This year business leaders have had to prepare and budget for significant IT growth that’s driven by digital transformation. This makes sense as Gartner predicts global IT spending to reach $3.7 trillion this year, a 6.2% increase from the previous year.
According to IDG’s The CIO Tech Poll: Tech Priorities 2018 study, 45% of the IT leaders working at small and medium-sized businesses expected IT budgets to increase this year. When it came to enterprises with more than a 1000 employees, that number rose to 57%.
IDG’s study was based on interviews with 186 senior technology executives, 10% of whom were executive and senior vice presidents, 67% were C-level, 20% were directors.
So Where Is All This Money Going?
Tech leaders believe that a large chunk of their budgets this year will be spent on the following:
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- Artificial Intelligence (43%)
- Business Continuity and Disaster Recovery (47%)
- Machine Learning (ML) and Cognitive Systems (44%)
- Hybrid Cloud (45%)
- Predictive Analytics (47%)
- Public Cloud (46%)
When it comes to enterprise analytics and business intelligence applications, it’s interesting to note that 60% of the CIOs surveyed expected to spend considerably more within this space in 2018. Furthermore, 54% of enterprise CIOs stated that they expected to make a considerable investment in ML this year.
However, business continuity and disaster recovery will be the most important undertaking by IT teams across industries. By the same token cloud computing, data and analytics, and the Internet of Things are expected to have the most significant impact on businesses in the near future.
IT leaders also stated that 15% of their budgets will be dedicated to purchasing tech from new vendors. The areas where these companies would consider new vendors are as follows:
- Big Data and Analytics (57%)
- Cloud Computing (43%)
- IoT (43%)
- Mobile (38%)
- Social Media (36%)
What’s the Breakdown by Industry?
While enterprises are spending big on information and communication technologies this year, the consumer market is still the largest and will account for over $1.5 trillion. This will be driven by the rise of smart technology adoption in emerging marketing.
At the same time, consumer spending is also expected to experience the slowest growth this year with a CAGR of 1.2%. According to IDC, the global investment in IT can be broken down as follows:
- Banking (6.7%)
- Consumer (38.9%)
- Discrete Manufacturing (6.6%)
- Professional Services (4.8%)
- Telecommunications (5.2%)
- Others (37.8%)
Industries such as banking, discrete manufacturing, professional services, and telecommunications will spend over $900 billion combined.
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All four industries are expected to invest heavily in the following, but spending levels will vary depending on the industry:
- Telecom Services
The banking industry, in particular, will spend significantly on IT outsourcing and project-oriented outsourcing. This is expected to cost the industry as much as $115 billion in 2018.
The telecommunications industry, on the other hand, will invest in infrastructure purchases that will add up to $85 billion.
From a regional perspective, the United States will spend a whopping $1.3 trillion making it the largest geographic market (with IT spending expected to grow at a CAGR of 3.6%).
China is the second largest market when it comes to IT spending at $499 billion this year (and growing at a CAGR of 5.2% through 2021).
The following emerging markets will see the fastest spending on information and communication technologies over the next three years:
- India (at a CAGR of 7.0%)
- Peru (at a CAGR of 6.7%)s
- Philippines (at a CAGR of 7.5%)