IT spending will reach $453.8 billion by the end of 2017, according to a new study by IDC.
This is a 2.7 per cent growth compared to 2016, and the company claims that spending will grow at a two per cent five-year CAGR rate in 2021.
Companies are quickly flocking to new technologies like virtual reality, artificial intelligence, robotics, 3D printing and the Internet of Things in a bid to drive innovation, increase customer experience and streamline business processes.
According to the report, consumer, banking and discrete manufacturing are the vertical markets with the biggest IT spending. Investments in these areas accounts for more than a third of Western European spending.
IDC is also betting on retail, professional services and telecommunications as being the fastest growing markets in 2017. They'll continue to gain momentum into 2018.
However, professional services, retail and process manufacturing possess the largest long-term growth potential. They will generate the highest 2017-2021 CAGR, the firm said.
The study is based on IDC's 20 standard vertical markets - consisting of areas like banking, insurance, securities and investment services, discrete manufacturing, process manufacturing and retail.
Andrea Minonne, a research analyst at IDC European Industry Solutions, Customer Insight, and Analysis, said companies are investing in emerging technologies to accelerate digital transformation:
"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," she said.
"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."
There's also a big data focus here. Minnone added: "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."
Michael Allen, VP EMEA at digital performance specialist Dynatrace, said that many companies are investing in microservices, SDDCs and the cloud to speed innovation, as well as AI to protect the customer experience.
"Speed and agility are everything in today's ultracompetitive digital economy. The faster companies are able to launch new online services and mobile app updates, the better their chances of outperforming their rivals," he said.
"As a result, there has been rapid adoption of microservices, dynamic cloud environments and software-defined datacentres, resulting in a major shake-up of the digital ecosystem.
"However, whist they do enable the agility that businesses are looking for, these technologies also add new layers of complexity to an already convoluted IT environment. This is making it impossible for IT teams to manage the customer experience and prevent costly downtime without the aid of advanced Artificial Intelligence (AI)."
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