02 Feb 2018
Consumers Account for Largest Share of Spending, but Enterprise Investments in Will Drive Worldwide ICT Market to Almost $4 Trillion in 2018, According to IDC
FRAMINGHAM, Mass., February 2, 2018 – Worldwide spending on information and communications technology (ICT) will be nearly $4.0 trillion in 2018, according to new data from the Worldwide Semiannual IT Spending Guide: Industry and Company Size from International Data Corporation (IDC). The explosive growth of smartphones in recent years means that consumer spending will account for the largest proportion of that total, but growth will be driven by enterprise spending on cloud, software and infrastructure related to 3rd Platform solutions.
The consumer market will account for more than $1.5 trillion in ICT spending in 2018 and will deliver more than one third of all worldwide spending throughout the forecast. Consumer spending will also experience the slowest growth over the forecast period with a CAGR of 1.2%. Roughly 80% of consumer spending will go to devices and mobile telecom services.
Banking, discrete manufacturing, telecommunications, and professional services will be the four largest industries for ICT spending in 2018 at more than $900 billion combined. While all four industries will invest heavily in applications, infrastructure, outsourcing, and telecom services, spending levels will vary depending on industry needs. For example, banking will invest the most in IT outsourcing and project-oriented outsourcing ($115 billion combined) while telecommunications spending will be led by infrastructure purchases ($85 billion). Professional services and banking will experience the fastest growth in ICT spending with five-year CAGRs or 5.9% and 5.2%, respectively.
The United States will see $1.3 trillion in ICT spending in 2018 making it the largest geographic market this year and throughout the forecast with spending expected to grow at a CAGR of 3.6%. China will be the second largest market for ICT spending at $499 billion this year with solid growth (5.2% CAGR) forecast through 2021. Japan, the UK, and Germany will round out the top five countries for ICT spending in 2018. The countries that will experience the fastest ICT spending growth over the 2016-2021 forecast period are the Philippines (7.5% CAGR), India (7.0% CAGR), and Peru (6.7% CAGR).
"The growth of technology spending in the U.S. professional services industry is propelled by the tech-savvy firms that comprise it. Think Facebook, Google, Microsoft, and Uber, to name a few. These companies wholeheartedly embrace technology as a key enabler to their business strategies and service offerings, and are often the first to test drive new innovations as they strive to stay ahead of the rapidly evolving technology market. Meanwhile, banks and retailers share the common desire to deliver a delightful, cohesive, channel-agnostic customer experience. These initiatives are enabled by technology investments to help organizations unite their physical and online worlds," said Jessica Goepfert, program director, Customer Insights & Analysis.
In terms of company size, the small office category (businesses with 1-9 employees) will account for 7% all ICT spending throughout the forecast period. Most of this spending (around $100 billion per year) will go toward fixed and mobile telecom services, while devices will also be a significant spending category. On the other end of the spectrum, very large businesses (more than 1,000 employees) will account for more than 50% of all ICT spending throughout the forecast. These businesses will focus the majority of their spending on IT outsourcing, project-oriented outsourcing, applications, and infrastructure as they pursue their digital transformation strategy. The spending patterns for small businesses (10-99 employees) will closely resemble those of the small office category with slightly more spending going toward applications and outsourcing. Medium (100-499 employees) and large (500-999 employees) businesses will experience more balanced spending across all technology categories.
Spending on information technology (IT) will reach $2.16 trillion this year, led by business and consumer spending on devices, applications, IT outsourcing, and project-oriented outsourcing, including application development and system and network implementation. In addition, more than $300 billion will be spent on business process outsourcing and business consulting services this year. Telecommunications spending is forecast to be $1.5 trillion this year with 95% of the total going to fixed and mobile telecom services. Mobile phones will be the largest segment of technology spending at nearly $500 billion in 2018, followed by mobile data and mobile voice at more than $400 billion each.
"Spending for telecom services is largely dominated by consumers, but some industries have emerged as rapid adopters of fixed and mobile data services over the past few years. In Asia, special projects and initiatives have helped to boost fixed broadband adoption in the education sector. In the U.S., the healthcare industry is a major source of fixed-line telecom spending, while transportation firms in Canada and Japan have invested aggressively in mobile broadband solutions. Meanwhile, consumers in many emerging markets continue to leapfrog fixed broadband and go straight to mobile data services, which is changing the entire landscape for how to connect with end-users in these countries," said Stephen Minton, research vice president, Customer Insights & Analysis.
The Worldwide Semiannual IT Spending Guide: Industry and Company Size is IDC's flagship all-in-one data product capturing IT spending across more than 100 technology categories and 53 countries. This IDC Spending Guide will provide a granular view of the market for IT spending from a country, industry, company size, and technology perspective. This comprehensive database delivered via pivot table format or IDC's custom query tool allows the user to easily extract meaningful information about various technology markets and industries by viewing data trends, relationships, and making data comparisons across more than 3 million data points.
About IDC Spending Guides
IDC's Spending Guides provide a granular view of key technology markets from a regional, vertical industry, use case, buyer, and technology perspective. The spending guides are delivered via pivot table format or custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships.
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International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading media, data and marketing services company that activates and engages the most influential technology buyers. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn.