Digital transformation is not only making its effects felt among forward-looking workforces, their customers and at IT departments, but also the overall technology market.
Worldwide IT spending will approach $2.65 trillion by 2020, said the analysts at International Data Corporation (IDC), registering a compound annual growth rate (CAGR) of 3.3 percent during the forecast period (2015-2020). This year, spending is expected to jump 3.5 percent compared to 2016, settling at $2.4 trillion.
Manufacturers, forging ahead with their digital transformation initiatives, along with banks, investment firms and other financial institutions, are leading the charge.
These industries are poised to generate nearly a third (30 percent) of all IT sales throughout the forecast. In terms of growth, professional services and healthcare IT spending will outpace other industries.
While businesses are clearly driving the market, consumer demand will remain essentially flat with a CAGR of just 0.3 percent. In total, consumers will account for 20 percent of all IT dollars.
"Consumer spending on mobile devices and PCs continues to drag on the overall IT industry, but enterprise and public sector spending has shown signs of improvement," said IDC's Stephen Minton, vice president of Customer Insights and Analysis, in a statement. "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."
Large enterprises will account for 40 percent of all IT spending. Small firms of one to nine employees, will also exercise their technology power, generating a quarter of all revenues for IT vendors.
In general, the small and midsized business (SMB) community has a growing appetite for IT solutions that get the job done.
"Changing SMB attitudes regarding the importance of technology investment cut across company size and region categories," stated Raymond Boggs, program vice president of SMB Research at IDC. "Small and midsize firms in developing geographies are just as interested in leveraging technology as those in developed regions. This sets the stage for spending growth everywhere, especially in midsize firms."
North America is the market to beat with 40 percent of revenues, followed by Western Europe at 20 percent) and Asia Pacific excluding Japan at just under 20 percent. In the U.S., IT providers are set to rake in $920 trillion this year and cross the $1 trillion mark in 2020.
Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.