Skip to main content

Business Tech Investment Growth Remains Stable

Organizations are now in the digital business transformation era, where acting as a digital-first enterprise is a CEO mandate, and a strategic differentiator to ensure future prosperity and growth.

Enterprise investment in business technology and related digital application growth initiatives has been remarkably robust, in spite of the currently projected outlook of global economic headwinds.

Worldwide information technology (IT) and business services revenue will grow by 5.7 percent this year and is forecast at 5.2 percent for 2023, according to the latest worldwide market study by International Data Corporation (IDC).

Business Technology Market Development

IDC has maintained its outlook for the worldwide Services market against the backdrop of a potential global recession. Worldwide GDP growth worsened since earlier in the year and is now expected to grow by 2.7 percent this year and 2.4 percent in 2023.

IDC remains cautiously optimistic based on reported results from vendors in the first two quarters of this year, and larger residual effects from the COVID-19 pandemic on the IT industry -- such as hybrid work and cloud computing adoption.

In the first half of 2022, the median year-over-year growth in constant currency for the top 20 IT and business services vendors was more than 9 percent.

"While economic conditions for major economies around the world worsened in the last few months, given the services vendors' strong revenues, bookings, and other leading indicators, the worldwide services market will likely continue on its current growth trajectory," said Xiao-Fei Zhang, program director at IDC.

Meanwhile, IDC has adjusted its short-term growth rate for Professional Services slightly downward: discretionary spending will suffer more as some projects will be delayed or put off indefinitely. But this will be partially offset by potential growth on the supply side.

IDC lowered its Business Consulting market growth rates by 100 and 40 basis points in 2022 and 2023, respectively. Poised to grow between 6 and 8 percent in the coming years, business consulting will outperform the overall economy.

IDC has raised the growth rate for Managed Services by 40 to 60 basis points each year as managed services will be more shielded from economic downturns because these are mission-critical to buyers. 

Within managed services, apps remain the key growth driver, as the COVID-19 pandemic added billions of digital users across the globe overnight, exhausting the available software development talent pool worldwide.

IDC has increased its five-year CAGR for application management from 4.5 to 5.2 percent. The workplace and infrastructure-related outsourcing market outlooks have moved upward as cloud computing and hybrid work continue to drive growth.

Similarly, the growth rate for Support Services was adjusted upward slightly in the short term as support services revenues depend on multi-year contracts and are more insulated from hardware shipment declines.

Outlook for Regional Market Growth Potential

On a geographic basis, the U.S. market is still expected to grow 4 to 5 percent year-over-year. The growth outlook for the Asia-Pacific region was adjusted downward by roughly 10 basis points each year for the next four years. That region is forecast to grow at around 5.5 percent each year.

The 2022 forecast for Europe, the Middle East, and Africa (EMEA) regions were raised moderately. The outlook for the Middle East & Africa (MEA) remains unchanged with year-over-year growth between 6 and 8 percent.

For Europe, the outlook is mixed. IDC has lowered the short-term outlook for the Central and Eastern Europe (CEE) region with a 2022 growth of just 3.6 percent as economic conditions have worsened in the region.

However, Western Europe's growth rate has been raised by 100 to 200 basis points each year to more than 7 percent for this year, and 5.5 to 6 percent growth per year for the next four years.

That said, I believe this forecast is proof of the anticipated strategic benefits gained from IT investment. Savvy leaders are bold and brave.

Popular posts from this blog

Industrial Cloud Computing Apps Gain Momentum

In the manufacturing industry, cloud computing can help leaders improve their production efficiency by providing them with real-time data about their operations. This has gained the attention of the C-suite. Total forecast Industrial Cloud platform revenue in manufacturing will surpass $300 billion by 2033 with a CAGR of 22.57 percent, driven by solution providers enhancing platform interoperability while expanding partner ecosystems for application development. ABI Research found the cloud computing manufacturing market will grow over the next decade due to the adoption of new architectural frameworks that enhance data extraction and interoperability for manufacturers looking to maximize utility from their data. Industrial Cloud Computing Market Development "Historically, manufacturers have built out their infrastructure to include expensive data housing in the form of on-premises servers. The large initial upfront cost of purchasing, setting up, and maintaining these servers is

Credit Scoring Service Spending will Reach $44B

Credit scoring is a method that lenders use to predict the probability a borrower or counter-party will default on loans, or incur additional charges for repayment -- also known as measuring credit worthiness. The method is a key tool in making credit affordable for individuals and businesses. It links credit products to risk potential, connecting borrowers to secondary capital markets and increasing the amount of funds available. This securing process establishes risk predictability dependent on a number of factors, determined by financial indicators and other publicly available information reported by the credit bureaus. Credit Score Market Development According to the latest worldwide market study by Juniper Research, they now forecast credit scoring services will grow by 67 percent to $44 billion by 2028. Juniper anticipates that emerging markets will experience the greatest growth -- projecting the African & Middle Eastern region to grow by 117 percent over the forecast period

Demand for Quantum Computing as a Service

The enterprise demand for quantum computing is still in its early stages, growing slowly. As the technology becomes more usable, we may see demand evolve beyond scientific applications. The global quantum computing market is forecast to grow from $1.1 billion in 2022 to $7.6 billion in 2027, according to the latest worldwide market study by International Data Corporation (IDC). That's a five-year compound annual growth rate (CAGR) of 48.1 percent. The forecast includes base Quantum Computing as a Service, as well as enabling and adjacent Quantum Computing as a Service. However, this updated forecast is considerably lower than IDC's previous quantum computing forecast, which was published in 2021, due to lower demand globally. Quantum Computing Market Development In the interim, customer spend for quantum computing has been negatively impacted by several factors, including: slower than expected advances in quantum hardware development, which have delayed potential return on inve