The digital transformation of global enterprises has reached a stage of sustained development, which has also prompted enterprises to continuously increase their efforts in digitalization. investment in transformation.

Data from the 2023 V1 version of IDC’s “Worldwide Digital Transformation Spending Guide” show that global digital transformation investment will exceed US$1.5 trillion in 2022, and is expected to reach 1.5 trillion US dollars in 2026. It has passed the US$3 trillion mark, and the five-year compound growth rate (CAGR) from 2021 to 2026 is approximately 16.7%. As the global digital transformation market is booming, the application scope of cloud computing, artificial intelligence, big data, 5G and other technologies continues to expand.
Focusing on the Chinese market, with the support of favorable policies such as the “Overall Layout Plan for the Construction of Digital China”, end users from all walks of life have increasing demand for digital transformation, and China’s digital transformation market will maintain rapid growth. The latest data from IDC shows that by 2026, China’s digital transformation expenditure is expected to exceed US$600 billion, with a five-year compound growth rate of 17.9%, ranking among the highest in the world.

Hardware dominates digital transformation spending in China, but spending on software and cloud deployment models is growing faster.
Hardware spending accounts for the largest proportion of China’s digital transformation spending in the five-year forecast, and nearly 50% of the investment share will go to the hardware market in the next five years. The “Report on the Development of the Digital Economy” released by the China Development and Reform Commission pointed out that our country should appropriately lay out digital infrastructure in advance and consolidate the foundation for the development of China’s digital economy. Strengthening the layout of digital infrastructure, such as the digitalization and intelligent transformation of traditional infrastructure, improving the level of application infrastructure, and optimizing computing power of the system, have become important investment directions for hardware expenditures. IDC predicts that China’s digital transformation hardware market spending will exceed US$300 billion by 2026.
Furthermore, the software market has the highest growth. The five-year compound growth rate (CAGR) of the software market from 2021 to 2026 exceeds 20%, and the growth rate exceeds 30% of the overall growth rate of digital transformation. The software market defined by IDC mainly consists of software markets such as Applications Development and Deployment, Applications, and System Infrastructure Software.
In terms of deployment mode , cloud computing is a key technology to achieve digital goals and support hybrid work models. Strengthening digital investment in the cloud-related market has become a major trend. Cloud-related market spending will account for 12.7% of the overall digital transformation spending in 2021, and will account for nearly 20% in 2026, with a compound growth rate (CAGR) of 27.9% from 2021 to 2026.

Industries and application scenarios
From the perspective of end users, industries such as manufacturing and government are still the main spenders on digital transformation, with their combined spending accounting for more than 40%. Among them, Robotic Manufacturing and Autonomic Operations are application scenarios with high investment in digital transformation of the manufacturing industry. In addition, by using digital technologies such as the Internet and cloud native technologies to build their own business systems to empower the transformation and upgrading of traditional industries, retail companies will continue to increase investment in digital transformation to achieve comprehensive digital transformation. IDC data shows that the growth rate of the retail industry in the next five years will be as high as 22.0%, and its digital transformation process will lead the development of the industry.
IDC’s “Expenditure Guide” is committed to providing data support for IT manufacturers, industry users and investment/financial institutions in strategic planning, product research and development, IT expenditure and investment planning. The “Expenditure Guide” series of products focuses on hot areas of IT, predicts market size and growth rate from multiple dimensions, and helps manufacturers explore market potential; guide industry users to carry out IT planning based on hot technologies and application scenarios; and help analyze the development prospects of specific markets. Investment and financial institutions make better decisions. IDC’s “Global Digital Transformation Spending Guide” provides users with accurate and high-quality forecasts for the development of the global digital transformation market in the next five years, aiming to provide users with more comprehensive digital transformation market insights and research.

Based on idc.com story by Frank Wang, Yvonne Liu, and Maggie Xie, JUNE 9, 2023