Firms forecast to spend $656B on work tech
By EP&TElectronics Engineering Supply Chain
Future of Work (FoW) office model predicted to grow exponentially in 2021, says IDC report
All aspects of how people and organizations work is evolving, enabled by 3rd Platform technologies like cloud and mobile computing and accelerated by the COVID-19 pandemic. Future of Work (FoW) is a fundamental shift in the work model to one that fosters human-machine collaboration, enables new skills and worker experiences, and supports a work environment un-bounded by time or physical space. A new forecast from the International Data Corporation (IDC) estimates FoW spending will be nearly $656 billion this year, an increase of 17.4% over 2020.
“Traditional work models do not provide the agility, scalability, and resilience required by the future enterprise. This was, of course, highlighted by the ongoing health crisis. To drive growth and competitive differentiation, organizations will invest in technologies and services that power automation, human-machine collaboration, new organizational structures and leadership styles, dynamic learning opportunities, a reimagined workplace, and a digital work environment that is not bounded by time or physical place,” said Holly Muscolino, research vice president, Content Strategies and the Future of Work.
To facilitate the transition to the new workplace and an evolving workforce, organizations are investing in a wide range of technologies and services. The largest area of investment in 2021 will be hardware, where companies are expected to purchase $228 billion in endpoint devices, enterprise hardware, infrastructure as a service (IaaS), and robotics and drones. Services, including business, IT, and connectivity services, will be the second-largest area of spending at more than $123 billion. Software will see the fastest spending growth with a compound annual growth rate (CAGR) of 21.3% over the 2020-2024 forecast period. This includes investments in enterprise applications, content and collaboration, analytics and artificial intelligence, human resources applications, security, and software development and deployment.
“Emerging technologies like artificial intelligence, the Internet of Things, and augmented/virtual reality are changing how work is getting done across all industries and across the world. Seeking automated decision support and virtual collaborative approaches, discrete and process manufacturing, the two largest spenders on Future of Work technology over the forecast period, are investing in key use cases like collaborative robotics, operational performance management, and 3D and digital product design and review for improved cost control and higher process efficiency,” said Eileen Smith, program vice president, Customer Insights and Analysis.
Collaborative robotics, operational performance management, and automated customer management.
Together, discrete and process manufacturing will account for just over one third of all Future of Work spending this year. Professional services, retail, and banking will be the next three industries in terms of FoW spend in 2021. The construction industry will see the fastest growth in FoW spending over the forecast period with a five-year CAGR of 23.7%. Media and retail will follow closely with CAGRs of 19.5% and 19.3% respectively.
The FoW use cases that will benefit from the most spending in 2021 include collaborative robotics, operational performance management, and automated customer management. The use cases that are expected to see the fastest spending growth over the 2020-2024 forecast period are adaptive skill development, interconnected collaborative workspaces, and advanced project management.
“IDC forecasts investment in technologies supporting Future of Work initiatives to exceed $1 trillion worldwide by 2024 with a robust 17% CAGR over the five-year forecast period. All aspects of how people and organizations work is evolving, enabled by 3rd Platform technologies and accelerated by the pandemic. Indeed 3rd Platform hardware, such as IoT devices, robots and drones, and IaaS, are more than one-third of the total spend, demonstrating the growing importance of the technologies enabling the reimagined workplace,” said Karen Massey, research manager, Customer Insights & Analysis.