FRAMINGHAM, Mass.--(BUSINESS WIRE)--The growth of new technologies including the Internet of Things (IoT), Robotics, and Augmented Reality/Virtual Reality (AR/VR) will drive the next wave of growth in the information and communications technology (ICT) industry, enlarging the overall market opportunity to $5.5 trillion by 2020, according to the newly released IDC Worldwide Black Book: 3rd Platform Edition. The forecast illustrates the extent to which the industry is dependent upon new technology innovation for growth in the years ahead, as traditional revenue streams begin to decline in the face of cannibalization, substitution, and the shift to cloud-based solutions.
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Innovation Accelerators to Drive Revenue Growth
New
technologies, which IDC calls "Innovation Accelerators," will provide
almost $7.4 trillion in aggregate industry revenue from 2015-2020,
adding $1.8 trillion to the overall size of the industry in terms of
annual sales by the end of the forecast period. A large proportion of
this spending will come from the fast-growing IoT market, which is
forecast to reach almost $1.3 trillion in annual revenue by 2020, of
which more than $1 trillion represents new opportunity outside of
traditional technology market categories (devices, infrastructure,
software, services, and telecom). Robotics, AR/VR, security,
cognitive/artificial intelligence, and 3D printing will contribute the
rest of this fast-growing portion of the ICT market.
"The traditional ICT market of datacenter infrastructure, client devices, software, services, and telecommunications is now growing at a rate not much faster than real GDP and increasingly resembles a mature sector of the overall economy," said Stephen Minton, program vice president, Customer Insights & Analysis. "In fact, even within this traditional taxonomy of technology products and services, all of the growth is now coming from just four segments, which IDC calls the 3rd Platform – cloud, mobility, big data and analytics, and social business. The rest of the industry is already declining, which represents a huge challenge for vendors that are dependent on legacy markets and technologies."
Asia/Pacific Largest Market for Innovation Accelerators
Between
2015 and 2020, overall ICT Spending, excluding the Innovation
Accelerators, will see a compound annual growth rate (CAGR) of just 1%
in constant currency terms. Including the Innovation Accelerators, ICT
spending will increase by 5% over the same period. In total, the
Innovation Accelerators will post a CAGR of 18%. Asia/Pacific (excluding
Japan) represents the largest market for Innovation Accelerators,
forecast to reach more than $600 billion by 2020, followed closely by
the United States. The fastest growth over the same period will be in
Latin America, Central & Eastern Europe, and the Middle East and Africa.
"The writing is on the wall for legacy products and services, with the 3rd Platform and Innovation Accelerators driving all of the industry's growth in the next five years and beyond," added Minton. "Device sales are now dominated by mobile devices and cloud service providers represent a growing proportion of all infrastructure hardware and software sales, while big data and analytics are at the heart of the fastest-growing opportunities. Meanwhile, growth in the telecom market is already entirely dependent on mobile."
Public Cloud Services, Big Data & Analytics, and Mobile Maintain
Steady Growth
With public cloud services still growing at a
double-digit rate, cloud will continue to cannibalize from traditional
spending on infrastructure, software, and IT services. Big data and
analytics is also still expanding at a double-digit rate of growth and
is forecast to see a 12% CAGR between 2015 and 2020. Public cloud
services and big data and analytics will each provide more than $200
billion in annual revenue by 2020. Meanwhile, the explosion in
smartphone sales over the past few years and the ongoing growth of
mobile data services means that mobility is already valued at more than
$1.5 trillion in annual sales.
"There's a lot of overlap between old technologies and new opportunities, which means that even the growth of traditional products such as servers and storage are dependent on the 3rd Platform and Innovation Accelerators for future growth," said Minton. "The challenge for technology vendors is how quickly they can pivot from large, slowly-declining markets in order to achieve their full growth potential. The 2nd Platform still represents more than $1 trillion in annual ICT spending today, but the only way ahead is down."
To arrange a one-on-one briefing with Stephen Minton, please contact Sarah Murray at 781-378-2674 or sarah@attunecommunications.com. To learn more about IDC's Customer Insights & Analysis Group, please visit www.idc.com/customerinsights or email insights@idc.com.
About IDC
International Data Corporation (IDC) is the
premier global provider of market intelligence, advisory services, and
events for the information technology, telecommunications, and consumer
technology markets. With more than 1,100 analysts worldwide, IDC offers
global, regional, and local expertise on technology and industry
opportunities and trends in over 110 countries. IDC's analysis and
insight helps IT professionals, business executives, and the investment
community to make fact-based technology decisions and to achieve their
key business objectives. Founded in 1964, IDC is a wholly-owned
subsidiary of International Data Group (IDG),
the world's leading media, data and marketing services company that
activates and engages the most influential technology buyers. To learn
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