer purchases accounted for nearly a quarter of all IT revenues in 2015, thanks to the ongoing smartphone explosion. But consumer spending for PCs, tablets, and smartphones has been weakening, which will have a dampening effect on the IT market overall. Looking ahead, even the moderate growth forecast for the tablet market will be driven by commercial segments rather than consumer tablet sales.
“While the consumer and public sectors have dragged on overall IT spending so far in 2016, we see stronger momentum in other key industries including financial services and manufacturing,” said Stephen Minton, vice president, Customer Insights and Analysis at IDC. “Enterprise investment in new project-based initiatives, including data analytics and collaborative applications, remains strong and mid-sized companies have been especially nimble when it comes to rapidly adopting 3rd Platform technologies and solutions. Assuming the economy remains stable in 2017, smaller businesses will also begin to climb aboard the 3rd Platform in greater numbers.”
Healthcare will remain the fastest growing industry with a five-year CAGR of 5.7% despite concerns that spending growth may have peaked.
Banking, media, and professional services will also experience solid growth with CAGRs of 4.9% and combined revenues of more than $475 billion in 2020. Elsewhere, gradual improvement is expected in the public sector, although government purchases of technology will continue to lag behind much of the private sector. Similarly, IT expenditures in the natural resources industry are forecast to recover as the price of oil rebounds from recent lows.