Hyderabad: Despite the challenges presented by the COVID-19 pandemic, spending on the digital transformation (DX) of business practices, products, and organizations will continue at a rapid pace, according to new data from the International Data Corporation (IDC).
Spending on DX technologies and services is forecast to grow 10.4% worldwide in 2020 to an eye-watering US$1.3 trillion, highlighting the growing significance being placed on the adoption of emerging technologies.
Of the 278 DX use cases identified in the IDC’s DX Spending Guide, only nine will see a decline in spending this year.
Craig Simpson, IDC senior research manager of customer insights, said that COVID-19 has upended the global economy, with direct negative implications on the way businesses invest in IT.
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"DX technology investment has not gone unscathed, but so far it has been affected to a lesser extent since many large-scale DX projects underway or planned are instrumental to broader strategic business initiatives. Compared to IDC's pre-COVID-19 forecast, the five-year growth rate for DX spending has declined by less than two percentage points," he added.
Research from IDC’s report confirms that the degree of economic hardship experienced as a result of the pandemic is directly tied to the degree of digital transformation growth in 2020.
Eileen Smith, IDC program vice president of customer insights, said that COVID-19 has wiped off almost $500 billion of worldwide DX technology investment between 2020-2023 from our pre-COVID-19 forecast.
"Yet despite these losses, pockets of growth opportunities exist across most industries when diving deep into specific use cases that solve specific business problems. A few examples include RPA-based claims processing in insurance, digital visualisation in education, omnichannel commerce platforms in telecommunications, and clinical trial operational excellence in process manufacturing," he added.
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The United States will remain the largest geographic market for DX spending, delivering roughly one-third of the worldwide total in 2020.
Western Europe will be the second-largest region for DX spending, following closely by China. These two regions will also deliver the strongest year-over-year growth in DX spending at 13.6% for China and 12.8% for Western Europe.
It is pertinent to mention here that the IDC's Spending Guides provide a granular view of key technology markets from a regional, vertical industry, use case, buyer, and technology perspective. The spending guides are delivered via a pivot table format or custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships.
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