IDC: Cloud Spending Will Top $500 Billion by 2020

A massive scaling up of digital business strategies among corporations will drive more than half of IT spending in the next 24 months and rise to 60% in 2020. In that year expenditures on cloud services and the mechanisms to support them will exceed $500 billion, triple today’s total. Those are some of the predictions International Data Corporation report on what it has christened the DX—or digital transformation—economy.

“In the next two years, two thirds of Global 2000 CEOs will put DX at the center of their growth and profitability strategies. By the end of this decade, IDC predicts that the percentage of enterprises with advanced DX strategies and implementations will more than double,” said Frank Gens, IDC SVP and chief analyst, in a webcast introducing the study yesterday.

By 2018, IDC predicts, the flow of external data into organizations embracing the movement will increase by as much as five times. Also by that year, the number of connected devices will double to in excess of 22 billion, driving the development of 200,000 new apps and solutions. Most active in the Internet of Things, says IDC, will be the manufacturing, transportation, retail, and healthcare industries.

Other developments to watch for in the DX economy:

  • Spending on cognitive systems for processing data will scale up dramatically as more than half of developer teams—as opposed to only 1% today—will embed cognitive services into their apps.
  • Eight out of 10 B2C and six out of 10 B2B enterprises will overhaul their customer engagement systems—or “digital front doors”—to support anywhere from 1,000 to 10,000 times more customers and customer touchpoints than they do today.
  • All companies will become software companies as they increasingly depend on software development teams to increase their “innovation capacity.” IDC predicts that, by 2018, subscribing members of the DX economy will have doubled the size of their developer staffs.

A side effect of the DX economy, forecasts IDC, will be a consolidation of the IT industry in which a third of current suppliers will be acquired, merged, or downsized.

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