ICT spending by service providers to reach $426 bn by 2022: IDC

ICT spending by service providers will reach $426 billion by 2022, representing average growth of 6 percent per year.
IT spendingThis is due to the shift from on-premise IT management to the as-a-service model, IDC report said on Monday.

Cloud and digital service providers will represent the strongest market opportunities for ICT vendors with overall growth of 9 percent with $105 billion in annual spend by 2022.

Communications service providers will represent the largest share of service provider spending with $254 billion in 2022.

Colocation and managed services providers will increase spending by an average of 7 percent per year, reaching $67 billion in annual ICT spend by 2022.

Service providers account for 44 percent of spending on core infrastructure technologies such as server and storage hardware, enterprise network equipment, and storage / network software.

The pace of investments by cloud infrastructure providers is expected to slow in the next few years as supply/demand and supply chains normalize, but service providers will continue to account for a growing share of overall spending as the ICT market shifts to the as-a-service model and new digital ecosystems emerge in which digital service providers will play a key role.

The shift from end-users to service providers in core infrastructure technology markets is a profound shift with deep implications for tech vendors, said Stephen Minton, vice president in IDC’s Customer Insights & Analysis group.

Cloud infrastructure providers have led a surge of spending on servers, storage, and system infrastructure software in the past few years.

Cloud and digital providers increased their share of ICT spending on core infrastructure technologies from 24 percent to 28 percent from $39 billion to $51 billion. Spending on core infrastructure by cloud and digital service providers will increase at an average rate of 10 percent per year over the next five years compared to growth of 3 percent by commercial end-users.

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