Worldwide IT Spending Forecast to Reach $2.7 Trillion in 2020
A newly published update to the Worldwide Semiannual IT Spending Guide: Vertical and Company Size from International Data Corporation (IDC) finds that worldwide revenues for information technology products and services will grow from nearly $2.4 trillion in 2016 to more than $2.7 trillion in 2020. This represents a compound annual growth rate (CAGR) of 3.3% for the 2015-2020 forecast period.
Among the trends in the forecast is the positive momentum displayed in big industries like financial services and manufacturing, where companies continue to invest in 3rd Platform solutions (e.g. cloud, mobility, and Big Data) as part of their digital transformation efforts. The telecommunications industry is forecast to remain relatively sluggish, although spending levels are expected to gradually improve compared to the past several years. Combined, these four industries (banking, discrete manufacturing, process manufacturing, and telecommunications, which are also the industries with the largest IT expenditures) will generate nearly a third of worldwide IT revenues throughout the forecast.
Consumer purchases accounted for nearly a quarter of all IT revenues in 2015, thanks to the ongoing smartphone explosion. But consumer spending for PCs, tablets, and smartphones has been weakening, which will have a dampening effect on the IT market overall. Looking ahead, even the moderate growth forecast for the tablet market will be driven by commercial segments rather than consumer tablet sales.
Healthcare will remain the fastest growing industry with a five-year CAGR of 5.7% despite concerns that spending growth may have peaked. Banking, media, and professional services will also experience solid growth with CAGRs of 4.9% and combined revenues of more than $475 billion in 2020. Elsewhere, gradual improvement is expected in the public sector, although government purchases of technology will continue to lag behind much of the private sector. Similarly, IT expenditures in the natural resources industry are forecast to recover as the price of oil rebounds from recent lows.
In terms of company size, more than 45% of all IT spending worldwide will come from very large businesses (more than 1,000 employees) while the small office category (the 70-plus million small businesses with 1-9 employees) will provide roughly one quarter of all IT spending throughout the forecast period. Medium (100-499 employees) and large (500-999 employees) business will see the fastest growth in IT spending, each with a CAGR of 4.4%.
Marginal Gains in U.S. IT Sector Employment in July, CompTIA Analysis Reveals
U.S. information technology (IT) sector employment recorded its second consecutive month of growth in July, though at a significantly slower pace than in the prior month, an analysis of new Bureau of Labor Statistics data by CompTIA, the nonprofit association for the technology industry, reveals.
The IT sector added 4,000 jobs in July. Through the first seven months of 2016 IT sector employment has increased by 47,100 jobs and stood at 4,392,800 jobs at the end of July.
On the positive side of the July ledger, job gains were reported in computer systems design and IT software and services (up 8,200) and other information services, including search portals (up 1,500).
July job declines were reported in computer and electronic products manufacturing (down 3,100 jobs), data processing, hosting and related services (down 2,300) and telecommunications (down 300).
The IT workforce includes two components: employment within the IT sector and IT occupations across all other industries.
IT occupation employment declined by 88,000 jobs in July, a drop-off of 1.9 percent. For the year IT occupations are down by 46,000 jobs to an estimated 4,438,000.
The monthly IT occupation data from the Bureau of Labor Statistics includes workers of all types full-time, part-time and self-employed which can result in higher levels of volatility from month-to-month.
For the overall economy in July, total nonfarm payroll employment rose by 255,000; the unemployment rate held steady at 4.9 percent; and the number of unemployed persons was essentially unchanged at 7.8 million.
Gartner Says by 2020 "Cloud Shift" Will Affect More Than $1 Trillion in IT Spending
More than $1 trillion in IT spending will be directly or indirectly affected by the shift to cloud during the next five years, said Gartner, Inc. This will make cloud computing one of the most disruptive forces of IT spending since the early days of the digital age.
IT spending is steadily shifting from traditional IT offerings to cloud services (cloud shift). The aggregate amount of cloud shift in 2016 is estimated to reach $111 billion, increasing to $216 billion in 2020. Cloud shift rates are determined by comparing IT spending on cloud services with traditional noncloud services in the same market categories.
In addition to the direct effects of cloud shift, many markets will be affected indirectly. Identifying indirect effects can help IT asset and purchasing managers ensure they are getting the best value out of new expenditure and are protected against risk, as well as assisting them to exploit the new opportunities caused by cloud shift.
US Tech Spend: Business Technology (BT) Investments Will Rise 10% In 2016
Forrester recently released its US technology spend outlook, which includes data on tech spend and lays out how businesses should position their firms tech spending plans (see image below). Key findings show that:
While overall US tech market growth in 2016 will be subdued at 4.3% because of weak demand for hardware and licensed software, spending on business technology will increase by more than 10%, exceeding half of all new project spending.
Cloud adoption will hit a tipping point this year, as firms' use of software-as-a-service (SaaS) as a replacement for existing software will hit critical mass.
Next year will be a better year for the US tech market, and Forrester forecasts 5.1% growth overall and 8.9% growth for BT spending.
Contact Centers Need to Adopt Omni-Lingual Strategies to Support Growing Language Diversity & Heightened Consumer Expectations
The International Customer Management Institute (ICMI) in partnership with Lionbridge Technologies, Inc. released, "Lost in Translation: Leveraging Language to Deliver an Exceptional Customer Experience." The new research report is the largest study ever conducted around how contact centers support languages. The report reveals that non-primary language volume will increase and that contact centers are not currently prepared to accommodate such transition.
As organizations aim to increase their global footprint and/or serve customers of all languages, they are struggling to provide omni-lingual support for voice much less self-service and digital channels. ICMI and Lionbridge's report dives into how language is affecting the productivity and success of contact centers, and provides actionable insight into how they can deploy a more strategic and scalable approach to omni-lingual support.
Contact centers continue to experience rapid change as emerging technologies have opened new communication channel offerings. While these strides have pushed the contact center into executive level conversations, language has yet to be brought to the forefront. As a result, customer experience (CX) is suffering.
When providing customer support, language is perhaps the most important component to have control over the ability to properly and effectively communicate with the customer is crucial. However, currently 79 percent of contact centers have customers who are not native speakers of the primary language(s) that they serve. This is a large concern, since the importance of language will see an increase over the next three years where 52 percent of contact centers expect their volume of non-primary language communications to increase over this time.
ICMI and Lionbridge's report is comprised of responses from 526 professionals from every role and level in contact centers and customer service organizations. This research also explains what information contact center leaders need, as well as what steps must be taken to reverse the stagnant position on omni-channel multilingual support. The report explores the following:
Language Support Expectations
A majority of contact center leaders recognized that customers have the expectation that they will receive service in their native language when contacting a brand - however 79 percent of contact centers have customers who are not native speakers of the primary language(s) that they serve.
Language Support Challenges
The single biggest challenge in providing support beyond a contact center's primary language is finding and retaining in-house bi/multilingual agents. Nearly 20 percent of those surveyed said they provide a scripted response and make no further attempt to support customers who do not speak the contact center's primary language. Contact centers need to look at solutions that include but are not limited to in-house agents.
Language Support Strategies
The most common approach to support non-primary language contacts is to utilize in-house Bi- and/or Multilingual agents. 32 percent only informally find someone in the department that can translate or speak the language.
The Impact of Language Support on Metrics
If we don't measure quality, it is impossible to manage effectively it. 20 percent of contact centers do not even measure the quality of their non-primary language contacts.