Report: Digital transformation spending will catapult to $6.8 trillion by 2023

buildings
IDC forecasts that 65% of the world's GDP will be digitalized by 2022. (Pixabay)

IDC has forecast that global spending on digital transformation (DX) will reach a staggering $6.8 trillion globally by 2023. Furthermore, due to the impact of Covid-19, International Data Corporation (IDC) forecast that 65% of the world’s GDP would be digitized by 2022.

One of the constant refrains this year related to Covid-19 is that the pandemic has accelerated companies' digital transformations.

With millions of employees working from home, the pandemic has led to an increased focus on putting more workloads and applications, such Microsoft 365 or Salesforce, into various cloud.

FREE DAILY NEWSLETTER

Like this story? Subscribe to FierceTelecom!

The Telecom industry is an ever-changing world where big ideas come along daily. Our subscribers rely on FierceTelecom as their must-read source for the latest news, analysis and data on the intersection of telecom and media. Sign up today to get telecom news and updates delivered to your inbox and read on the go.

In general, companies that had already embraced digital transformations and software-defined networking (SDN) were better able to pivot their resources during the pandemic. Prior to Covid-19, digital transformations were widely viewed as a way to reap cost efficiencies.

RELATED: Doyle—Covid-19 disruptions fuel digital transformations across three sectors

"The demand for IT has changed dramatically as a result of COVID-19, with almost every segment of the market being impacted by massive changes in customer behavior," said IDC Global President Del Prete. "We predict that direct investment in digital transformation will grow at a healthy compound annual growth rate (CAGR) of 15.5% globally between 2020 and 2023, while non-DX ICT investment will contract at a CAGR of -1.4% over the same period.

"And as more and more companies become fully transformed from the less than 20% of enterprises today, relative GDP from digitalized products and services will expand exponentially."

RELATED: AT&T's Saxena—How transformation raises all boats during outset of COVID-19 pandemic

Service providers are well equipped to help businesses with their digital transformations and shift to SDN as some of them, such as AT&T and Orange, have started or completed their own internal digital transformation journeys.

The increased pace of digital transformations by organizations of all stripes will be a boon to service providers, system integrators and vendors.