International Data Corporation (IDC) has announced a new report which examines technology spending by 12 buying segments and how this new technology purchasing behaviour differs by 15 vertical industries. As stated by the new report, the business technology spending market will grow at 6.9 percent 5 year CAGR from $236.6 billion in 2012 to $330.7 billion by 2017, while enterprise IT grows slowly at a 1.9 percent 5 year CAGR from $213.0 billion to 233.5 billion over the same forecast period.
The fresh forecast quantifies how much money business areas together with Accounting / Finance / Billing, Customer Service, Engineering, Architecture & Research, Human Resources, Industry Specific Operations, IT, Legal, Marketing, Other Horizontal Operations, Sales, Security and Risk and Supply Chain Management are spending on technology, and how this new paradigm differs by industry. Key findings takes account of:
Business funded technology is estimated to reach $275.2 billion in 2014, accounting for 55 percent of total technology spending. Industry specific operation is the largest business line, capturing approximately 45 percent of total business funded technology in Fiscal 2014
Enterprise IT spending is growing only at a 1.8 percent 5 year CAGR, far below the overall 5 year technology CAGR of 4.6 percent. Only healthcare enterprise IT is growing faster (than overall technology spending.
Marketing is the fastest growing functional area, growing at a 5 year CAGR of 9.5 percent, reaching nearly $26 billion by 2017. The marketing function within the Communications and Media industry will spend the most on marketing in 2014, with the retail vertical growing the fastest over the forecast period (11.2 percent 5 year CAGR).
“The connection between technology and business is accelerating at lightening pace as business users adopt what IDC refers to as the ‘four pillars’ — cloud, social, mobile, and analytics. Investments in these key areas are driving business funded technology to reach $275.2 billion in the United States in 2014, accounting for 55 percent of total technology spending,” alleged Eileen Smith, Program Manager, Global Technology and Industry Research Organization.
The aforementioned “four pillars” are transforming business processes as well as the technology purchase decision and budget holder. As said by the new report, buying power in the technology purchases is shifting from CIOs to CMOs, CFOs, VPs of sales, and other line executives. This transformation has immense implications on the selling, marketing and delivering of technologies. Developing a specific set of messages for each of the stakeholders in the buying process, including the CIO and CMO, CFO, and other lines of business executives is fundamental to tapping into these new buying centres.