So predicts a report from IDC, which notes that while the financial services sector is focused on cloud, mobility and analytics, other sectors, such as manufacturing, oil and gas and utilities, will invest heavily in the Internet of Things (IoT).
September 27, 2021
During the expected post-pandemic recovery period, IT spending will contract in some areas but will undoubtedly increase in others, such as mobility, cloud, big data and analytics and social platforms. This is predicted by analyst firm IDC in its 3rd Platform Industry Spending Guides, in which it notes that spending by enterprises and public organisations on these technologies will experience double-digit growth over the recovery period.
Analyst Karen Massey qualifies, however, that investment priorities vary by sector. The financial services (banking, securities and investment services, and insurance industries) will focus primarily on investing in cloud, mobility and big data and analytics, while others such as manufacturing, oil and gas and utilities will focus on the Internet of Things (IoT).
Mobility, cloud, big data and social platforms will account for the largest technology investment in the banking sector by 2022, with cloud and mobility alone accounting for 30% or more of all spending in the sector over the forecast. With a compound annual growth rate (CAGR) of 11.5%, spending on big data and analytics will almost equal mobility by the end of the forecast, while cloud spending will take on more prominence with a five-year CAGR of 16.2%.
Consumer banking will remain the largest sub-industry, accounting for more than half of all technology spending in the sector over the forecast period.
The insurance and securities and investment services sectors will follow a similar spending trajectory to banking, with investments in cloud and mobility leading the way, closely followed by big data and analytics. Both sectors will also see similar levels of investment in next-generation security systems and AI. One area where the two industries will diverge is IoT spending, which will be notably higher for the insurance industry, led by the property and casualty sub-industry.
Manufacturing will be the segment investing the most in third platform technologies (which is what IDC calls the integration of mobile technology, big data and analytics, social media, cloud technology and the internet of things), with spending set to grow to more than $800bn by 2024.
IoT will be the largest area of investment, accounting for more than 30% of industry IT spending over the forecast. Robotics will be the second largest area of spending, with strong investments from the automotive, consumer packaged goods and aerospace and defence sub-industries. Robotics and AI systems will experience some of the fastest spending growth, with five-year annualised growth rates of 19.2% and 19.9%, respectively.
Public sector, oil and gas
IoT will also be the largest area of investment in both the utilities and oil and gas sectors, as they increase the use of sensors in smart meters and for distribution automation. Cloud and mobility will see similar levels of investment at the beginning of the forecast, but cloud will benefit from significantly higher spending growth throughout the forecast in both sectors. Robotics will also overtake cloud and mobility at the end of the forecast to become the second largest area of investment in the oil and gas industry
Public spending on third platform technologies is projected to grow to nearly $300 billion by 2024, with a CAGR of 11.6%. IoT will be the largest area of spending, accounting for more than a third of all investments in the third platform, as governments at all levels invest in public safety and emergency response programmes, public infrastructure asset management and intelligent transport systems. Mobility and cloud will be the next largest areas of investment, with cloud spending outpacing mobility by the end of the forecast, with a five-year CAGR of 12.9%. AR/VR and AI systems will see the strongest growth in spending, with a CAGR of 84.0% and 25.8% respectively.
In the retail sector, IoT investments will account for almost a quarter of all technology spending as organisations focus on omni-channel operations. Cloud and mobility will account for another quarter of all retail spending, while augmented and virtual reality systems, robotics and AI will see the biggest growth in spending as companies invest in customer experience and automation.
While cloud is the top spending priority for large FMCG companies, food retailers will see more IoT alongside cloud and mobility.
IoT is also the largest area of spending within the healthcare industry, where providers (hospitals, medical clinics and other suppliers) are using remote sensors for bedside telemetry, asset tracking and remote health monitoring.
Mobility and cloud will be the next largest spending areas, with cloud expected to grow at a notably faster rate (14% CAGR). Investments in artificial intelligence and robotics systems will also see strong growth throughout the forecast, with a five-year CAGR of 21% and 16.8% respectively.