IDC - Global ICT Spending

Forecast 2020 – 2023

Forecast Overview

Following years of growth, ICT spending will remain relatively flat in 2020 due to the COVID-19 pandemic. While traditional ICT spending is forecast to broadly track GDP growth over the next decade, the overall industry will be catapulted back to growth of more than 2x GDP as new technologies begin to account for a larger share of the market. The emergence of IoT is already contributing to significant market growth, and within 5-10 years new technologies such as robotics, artificial intelligence, and AR/VR will also expand to represent over 25% of ICT spending.

Forecast Overview

Technology Spending $M 2018 2019 2020 2021 2022 2023
Traditional Technologies $4,005,011 $4,146,194 $4,005,032 $4,130,413 $4,277,843 $4,453,674
New Technologies $653,808 $766,521 $891,760 $1,030,455 $1,189,208 $1,362,017

Traditional spending on hardware, software, services and telecom has been a tale two markets, with declining revenues from most legacy categories as businesses and consumers focus their ICT spending on a narrow selection of platforms; the COVID-19 pandemic only accelerated this divergence. Over the next 5 years, all growth in traditional tech spending will be driven by just four platforms: cloud, mobile, social and big data/analytics. Meanwhile, cost savings generated by cloud and automation will see more spending diverted towards new technologies such as AI, robotics, AR/VR, and blockchain. Next-gen security related to new technologies will also continue to drive significant growth.

It will take time for some regions to catch up with mature economies when it comes to adoption of some technologies, especially where these are software-driven (e.g. AI) or reliant on legacy infrastructure or inhibited by local factors (e.g. cloud). However, businesses in emerging markets have already moved quickly to focus on rapid adoption of new technologies which deliver rapid return on investment for targeted industrial use cases such as deployment of IoT and robotics solutions by manufacturing firms in China and the rest of Asia. Governments in emerging markets also keen to drive investment in new technologies, leading aggressive smart city initiatives and integrating ICT with economic planning. Over the next 10 years, the gap will begin to narrow.

Traditional Technologies

Forecast Traditional
Technology Spending $M 2018 Spending 2019 Spending 2019 Growth 2020 Spending 2020 Growth
Hardware $1,084,908 $1,112,452 3% $1,021,966 -8%
Software $546,864 $601,579 10% $590,224 -2%
Services $1,027,967 $1,080,681 5% $1,053,286 -3%
Telecom $1,345,272 $1,351,481 0% $1,339,556 -1%
Traditional ICT $4,005,011 $4,146,194 4% $4,005,032 -3%
New Technologies $653,808 $766,521 17% $891,760 16%
Total ICT $4,658,819 $4,912,715 5% $4,896,792 0%

The COVID-19 pandemic will result in ICT spending in 2020 being flat compared to 2019 and kept afloat by growth in new technologies. In 2021 through 2023, overall ICT spending will grow by at least 5% annually due to continued expansion in new technologies while traditional ICT will continue to see growth that tracks GDP. Growth in traditional hardware, software and services will be driven by cloud and mobile and will maintain a stable share of overall business and consumer spending. While some categories are declining, businesses continue to leverage traditional technologies as major components of digital strategies.

Traditional hardware was one of the hardest hit segments of the ICT market by COVID-19. Traditional software continues to represent a major contribution to productivity and drives much of the economic benefit of ICT spending, while investments in mobile and cloud hardware have created new platforms which will enable the rapid deployment of new software tools and applications. There will continue to be some cannibalisation of traditional IT services (outsourcing, in particular), but cloud and mobile also create opportunities for IT and business services firms as organisations seek help with their migration to new platforms and the integration of new digital strategies with existing operations and metrics. Digital transformation is set to drive a large proportion of growth in the next 5-10 years, which will continue to ensure steady demand for professional services.

New Technologies

Largely due to the rapid growth of IoT in recent years, led by investments in the manufacturing and transportation industries, new technologies will soon eclipse $1 trillion in annual revenue. The COVID-19 pandemic has only slightly tempered the growth of these new technologies, and over the next few years, other new categories such as robots/drones and AR/VR headsets (in addition to related software and services) will see similar growth. This increasing proportion of spending targeted at new categories will drive the overall industry to a new growth surge over the next decade as businesses move beyond prototyping into broader deployments of technologies such as augmented reality viewers and AI-enabled robots.

There is a natural cohesion between the traditional technologies which continue to see growth (cloud, mobile, social and analytics) and new technologies. Cloud and mobile enable rapid deployment and connectivity, while also cutting costs and complexity in legacy operations which allows businesses to focus on new digital innovation. Analytics, blockchain, social and AI represent traditional IT software applications which leverage new technologies into tangible economic benefits. Meanwhile, there will be increasing crossover in new technologies such as AI with robotics, as end-users deploy new technologies into real-world use cases.

While much of the focus is on new categories within these new market opportunities, there is also an increasing link between traditional technologies and emerging platforms such as IoT and robotics. A growing share of traditional server/storage spend, for example, is now driven by workloads related to the deployment of these new technologies on the back-end; traditional software applications and system infrastructure solutions benefit from the need of organizations to leverage new technologies into cost savings or competitive benefits; and large firms will continue to engage professional services firms with the roll-out of transformative new ICT solutions. The overall impact of new technologies, then, is much bigger than revenues associated with discrete categories such as IoT sensors, 3D printers or drones.

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