New Technologies Will Drive ICT Spending

IDC said that it expects spending on ICT to grow at twice the rate of GDP because of increase in spending on the IoT, robotics, AR & VR and cognitive computing and AI.

Total ICT spending on traditional IT, telecom services, and new technologies will grow from $4.3 trillion in 2016 to $5.6 trillion by 2021, representing a compound annual growth rate (CAGR) of 6% in constant currency terms. Annual growth will accelerate through the forecast period, from 5.5% in 2017 to 6.5% in 2021, as new technologies account for a growing proportion of the overall market, the company said.

Traditional ICT spending (IT and telecom) is now a mature sector of the economy, as many technology markets continue to saturate and commoditize. The growth of cloud will also cannibalize from traditional ICT revenues, concentrating more IT capital spending into the hands of large cloud service providers. Traditional IT spending will grow at an annual rate of 3-4% through the next five years, while telecom spending increases by approximately 1% per year.

New ICT spending from the categories identified above will grow by 17% in 2017, and will continue to accelerate over the next five years as adoption levels surge around the world, including in emerging markets and will represent a significant proportion of the overall ICT market by 2021.

IDC has a concept of platforms and the second platform is of datacentres, devices and software and that platform is declining. However, the third platform will be driven by the apps mentioned above, with cloud, mobile, big data and analytics and social platforms. Developing regions, such as APAC (excluding Japan), are jumping straight to the third platform and IDC said that all, except mobile, are growing.