Technology spending is expected to maintain “steady growth” over the next five years with planned upgrades and refresh cycles set to drive commercial investments.
New findings from IDC suggest that at a global-level, spending on hardware, software, services and telecommunications will reach $4.8 trillion in 2023, at a compound annual growth rate (CAGR) of 3.8 per cent.
Such projections come despite a “slowing global economy and the looming trade war between the United States and China”.
“Global market conditions remain volatile, and although the economy has performed broadly better than expected in the past six months in many countries, a sense of uncertainty over the short-term economic and business outlook has been rising at the same time,” observed Serena Da Rold, program manager, IDC.
"Confidence indicators are fluctuating on a monthly basis, depending on short-term indicators ranging from speculation over tariffs and trade wars to political wild cards, with a potential global slowdown looming for 2019 and 2020.”
According to Da Rold, end-user surveys reflect the impact of such uncertainty on business decision-making, but IDC forecasts remain “roughly stable” overall for 2019 compared with previous market releases.
“And slightly accelerated in the medium term, driven by stronger growth in software and hardware,” Da Rold added. “Digital transformation and the adoption of automation technologies will be driving investments in applications, analytics, middleware, and data management software, as well as increasing demand for server and storage capacity.”
Aside from planned upgrades, IDC also cited new investments in digital technologies and services - enabling the digital transformation (DX) of business models, products and services - as a "significant source of spending".
Specifically, commercial purchases are expected to account for nearly two thirds of all ICT spending by 2023, up from 60.4 per cent in 2018.
Within this segment, Da Rold said banking and discrete manufacturing will be the industries spending the most, followed by professional services, media and personal and consumer services.
"Digital transformation is catching up in Asia Pacific at an accelerated pace, and this will continue to drive significant investments in technologies in the next few years - from hardware and services to applications,” added Ashutosh Bisht, senior research manager, IDC. “The investments are driven by both government and enterprises in the region as they are understanding the value of what these new technologies bring to the overall operational activities.
“It also harnesses the potential of a lot of initiatives being launched to make the workforce well versed. Up-skilling and future-proofing the workforce are on top of employers' and the governments' agenda.”