APeJ IT spend to reach $105 billion in 2017

IT services spending across the Asia Pacific excluding Japan (APeJ) region is expected to exceed $95 billion by 2021, according to the latest forecast from the IDC APeJ Semiannual Services Tracker.

Overall APeJ services spending, which includes IT and business services, is anticipated to reach almost $140 billion in 2021, from an estimated $105 billion in 2017.

"Digital transformation initiatives continues to be a major trend influencing the market over the past year. There has been an increasing demand for digital technologies such as analytics, cloud, and IoT,” said Aubrey Lim, senior market analyst for services at IDC Asia-Pacific.

“In growth countries, such as Malaysia, the Philippines and Vietnam, the growing adoption of disruptive technologies have driven the growth of professional services, particularly IT consulting and systems integration services,” said Lim.

She said that while the size of some of the deals was still relatively small, more organizations are setting aside budgets for 3rd Platform technologies, and that IT services and business processes have begun to transform from a labor-centric model into a technology-centric model of service delivery

Vendors such as IBM and Accenture are some of the leading vendors in the cloud, analytics, mobility and security services space tracked by IDC, whose strength are backed up by their robust digital capabilities. They have also continued to bolster their capabilities in the digital space through acquisitions of digital agencies.

China and Australia, the two largest markets in APeJ which accounts for half of the region's services market size, have also seen similar developments. The Chinese government has been actively promoting the development of the high-tech industry, and continues to implement its Internet+ strategy and encourage the construction of new smart cities. This is expected to drive the growth of the IT services market and other areas such as analytics and cloud.

Meanwhile, traditional outsourcing managed services are being substituted for cloud services at an accelerating pace in Australia. Enterprises now prefer to bundle cloud services with traditional capabilities as part of a single outsourced managed services engagement.

Cloud-related services spending in the APeJ region is expected to reach more than $10 billion by the end of 2017, with a CAGR growth of 18% for the 2017-2021 period.

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