ICT spending will reach $5.5 trillion in 2020 – mainly fuelled by Internet of Things (IoT) market, according to a report from IDC.
The growth of new technologies including the IoT, Robotics, and Augmented Reality/Virtual Reality (AR/VR) will drive the next wave of growth in the information and communications technology (ICT) industry.
Revenue from new technologies (Innovation Accelerators) will be almost $7.4 trillion during 2015-2020, adding $1.8 trillion to the overall size of the IT industry in terms of annual sales by the end of the forecast period.
IoT market is forecast to reach almost $1.3 trillion in annual revenue by 2020, of which more than $1 trillion represents new opportunity outside of traditional technology market categories (devices, infrastructure, software, services, and telecom).
Robotics, AR/VR, security, cognitive/artificial intelligence, and 3D printing will contribute the rest of the fast-growing portion of the ICT market.
“The ICT market of datacenter infrastructure, client devices, software, services, and telecom is now growing at a rate not much faster than real GDP and increasingly resembles a mature sector of the overall economy,” said Stephen Minton, program vice president, Customer Insights & Analysis at IDC.
ICT spending, excluding the Innovation Accelerators, will be at compound annual growth rate (CAGR) of 1 percent in constant currency terms between 2015 and 2020. ICT spending, including Innovation Accelerators, will increase 5 percent.
Innovation Accelerators will post a CAGR of 18 percent.
Asia Pacific excluding Japan represents the largest market for Innovation Accelerators, forecast to reach more than $600 billion by 2020, followed closely by the United States.
The fastest growth over the same period will be in Latin America, Central & Eastern Europe, and the Middle East and Africa.
Device sales are now dominated by mobile devices and cloud service providers represent a growing proportion of all infrastructure hardware and software sales, while big data and analytics are at the heart of the fastest-growing opportunities.
Growth in the telecom market is already entirely dependent on mobile.
With public cloud services still growing at a double-digit rate, cloud will continue to cannibalize from traditional spending on infrastructure, software, and IT services.
Big data and analytics is still expanding at a double-digit rate of growth and is forecast to see a 12 percent CAGR between 2015 and 2020.
Public cloud services and big data and analytics will each provide more than $200 billion in annual revenue by 2020.
Mobility is already valued at more than $1.5 trillion in annual sales.
IDC said the Innovation Accelerators will represent almost $1.8 trillion in annual spending by 2020, after a compound annual growth rate of 18 percent from 2015 to 2020.
Rest of the ICT market will have a compound annual growth rate of around 1 percent.
Including Innovation Accelerators, total ICT Spending will still be posting annual growth of 6 percent by 2020.
Between 2015 and 2020, the Innovation Accelerators will contribute more than $7 trillion in value to the ICT industry (including spending on traditional categories, like storage for IoT and Artificial Intelligence systems).
IoT will contribute more than $1 trillion, but AR/VR will grow from $5 billion last year to more than $100 billion by 2020, while Robotics will have grown to more than $100 billion in annual revenue by the same time.