Health care, financial, manufacturing industries pushing IT spending to $2.7 – T in 2020
These industries are leaving behind other sectors in the using digital technologies to accelerate their transformation, according to IDC’s latest report.
The company’s recently published Worldwide Semiannual IT Spending Guide: Vertical and Company Size, takes a granular of the market for IT spending from a country, industry, company size, and technology perspective. It tracks IT spending across more than 100 technology categories and 53 countries.
“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.”
If the economy remains stable in 2017, Minton forecasts that even smaller businesses will also “begin to climb aboard the 3rd Platform in greater numbers.”
Consumer purchases accounted for nearly a quarter of all IT revenues in 2015, thanks to the ongoing smartphone explosion. But, the report said, consumer spending for PCs, tablets, and smartphones “has been weakening, which will have a dampening effect on the IT market overall.”
The moderate growth forecast for the tablet market will be driven by commercial segments rather than consumer tablet sales.
However, telecommunications industry digital investment will remain relatively sluggish although spending levels are expected to gradually improve compared to the past several years, according to IDC.
Still, the combined expenditures of 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.
Of the four industries, health care is the fastest growing industry with a compounded annual growth rate (CAGR) of 5.7 per cent in 2020, according to the IDC report. The CAGR for banking, media, and professional services is expected to be 4.9 per cent for the same period.
“These service-based organizations are turning to 3rd Platform technologies like mobility and big data to enable more productive and meaningful ways to engage with clients,” said Jessica Goepfert, program director, Customer Insights and Analysis at IDC. “In addition to these customer-centric priorities, businesses operating in regulated environments are also turning to technology to assist with compliance.”
More than 45 per cent of all IT spending will come from very large corporations with more than 1,000 employees. Medium (100-499 employees) and large (500-999 employees) business will see the fastest growth in IT spending, each with a CAGR of 4.4 per cent, according to IDC.
Small businesses, those with one to nine employees, will account for about one-quarter of the IT expenditure for the forecast period.
“The small business market has been challenged by the economic slowdown in some regions but there is now some pent-up demand for IT assets in this segment, which will materialize as the economy begins to improve,” Minton said.
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