August 16, 2019
Worldwide spending on blockchain solutions is forecast to be nearly $15.9 billion (€14.25 billion) in 2023, according to a new update to the Worldwide semi-annual Blockchain Spending Guide from International Data Corporation (IDC).
IDC expects blockchain spending to grow at a robust pace throughout the 2018-2023 forecast period with a five-year compound annual growth rate (CAGR) of 60.2 percent. Blockchain spending in 2019 is forecast to be $2.7 billion (€2.4 billion), an increase of 80 percent over 2018.
“Behind the sometimes heated public discussions and debates over blockchain, enterprise adoption of the technology has quietly reached a tipping point across multiple use cases. Companies are recognising value from initial pilot programs and moving those projects into production,” said James Wester, Research Director, Worldwide Blockchain Strategies. “As the data in the Spending Guide indicates, the growth and adoption of blockchain by enterprises is accelerating as the benefits of using blockchain to increase efficiency and improve processes are understood. There is certainly some uncertainty still regarding the technology, specifically in the areas of governance and regulation, but adoption of blockchain for financial services, identity, trade, and other markets is encouraging.”
IDC stated that global blockchain spending will be led by the banking industry, which will account for roughly 30 percent of the worldwide total throughout the forecast. Discrete manufacturing and process manufacturing will be the next largest industries with a combined share of more than 20 percent of overall spending. Process manufacturing will also have the fastest spending growth (68.8 percent CAGR), enabling it to become the second largest industry for blockchain spending by the end of the forecast period. Four other industries (discrete manufacturing, professional services, retail, and utilities) will also grow faster than the overall market.
From a technology perspective, IT services and business services (combined) will account for nearly 70 percent of all blockchain spending in 2019 with IT services receiving slightly more investment over the forecast period. Blockchain platform software will be the largest category of spending outside of the services segment and the second fastest growing technology category overall with a five-year CAGR of 65.2 percent, following IT services with a CAGR of 66.0 percent.
Spending on blockchain solutions in the United States will be nearly $1.1 billion (€0.99 billion) in 2019, making it the largest geographic market, followed by Western Europe ($661 million/ €596 million) and China ($304 million/ €274 million). All nine regions covered in the spending guide will see phenomenal spending growth over the 2018-2023 forecast period led by Canada with five-year CAGR of 73.3 percent.
“While the debate continues as to whether cryptocurrencies are a solution in search of a problem, many organisations and enterprises have realised that blockchain solves many current and impending business problems. Many blockchain projects are gaining steam as players across the value chain realise the significant progress blockchain brings, launching much-needed transformation within and across industries and use cases,” said Stacey Soohoo, Research Manager, Customer Insights & Analysis.
“With enterprises moving past the proof-of-concept phase, it’s not a matter of whether blockchain is here to stay but rather the scope of blockchain’s adoption. Sharing data between institutions, simplifying outdated processes, and bringing transparency to business processes while also encouraging collaboration and partnerships – these are the tangible benefits that blockchain brings to the table,” Soohoo added.
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