Enterprises will spend over $470 billion on digital in 2017. Digital spending will increase at a CAGR of over 20 percent to $1.1 trillion -$1.2 trillion by 2022, according to Zinnov, a management consulting firm.
Enterprises in Banking, Financial Services and Insurance, Retail, Manufacturing, Hi-Tech and Telecom will be the top spenders jointly contributing over 60 percent of the total digital spending. Over 5.5 million people are employed in job roles as a result of digital investments of enterprises.
Startup investments in areas such as IoT, AI, Blockchain, and Robotic Automation increased in the last 24 months, with an estimated $25 billion worth of funding across these technologies. This is in addition to over $30 billion invested in acquisitions focused on AI and IOT competencies.
The spend on externally-sourced digital services is estimated to be $31 billion in 2017 and will cross $75 billion over the next five years. Digital Application Engineering, Data Management and Analytics, Digital Integration Services, and Experience & Design account for over 75 percent of the total services spend with such providers. Indian Service Providers currently hold an estimated 16 percent share in the total outsourced digital services.
The report said service Providers and enterprises are jointly creating digital technology solutions, exploring newer business models, investing in centres of excellence, and building a robust external ecosystem of startups and partners.
“Accordingly, deal sizes are slowly starting to increase with over 15 percent of digital deals exceeding $3 million in contract value,” said Praveen Bhadada, partner and practice head, Enterprise Digital Transformation at Zinnov.