The Numbers Behind the Vast Global IT Economy
Technological revolution and the emergence of the internet have irreversibly changed the way we live our lives, work, communicate, and go about our personal relationships. Understanding the vast size and importance of the IT economy is often quite difficult and true data is hard to find.
Global IT spending has reached $4.8 trillion in 2018. This growth trend is expected to continue in the future, especially with the emergence of new breakthrough technologies such as AI, virtual and augmented reality, and cloud computing.
IT Spending by Region and Sector
IT revolution is a truly global phenomenon, but it is important to note that North America and Asia accounted for two-thirds of total IT spending in 2017, with each of the regions spending 33% of total global spending. Europe lags behind at 22%, while Latin America with 7% and Africa with 5% are still considered emerging markets.
According to Gartner, global IT spending is expected to grow by 3.2% in 2019. The main sectors where most of the spending will be allocated are communication services (est. $1.417 trillion), IT services (est. $1.03 trillion), devices (est. $679 billion), enterprise software (est. $431 billion), and data center systems (est. $210 billion).
With such vast economic influence of the sector and growing demand for IT products and services, challenges such as cybersecurity have come to the forefront of things that IT companies will focus on in the future.
Future Outlook of the Software Industry
In 2018 alone, enterprise software spending has reached $405 billion worldwide. The sector is also experiencing the highest growth rate, with 9.3% in 2018 and an estimated 8.5% for 2019 and 8.2% for 2020.
Software as a service (SaaS) market recorded $72.2 billion in spending in 2018, while the information security technology had further $92.1 billion in spending.
The next five years are shaping up for an explosion in the AI, AR/VR, and IoT sectors. It is only logical that this will also affect the software industry, which is vital for the development of these areas. Cybersecurity is also expected to boom through the development and use of cloud technology.
Challenges That the Software Industry Is Facing
This unprecedented growth within IT sectors does not come without challenges. In such a fast-paced industry, new technologies emerge quickly, but with them comes a number of issues and challenges.
According to Forbes, the main issues that the software industry is facing are:
- finding talent
- bringing and incorporating new technologies to the market
- balancing the risks and rewards of AI
- navigating a minefield of data governance
- security and privacy
- lack of necessary cloud infrastructure to support all these advancements.
It is no secret that the software industry, and the IT industry in general, have been fighting an uphill battle to find talent that will fuel its growth. Despite higher-than-average salary packages, working conditions, and benefits, entry into the industry is still challenging for most people.
A part of this demand can be met by the growth of the number of remote workers worldwide. However, software companies will have to make an even stronger effort to develop talent in the future.
In addition, the industry is suffering from a gender gap in employment rate, salary levels, and opportunities for advancement. As of 2018, 75% of people working in the IT industry are male.
Bringing new technologies to the market has become increasingly challenging as well. The rate at which the sector develops new technologies and services has far outpaced the ability of the market to adopt them. Recent breakthroughs in AI and voice recognition have been widely publicized but have failed to make a significant impact on the market.
At the same time, global tech giants, including software companies, are faced with increased pressure and outrage of the public in regards to the collection, use, and security of personal data. Introduction of regulations such as GDPR (General Data Protection Regulation) globally will require companies to rework their products to comply with the new regulations.
Finally, the lack of network and storage infrastructure is already proving to be a problem for many companies. This problem will only grow in the future as bandwidth and data-hungry technologies such as AI and AR/VR come to the forefront.
The global demand for storage is expected to grow by 40% in 2019, and this trend is expected to persist in the future. Bandwidth has been an ongoing problem for years now, but it is about to get a huge boost soon with the emergence of 5G technology in the next few years.
The IT industry has proven to be one of the main drivers of global development and progress. The advancements that the industry has achieved in the last decades have directly affected every single industry on the planet and changed the way we live our lives.
It comes with a number of challenges as technology advances and continues reshaping our world. The way people in the industry, regulators, and the general public react to these challenges and learn to overcome them will directly shape our future in the decades to come.
If you would like to know more details and get a better overlook of the current state of the IT industry, we strongly recommend that you check out the infographic that TechJury has created. It is full of great insights, clearly organized graphics, and stats that can help you digest the information quickly.
In the end, it is key to stay informed about the industry that will have a huge say in what our lives will look like in the years to come.