Digital transformation is moving forward, though at different levels for all companies. Indeed, unless trends change, the digital divide among companies will become ever deeper, with clear implications for business development. The message seems clear: if the company does not invest (or not keep investing) in digitalization, the deep one that involves processes as well as organization and corporate culture, the one that keeps pace with technological innovation nowadays very fast, will not be competitive.
IDC, one of the world’s leading ICT market analysis companies, has made its forecasts of ICT business expenditure between now and 2021, when, according to analysts, the digital market will have completely redesigned the global economic situation, radically changing the way companies operate.
“Italian companies and institutions have recognized the importance that digital transformation can have on the development of business or services provided to citizens, as proven by the shift in ICT spending towards innovation. This, however, is only the first step: technological innovation must be followed by a transformation in processes, organization and corporate culture”, emphasizes Sergio Patano, senior research & consulting manager of IDC Italia and keynote speaker at the IDC Digital Transformation Conference 2018, the next 21 and 27 February, in Rome and Milan.
According to the latest forecasts made by IDC, global spending on technologies for digital transformation will reach almost 1,300 billion dollars in 2018, up 16.8% over 2017, and 1,700 billion in 2019, up 42% over 2017.
According to IDC, 400 billion of the 1.7 trillion expected in 2019 will be invested in the four technologies of the Third Platform, namely cloud, mobility, big data & analytics and social. The largest part, 1,3 billion dollars, will be spent on Innovation Accelerators, technologies based on the Third Platform, such as IoT, robotics, cognitive/AI, augmented and virtual reality, 3D Printing, blockchain.
In the period 2016-2021, global ICT spending will grow with a CAGR (compound annual growth rate) of 5.6%. However, this will be the result of opposite trends: by 2021 investments in the Second Platform (those based on local area networks (LAN) and client/server systems) will decrease by 3.3%, while those in the Third Platform will increase by 4.7% and in Innovation Accelerators by 18.4%. Overall spending on technologies for digital transformation will grow with a CAGR 2016-2021 of 17.9%.
According to IDC, the market is already oriented towards the DX Economy, i.e. the next phase of much deeper digital transformation, based on so-called accelerators such as robotics, 3D printing, Iot, cognitive systems and next-gen security, which will lead to an increase in revenues of up to 50%. At a global level we are already involved in this setting, which will be developed by 2025.
Digital transformation in Italy
In Italy, too, the evolution in ICT spending is the result of two adverse trends. While investments in the Third Platform and Innovation Accelerators are increasing, traditional ICT expenditure is decreasing, focusing on maintaining the existing infrastructure without substantial development projects. In 2017, the Italian ICT market grew by 1.9%, for a total value of 30 billion euros, according to IDC. Third Platform and Innovation Accelerators however grew at a much higher rate: the cloud by 27.8% and augmented/virtual reality by 335.6%. (for more information read the Assintel Report 2018).