Worldwide spending on IT products and services will increase at a compound annual rate of 3.3% over the next five years, driven in large part by commercial demand, according to International Data Corp.
The research firm said in its latest semiannual IT Spending Guide that the information technology market will grow from nearly $2.4 trillion in 2016 to more than $2.7 trillion in 2020, with four industries — banking, discrete manufacturing, process manufacturing, and telecommunications — generating nearly a third of worldwide revenues.
Healthcare will remain the fastest-growing industry, posting a five-year CAGR of 5.7% despite concerns that spending growth may have peaked. Banking, media, and professional services are expected to experience solid growth with CAGRs of 4.9%.
“While the consumer and public sectors have dragged on overall IT spending so far in 2016, we see stronger momentum in key industries including financial services and manufacturing,” Stephen Minton, vice president of Customer Insights and Analysis at IDC, said in a news release. “Enterprise investment in new project-based initiatives, including data analytics and collaborative applications, remains strong.”
Jessica Goepfert, program director for Customer Insights and Analysis, noted that service-based organizations “are turning to 3rd Platform technologies like mobility and big data to enable more productive and meaningful ways to engage with clients” and businesses operating in regulated environments are also turning to technology to assist with compliance.
Consumer purchases accounted for nearly a quarter of all IT revenues in 2015, reflecting demand for smartphones. But IDC said spending on PCs, tablets, and smartphones has been weakening, which will have a dampening effect on the IT market overall.
“Looking ahead, even the moderate growth forecast for the tablet market will be driven by commercial segments rather than consumer tablet sales,” the survey predicted.
IDC is also forecasting gradual IT spending growth in the public sector, although government purchases of technology will continue to lag behind much of the private sector. Expenditures in the natural resources industry are expected to recover as the price of oil recovers from recent lows.