Global IT spending on products and services will grow 3.5 percent year-over-year in 2017 to total nearly $2.4 trillion, according to an IDC Semiannual IT Spending Guide update. Looking ahead to 2020, global IT spending will grow to nearly $2.65 trillion, a CAGR of 3.3 percent from 2015-2020.
Geographically, North America (the U.S. and Canada) will be the largest market for IT products and services, accounting for more than 40 percent of all worldwide revenues over the period.
Zooming in on the U.S. market, IDC forecasts IT spending will rise to reach nearly $920 billion in 2017 and surpass the $1 trillion mark in 2020. U.S. spending on IT services, such as applications development, deployment and project-oriented services, will account for the largest share – $275 billion this year, IDC says.
Furthermore, U.S. spending on software will grow at a healthy 7.9% CAGR over the forecast period, making it the largest category by 2020. Spending on IT business services will show healthy growth over the five-year time horizon, growing at a 6.0 percent CAGR, while spending on IT hardware will be nearly flat, rising at a CAGR of just 0.5 percent.
“While we are seeing a tempering in growth for U.S. healthcare provider IT spending as we enter the post-EHR era, the diverse and innovative professional services industry is expected to exhibit the fastest growth over the life of the forecast,” elaborated Jessica Goepfert, IDC program director, Customer Insights and Analysis in a press relase.
“Combine tech-savvy talent with an information-based business, and one can envision the multitude of possibilities for IT in this segment. IT investments will be used to achieve goals related to the differentiation of products and services, improving client satisfaction, and increasing revenue,” she added.
Global IT Spending
Among industry sectors globally, banks, securities and insurance brokerages and investment services providers will continue to spend the most on IT products and services, accounting for around 30 percent of global IT spending over the five-year period, the market research provider highlights.
Telecom and professional services industry players, along with governments, will also number among those spending comparatively high amounts on IT products and services.
In terms of IT spending growth, healthcare, professional services companies and banks will lead the way. Banks will overtake discrete manufacturing companies in 2018 to wind up being the second largest industry sector in terms of IT spending, according to IDC’s latest update.
In terms of company size, very large businesses that employ 1,000 or more will continue to spend the lion’s share, accounting for more than 45 percent of global IT spending from 2015-2020.
Businesses in the small office category (1-9 employees) will account for roughly one-quarter. “Global SMB software spending will surpass that of hardware in 2018, upending traditional IT spending habits,” added IDC VP, Customer Insights and Analysis Christopher Clue.
“More mature SMBs already recognize the value of linking software investments to business processes, and by the end of the forecast, we expect most midmarket firms will be on a path to embrace digital transformation.”
Overall, growth in IT spending will be spread evenly among medium (100-499 employees), large (500-999 employees) and very large businesses, IDC forecasts, as IT spending in each grows at a 4.3 percent CAGR.
Drilling down further into the update, consumer spending will hold steady over the forecast period, rising at a forecast CAGR of just 0.3 percent. However, consumer spending on IT will rise to represent more than 20 percent of the global total and consumers will shift their spending from devices to software products and services, such as security, content management and file sharing, IDC says.