Advertising and marketing budgets may only just have started to emerge from Covid but the data and analytics industry has escaped unscathed from the pandemic, with the global sector forecast to reach $215.7bn (€183.6bn) this year, an increase of 10.1% over 2020, with the UK alone expected to surpass $10bn in spend in 2021.
That is according to a new update to the Worldwide Big Data and Analytics Spending Guide from IDC, which also shows spending will gain strength over the next five years as the global economy recovers from the pandemic. The compound annual growth rate (CAGR) for global spending over the 2021-2025 forecast period will be 12.8%, meaning the market will be worth more than $390bn by then.
Telecoms will see the fastest growth in spending over the next five years, although three industries – banking, manufacturing, and professional services – will account for one third of all spend this year.
The next three industries – process manufacturing, telecoms, and government – will collectively spend nearly $47bn this year, IDC reports.
IDC customer insights and analysis program VP Jessica Goepfert said: “As executives seek solutions to enable better, faster decisions, we’re seeing relatively healthy spending across all industries. Leveraging data for insights into everything from internal business operations to the customer journey is top of mind and of strategic importance.
“Firms in the professional services industry, for instance, are using data and analytics to support their 360-degree customer and client management efforts, as well as advanced project management initiatives.”
Over half of all data and analytics spending in 2021 will go on services, with tech services accounting for more than $85bn of the total and business services making up the remainder.
The second largest segment this year will be software, which will see investments totalling $82bn.
Almost half of this total will go to three types of applications – end-user query, reporting, and analysis tools; relational data warehouses; and nonrelational analytic data stores – with the remainder spread across the 13 software categories. Software will also be the fastest growing segment of spend with a five-year CAGR of 15.1%.
On a geographic basis, the US is the largest market with more than $110bn in spending this year, with Japan and China next, reaching $12.4bn and $11.9bn, respectively. The UK is the only other country expected to surpass $10bn in spending this year.
IDC research manager for analytics and intelligent automation services Jennifer Hamel commented: “Unlike many other areas of the tech services market, data and analytics services continued to grow in 2020 as organisations relied on data insights and intelligent automation solutions to survive the pandemic.
“The next phase of digital resiliency will spur increased investment in services to address both lingering and new challenges related to enterprise intelligence initiatives.”
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