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Global ICT Spending

Regional Markets

Regional Markets Overview

Asia Pacific is now the largest market for traditional hardware, following the explosion of mobile device proliferation in recent years. Led by China, Japan and India, this region now accounts for more than 40% of traditional hardware spending (PCs, tablets, phones, peripherals, server/storage and network infrastructure).

However, Asia still represents a small portion of software and services revenues, as businesses in the region continue to spend a small proportion of average IT budgets on the applications, tools and professional services which can leverage traditional ICT into broader economic benefits. US firms still lead the way in adoption of cutting-edge software, with Europe not far behind.

Software piracy is an inhibitor in Asia and some other regions, as is a relative lack of solutions developed for local SMBs. The growth of cloud could be a way to bridge this gap in the coming years. Already, businesses in emerging regions such as Africa and Latin America have found ways of leapfrogging legacy infrastructure in order to deploy innovative applications via mobile networks using low-bandwidth devices and cloud-based software.

Traditional Technologies

Regional Traditional
Region $M Hardware Software Services Telecom Total
Asia $415,144 $69,342 $167,325 $465,940 $1,117,752
USA $236,415 $249,415 $438,649 $333,023 $1,257,502
Europe $198,538 $121,771 $273,819 $268,521 $862,650
ROW $146,278 $37,087 $91,640 $344,819 $619,824
Total $996,376 $477,615 $971,434 $1,412,303 $3,857,728

The hardware market is dominated by smartphones in terms of overall volume and revenues, which has catapulted Asia to the largest region in terms of overall spending on traditional hardware. Asian firms and consumers also spend heavily on telecom services, with strong growth in mobile data usage over the past few years. Cloud and mobile remain the main drivers for traditional technologies. In emerging markets, the growth of smartphones drives mobile telecom services.

In the US and Europe, the growth of cloud drives spending on server/storage hardware, software solutions and professional services related to cloud deployments. In all regions, an increasing proportion of spending on traditional hardware, software, services and telecom is tied to cloud and mobile while legacy technologies such as desktop PCs, on-premise storage systems and fixed telecom services are either flat or declining.

New Technologies

Regional New
2017 Spending % 3D Printing AV/VR AI IoT Robotics
Asia 19% 30% 7% 50% 64%
USA 36% 40% 79% 25% 16%
Europe 36% 15% 11% 20% 14%
ROW 9% 15% 4% 4% 6%

USA: The US still leads the way in software innovation and is way ahead of other regions in terms of cloud deployments and software-based technologies such as AI, big data and social. US firms benefit from world-class infrastructure and local supply chains, and a return to strong economic growth in the past few years has helped to stimulate demand for investments in emerging categories like AR/VR and AI software. However, the US does not dominate all new technology markets, with rivals emerging in China, India and elsewhere armed with increasing R&D budgets, venture capital and ICT skills.

Asia: Asia has become a hotbed for adoption of some new technologies, especially IoT and robotics. This is partly driven by manufacturing firms, most notably in China, which are rapidly deploying these solutions. It also reflects commitments from Asian governments and business leaders to leverage new technologies as a solution to economic and demographic challenges, such as robotics as a response to labor shortages in Japan. Smart city investments in the region are eye-catching, and the explosion of mobile devices has allowed some countries to ‘leapfrog’ legacy technologies. The challenge will be to increase broader adoption of software solutions which have the potential to deliver a more transformative economic impact.

Europe: European firms have benefited from a steady economic recovery since 2016, which has enabled more investment in new technologies like 3D printing, AR/VR and robotics. Manufacturing firms in Germany feel a pressing need to keep up with competitors in other regions, while financial services firms in the UK must invest strategically in order to defend their position in the face of Brexit uncertainty. Europe still tends to lag behind the US when it comes to new technology adoption but maintains a lead over other regions like Asia in software innovation and investment.

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