The IDC has reported in a new study that IT spend in western Europe will total more than $450 billion in 2017, a 2.7% increase on last year. Notably, it claims that investments in next-generation technologies such as the IoT, AI and cognitive computing are driving this increased demand.
IT spending will continue to grow at a 2.0% five-year CAGR in 2021. Investments in 3rd Platform solutions and Innovation Accelerator technologies — such as augmented reality/virtual reality (AR/VR), artificial intelligence (AI) and cognitive, robotics, 3D printing, and Internet of Things (IoT) — will drive demand as companies strive to innovate, increase customer experience, and streamline business processes.
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In 2017, consumer, banking, and discrete manufacturing will be the vertical markets with the biggest IT spending, accounting for over a third of overall Western European spend. IDC forecasts that retail, professional services, and telecommunications will be the fastest growing markets in 2017, and they will continue to lead in 2018. In the long term, professional services, retail, and process manufacturing will generate the fastest 2017–2021 CAGR.
“Traditional technologies such as mobility, social media, cloud, and big data helped companies to introduce change and move from a traditional approach to a more digitised one. With next-generation technologies, companies will go the extra mile, move one step ahead of the competition, and fully embrace digital transformation. This will be a win-win game, from which both businesses and their customers will benefit as companies introduce a more advanced approach into their businesses, optimising processes and bringing extreme automation. On the other hand, the large amount of data that customers produce will allow companies to understand what they must focus on. This will result in more personalised products or services and increased customer satisfaction,” said Andrea Minonne, research analyst, IDC European Industry Solutions, Customer Insight, and Analysis.
In the study, IT spending forecasts are segmented into IDC’s 20 standard vertical markets: banking, insurance, securities and investment services, discrete manufacturing, process manufacturing, retail, wholesale, professional services, personal and consumer services, healthcare provider, transportation, telecommunications, media, utilities, construction, resource industries, federal/central government, state/local government, education, and consumer.
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Commenting on this prediction, Senthil Ravindran, EVP and Head, xTech Labs at Virtusa, said: “As IDC’s figures show, banking and financial services is set to be one of the biggest IT spenders of 2017. This illustrates that while banking is often unfairly maligned for being behind the curve, it is one of the sectors most keen to adopt new technologies to deliver better digital experiences to customers.”
“Emerging disruptive technologies – such as AI/machine learning, robotics, AR/VR and blockchain – are building on the foundations laid by technologies like mobile and cloud, and beginning to impact legacy banking business models. While some of these technologies are still nascent, we are seeing early adopters even amongst the large, established banks build new business models around these technologies. This interest in disruptive technologies will also lead to greater collaboration with fintechs and banking startups that have the expertise in technology, but less experience of financial services.”