Information technology (IT) products and services revenues are forecast to grow 3.5 percent to nearly $2.4 trillion in 2017 and touch $2.65 trillion in 2020 – representing a CAGR of 3.3 percent during 2015-2020.
Financial services such as banking, insurance, and securities and investment services and manufacturing like discrete and process will be leading the spending on spending on IT products and services.
IDC said financial servicesand manufacturing will generate around 30 percent of IT revenues as they invest in technology to advance their digital transformation efforts.
The telecommunications and professional services industries and the federal / central government are also forecast to be among the largest purchasers of IT products and services. Professional services, healthcare, and banking will overtake discrete manufacturing in 2018 to become the second largest industry in terms of overall IT spending.
More than 20 percent of all technology revenues will come from consumer purchases, but consumer spending will be 0.3 percent CAGR as priorities shift from devices to software for things such as security, content management, and file sharing.
Consumer spending on mobile devices and PCs continues to drag on the IT industry, but enterprise and public sector spending has shown signs of improvement.
Strong pockets of growth have emerged, such as investments by financial services firms and utilities in data analytics software, or IT services spending by telcos and banks. Government spending has stabilized, and shipments of notebooks posted strong growth in the education market.
Double-digit increases in commercial tablet spending will drive a return to growth for the overall tablet market this year, despite declines in consumer sales.
North America — the United States and Canada — will be the largest market for IT products and services, generating more than 40 percent of all revenues.
Western Europe will account for slightly more than 20 percent of worldwide IT revenues followed by Asia Pacific (excluding Japan) at slightly less than 20 percent.
The fastest growing regions will be Latin America (5.3 percent CAGR) followed by Asia/Pacific (excluding Japan) and the United States (each with a 4.0 percent CAGR).
IT spending in the United States is forecast reach nearly $920 billion this year and top the $1 trillion mark in 2020.
While IT services such as applications development and deployment and project-oriented services will be the largest category of spending in 2017 ($275 billion), software purchases will experience strong growth (7.9 percent CAGR) making it the largest category by 2020. Business services will also experience healthy growth over the forecast period (6.0 percent CAGR) while hardware purchases will be nearly flat (0.5 percent CAGR).
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 (businesses with 1-9 employees) will provide roughly one quarter of all IT spending.
Global SMB software spending will surpass that of hardware in 2018. More mature SMBs already recognize the value of linking software investments to business processes. “By the end of the forecast, we expect most midmarket firms will be on a path to embrace digital transformation,” said Christopher Chute, vice president, Customer Insights and Analysis.