Skip to main content

Digital Transformation Revenue will Reach $2.1 Trillion

Spending on digital transformation (DX) technologies will reach nearly $1.3 trillion in 2018 -- that's an increase of 16.8 percent over 2017. In 2021, DX spending will nearly double to more than $2.1 trillion, according to the latest worldwide market study by International Data Corporation (IDC).

The majority of DX spending in 2018 ($662 billion) will go toward technologies that support new or expanded operating models, as organizations seek to make their operations more effective and responsive by leveraging digitally-connected products or services, assets, people, and trading partners.

Digital Transformation Market Development

The second largest DX investment area in 2018 ($326 billion) will be technologies supporting omni-experience innovations that transform how customers, partners, employees, and things communicate with each other and the products and services created to meet unique and individualized demand.

Information will also be an important DX investment area ($240 billion in 2018) as organizations strive to obtain and leverage enterprise data and associated actionable insights for competitive advantage through better decisions, optimized operations, and new products and services.

"At this point in the digital transformation era, all industries are investing heavily in new technologies," said Eileen Smith, program director at IDC. "While some industries are more focused on cloud, big data, analytics, and mobility, many have shifted their investment focus toward the Internet of Things (IoT), artificial intelligence (AI), cognitive computing and robotics."

The industries that will invest the most in digital transformation in 2018 are discrete manufacturing ($214 billion), professional services ($133 billion), process manufacturing ($132 billion), and transportation ($127 billion).

The industries that will see the fastest DX spending growth over the five-year forecast are construction (32.1 percent CAGR), retail (21.9 percent CAGR), and healthcare provider (21.7 percent CAGR).

The technology categories that will see the greatest amount of DX spending in 2018 are connectivity services, IT services, enterprise hardware, and applications. Investment in connectivity services will be central to those industries focusing on operating-model and omni-experience transformation.

Outlook for Regional DX Application Growth

On a geographic basis, the United States will see DX spending of $437 billion in 2018 followed closely by the Asia-Pacific (excluding Japan) region at $412 billion. The U.S. will also maintain a five-year CAGR that outpaces the overall market, enabling it to remain the global leader throughout the forecast period.

DX spending in Europe, the Middle East, and Africa (EMEA) will total $280 billion in 2018. The geographic regions that will experience the fastest growth in DX spending are Canada (25.2 percent CAGR), Latin America (23.3 percent CAGR), Central and Eastern Europe (22.1 percent CAGR), and the Middle East and Africa (22.0 percent CAGR).

According to the IDC assessment, the competitive pressures from early adopters are starting to force others to begin transformational efforts. Even in regions with relatively slow uptake, enterprises and public sector organizations are rethinking their approaches and embracing digital change.

Popular posts from this blog

Artificial Intelligence Growth at an Inflection Point

Business technology investment no longer follows a predictable path to growth. The global venture capital (VC) investment in artificial intelligence (AI) was close to its peak in 2021 reaching $22.3 billion, according to the latest worldwide market study by ABI Research. This is just $400 million shy of the historical high of $22.7 billion recorded in 2019. Compared to the $15 billion recorded in 2020, the market made a remarkable recovery, with a 48.5 percent year-on-year growth. Will the future AI marketplace return to stable growth, or will it remain volatile? Artificial Intelligence Market Development "COVID-19 greatly accelerated the speed of digital transformation within the enterprise. Businesses are looking for solutions to work processes automation, customer care, due diligence, transcription and translation, and sales and marketing enablement tools," said Lian Jye Su, research director at ABI Research . At the same time, COVID-19 led to the Great Resignation of 2021

How a Digital-First CEO Leads Transformation

Some leaders reject the notion that "wait and see" is the best response to disruptive change. Savvy senior executives are already driving digital business transformation throughout their organization in an effort to gain a bold strategic advantage. According to the latest market study by International Data Corp (IDC), Digital-First CEOs plan to drive at least half of their income from digital business products, services, and experiences by 2027 -- that's ahead of the market average of 39 percent. Driven by their response to the COVID-19 pandemic, these business leaders have changed how they think about the relationship between business and technology, and how they approach the next digital transformation era -- from scaling digital technology to guiding a viable digital business. Digital Business Market Development IDC defines digital business as value creation based on technology, which entails: 1) Automated customer-facing processes and internal operations; 2) Provision

Digital Solutions for Industrial & Manufacturing Firms

Executive leaders of fast-moving consumer goods (FMCG) are seeking guidance on how to apply new business technology in their manufacturing operations. CIOs and CTOs are tasked with gaining insight into the best solutions for digital transformation. ABI Research evaluated the impact politics, regulation, the economy, supply chain, ESG, and technology are having on FMCG, pharma, producers of steel, chemicals, pulp and paper -- as well as the mining and oil & gas sectors. Digital Transformation Market Development "Our assessment found that the FMCG sector is under pressure from all sides," says Michael Larner, industrial & manufacturing research director at ABI Research . Securing raw materials is challenging considering lockdowns in China and limited grain supplies from Ukraine. Supply shocks are raising input costs, and operating costs are rising with higher energy costs coupled with the pressure to pay higher wages and work sustainably. "We all hoped that with th