Financial services and manufacturing will help sustain spending growth on IT products and services by over more than 3% through 2020, with revenue expected to hit $2.65 trillion. According to a report by IDC, worldwide IT spend could reach $2.4 trillion in 2017, an increase of 3.5% when compared to 2016.
Financial services, including banking, insurance, securities and investment services, alongside manufacturing will help the industry grow at a CAGR of around 3.3% between 2015 and 2020.
These two industries could make up about 30% of IT revenues during the forecast period. Apart from these industries, telecommunications, professional services and federal/ central governments are also expected to be large purchasers of IT products and services.
Industries which will witness fastest spending growth include professional services, healthcare and banking. These industries could overtake discrete manufacturing in 2018 and could become the second largest industry in terms of overall spending.
On the other hand, consumer purchases that comprise about 20% of all technology revenues is expected to see flat growth at 0.3%.
According to analysts, the flat growth could be due to shift in priorities from devices to software for things such as security, content management, and file sharing.
Geographically, North America (the US and Canada) is forecast to be the largest market for IT products and services. The region could generate about 40% of all the revenues during the period.
North America will be followed by Western Europe, which could account for more than 20% of IT spending, followed by Asia/Pacific (excluding Japan) with less than 20%.
Latin American countries are predicted to be the fastest growing regions for IT spending, with a growth of about 5.3%. This region is followed by Asia/ Pacific (excluding Japan) and the US with 4% of CAGR.
IT spending in the US is forecast to reach $920bn this year and is expected to reach the $1 trillion mark by 2020. IT services, on the other hand, which includes applications development and deployment and project-oriented services will be the largest category in terms of spending in 2017, with $275bn.
Software purchases are also expected to growth at a rate of 7.9%, making it the largest category by 2020.
IDC Customer Insights and Analysis vice president Stephen Minton said: “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.
“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. Government spending has stabilised, and shipments of notebooks including Chromebooks posted strong growth in the education market.
“Double-digit increases in commercial tablet spending will drive a return to growth for the overall tablet market this year, despite ongoing declines in consumer sales. These industry-driven opportunities for IT vendors will continue to emerge, even as the global economy remains volatile.”