The leading global users of IT infrastructure and related services -- such as financial services and manufacturing companies -- continue to invest in cloud computing, enterprise mobility and big data applications as part of their ongoing digital business transformation efforts.
Worldwide revenues for information technology products and services will grow from nearly $2.4 trillion in 2016 to more than $2.7 trillion in 2020, according to the latest worldwide market study by International Data Corporation (IDC). This represents a compound annual growth rate (CAGR) of 3.3 percent for the 2015-2020 forecast period.
Given the recent growth trends, IT vendors will likely continue to target four key industries -- banking, discrete manufacturing, process manufacturing, and telecommunications -- which are forecast to generate nearly a third of all global IT revenues throughout the forecast period.
That being said, consumer purchases accounted for nearly a quarter of all IT revenues in 2015, due to the ongoing smartphone and mobile internet explosion. However, spending for PCs, media tablets, and smartphones has weakened, which will have a dampening effect on the IT market overall.
IT Solutions Drive Digital Transformation
"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 at IDC.
Healthcare will remain the fastest growing user of IT with a five-year CAGR of 5.7 percent, despite concerns that 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, although IDC analysts believe that their digital transformation investment will continue to lag behind much of the private sector. Similarly, IT expenditures in energy related industries are forecast to recover, as the commodity price of oil rebounds from recent lows.
In the U.S. market, the greatest near-term growth is expected among healthcare providers, professional services firms, banks and securities and investment services organizations, according to the IDC assessment.
These service-based organizations are embracing mobility and big data analytics apps to enable more productive and meaningful ways to engage with clients. In addition to these customer-centric priorities, businesses operating in regulated environments are also turning to technology to assist with compliance.
IT Spending Outlook by Market Segment
More than 45 percent of all IT spending worldwide 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.
In contrast, medium (100-499 employees) and large (500-999 employees) businesses will see the fastest growth in IT spending, each with a CAGR of 4.4 percent.
"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 added. "Meanwhile, the strongest growth is still among mid-sized companies, which are more nimble than very large enterprises and less exposed to economic volatility than the smallest businesses."