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ICT spending to reach $4tn in 2018

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 06 Feb 2018
Very large businesses (more than 1 000 employees) will account for more than 50% of all ICT spending in 2018, says IDC.
Very large businesses (more than 1 000 employees) will account for more than 50% of all ICT spending in 2018, says IDC.

Worldwide spending on information and communications technology (ICT) will be nearly $4 trillion in 2018.

This is according to new data from the Worldwide Semiannual IT Spending Guide: Industry and Company Size from International Data Corporation (IDC).

The research firm says 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 third-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, says IDC.

Consumer spending will also experience the slowest growth over the forecast period with a compound annual growth rate (CAGR) of 1.2%, it adds. Roughly 80% of consumer spending will go to devices and mobile telecom services, says IDC.

It says 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.

The US 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%, says the research firm. China will be the second-largest market for ICT spending at $499 billion this year with solid growth (5.2% CAGR) forecast through 2021, notes IDC. Japan, the UK, and Germany will round out the top five countries for ICT spending in 2018, it adds.

IDC also notes the small office category (businesses with one to nine employees) will account for 7% of 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, it adds.

In contrast, very large businesses (more than 1 000 employees) will account for more than 50% of all ICT spending throughout the forecast period. 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 to 99 employees) will closely resemble those of the small office category with slightly more spending going toward applications and outsourcing. Medium (100 to 499 employees) and large (500 to 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, according to IDC.

In addition, more than $300 billion will be spent on business process outsourcing and business consulting services this year, it continues. 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.

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