Leading research agency International Data Corporation (IDC) has revealed the size of the global IT spending in 2020.
Revenues for information technology (IT) products and services will grow from nearly $2.4 trillion in 2016 to more than $2.7 trillion in 2020. This represents a compound annual growth rate (CAGR) of 3.3 percent during 2015-2020, said IDC.
Industry verticals such as financial services and manufacturing are making huge investment in cloud, mobility, and Big Data as part of their digital transformation strategy.
The telecommunications industry is forecast to remain relatively sluggish, though spending levels are expected to gradually improve compared to the past several years.
Banking, discrete manufacturing, process manufacturing, and telecommunications will generate nearly a third of worldwide IT revenues throughout the forecast.
Consumer purchases accounted for nearly a quarter of IT revenues in 2015 due to the smartphone explosion.
Weakening consumer spending for PCs, tablets, and smartphones will have a dampening effect on the IT market overall. Moderate growth forecast for the tablet market will be driven by commercial segments rather than consumer tablet sales.
The consumer and public sectors have dragged on overall IT spending so far in 2016.
Stephen Minton, vice president, Customer Insights and Analysis at IDC, said: “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.”
Healthcare will remain the fastest growing industry with a five-year CAGR of 5.7 percent despite concerns that spending growth may have peaked.
Banking, media, and professional services will also experience solid growth with CAGRs of 4.9 percent and combined revenues of more than $475 billion in 2020.
Gradual improvement is expected in the public sector, though government purchases of technology will continue to lag behind much of the private sector.
IT expenditures in the natural resources industry are forecast to recover as the price of oil rebounds from recent lows.
More than 45 percent of all IT spending will come from very large businesses (more than 1,000 employees) while the small office category (the 70-plus million small businesses with 1-9 employees) will provide roughly one quarter of all IT spending throughout the forecast period.
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 percent, said IDC.