IDC FutureScape Predictions

Prediction 1: Leading in 3D - Through 2018, Two-Thirds of CIOs Will Have Embraced Leading in 3D, Which Requires Them to Simultaneously Innovate, Integrate, and Incorporate

Prediction 2: New Digital Revenue Streams - By 2018, 35% of IT Resources Will Be Spent to Support the Creation of New Digital Revenue Streams

Prediction 3: Data Governance - By 2017, 80% of Global CIOs Will Initiate a Data Transformation and Governance Framework to Turn Information into a Competitive Business Differentiator

Prediction 4: DX Collaboration - By 2018, 70% of Siloed Digital Transformation Initiatives Will Ultimately Fail Because of Insufficient Collaboration, Integration, Sourcing, or Project Management

Prediction 5: Experimentation, Speed, and Quality - By End of 2018, 90% of IT Projects Will Be Rooted in the Principles of Experimentation, Speed, and Quality

Prediction 6: Security - By 2016, 70% of IT Organizations Will Shift Their Focus to Advanced "Contain and Control" Security and Away from a Perimeter Mentality

Prediction 7: Rationalization - By 2016, 75% of CIOs Will Have to Revive Rationalization Initiatives to Simplify the IT Environment and Enable Innovation

Prediction 8: Strategic Architecture - By 2017, 60% of Digital Transformation Initiatives Will Not Be Able to Scale Because of a Lack of Strategic Architecture

Prediction 9: Changing DX WorkSource Models - By 2018, 80% of Development Organizations Supporting DX Will Incorporate Collective Genius and Crowdsourcing into Their Projects as a Regular Practice

Prediction 10: Business Services - By 2017, 40% of Services Managed by IT Will Be Business Services Oriented to Augmented Experience and Smart Products

Source: IDC

IDC Spending Guides

FRAMINGHAM, Mass., February 23, 2017 – A new update to the Worldwide Semiannual Digital Transformation Spending Guide from International Data Corporation (IDC) forecasts worldwide spending on digital transformation (DX) technologies to be more than $1.2 trillion in 2017, an increase of 17.8% over 2016. IDC expects DX spending to maintain this pace with a compound annual growth rate (CAGR) of 17.9% over the 2015-2020 forecast period and reaching $2.0 trillion in 2020.

"Changing competitive landscapes and consumerism are disrupting businesses and creating an imperative to invest in digital transformation, unleashing the power of information across the enterprise and thereby improving the customer experience, operational efficiencies, and optimizing the workforce," said Eileen Smith, program director in IDC's Customer Insights & Analysis Group. "In 2017, global organizations will spend $1.2 trillion on digital transformation with discrete and process manufacturers contributing almost 30% of this spending, while the fastest growth will come from retail, healthcare providers, insurance, and banking."

The technology categories that will see the greatest amount of DX spending in 2017 are connectivity services, IT services, and application development & deployment (AD&D). Combined, these categories will account for nearly half of all DX spending this year. However, investments in these categories will vary considerably from industry to industry. The discrete and process manufacturing industries, for example, will invest roughly 20% of their DX budgets in AD&D and another 12-13% in IT services while the transportation industry will devote nearly half of its spending to connectivity services.

The fastest growing technology categories associated with digital transformation over the five-year forecast are cloud infrastructure (29.4% CAGR), business services (22.0% CAGR), and applications (21.8% CAGR). And, despite a CAGR that is slower than the overall market (17.3%), AD&D spending will grow fast enough to overtake IT services as the second largest DX technology category by 2020.

More than half of all DX investments in 2017 will go toward technologies that support operating model innovations. These investments will focus on making business operations more responsive and effective by leveraging digitally-connected products/services, assets, people, and trading partners. Investments in operating model DX technologies help businesses redefine how work gets done by integrating external market connections with internal digital processes and projects. The second largest investment area will be technologies supporting omni-experience innovations that transform how customers, partners, employees, and things communicate with each other and the products and services created to meet unique and individualized demand.

On a geographic basis, Asia/Pacific (excluding Japan) will see the largest investments in DX technologies in 2017 with 37% of the worldwide total. DX spending in this region will be led by the discrete and process manufacturing industries as well as professional services firms. The United States will be the second largest region with 30% of the worldwide total, led by professional services, discrete manufacturing, and the transportation industries. Latin America and the Middle East and Africa will experience the fastest growth in DX spending with five-year CAGRs of 23.4% and 22.6%, respectively.

Source: IDC

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