The Digital Transformation Market was valued at USD 342.20 billion in 2019 and is expected to reach USD 923.80 billion by 2025, at a CAGR of 18% over the forecast period 2020 - 2025. Digital Transformation refers to the use of digital technology to solve traditional problems. Shifting from conventional to new digitalized business models facilitates the introduction of more technologically advanced products and services. Digital transformation helps organizations in improving their brand’s reputation, customer experience, and customer retention ratios through the implementation of the software. Digitally transformed organizations can adapt to the evolving technological landscape and can tackle sudden shifts in the industry.
- Companies are building a robust infrastructure due to increased demand, and there is increased adoption of new technologies and solutions, further supporting the market growth. Due to growing competition within the industries, investments in technology is further increased to gain a competitive edge in the market.
- Owing to the integration of AI, machine learning and rapid deployment of IoT and connected infrastructure, the market is expected to witness rapid growth over the forecast period.
- The primary driver for the digital transformation market is the increased demand for industrial automation. Automation involves the integration of mechanical systems with IT. The adoption of wireless communication is booming, and the penetration of this technology will expand in the future, driving the rate of digital transformation.
- The primary factor responsible for hindering the growth of the digital transformation is the security and privacy concerns for confidential data while executing digital enablement technologies.
Scope of the Report
Digital transformation refers to a fundamental rethinking of how an organization uses technology, people, and processes to change their business performance in a manner that is more beneficial than the previous versions. Digital transformation supports organizations in mitigating risks and handling disruption such as marketplace fluctuation, corporate restructuring, and geopolitical environment that are unanticipated, and can lead to unpredictable results.
Key Market Trends
Automotive Expected to Have Significant Growth
- The automotive industry is one of the largest and earliest adopters of digitalization strategies to enhance its manufacturing activities. In recent times, initiatives, like Industry 4.0, have increased the investments from the automotive industry toward digitalization, with a specific demand for smart manufacturing and designing solutions.
- As of 2018, it is estimated that only one-third of the automotive companies, globally, have the digital capabilities required for digital transformation. Over the forecast period, this scenario is expected to open significant opportunities for the digital transformation in the auto industry
- With the advent of electric cars and advanced driver-assistance systems (ADAS), penetrations of AI solutions and sophisticated automation solutions are finding several applications in the automotive industry. Over the forecast period, the automotive sector is expected to be one of the most significant sources of demand for IT services.
Europe Expected to Have Significant Growth
- Europe is one of the largest markets for digital transformation solutions, globally. The region has a massive demand for robotics and software solutions alike, owing to high manufacturing activity in several countries. According to the 2018 estimates of IFR, the region has the highest robot density, with an average value of 106 units per 10,000 workers.
- In countries, like Spain, more than 83% of the vehicles manufactured are destined for exports. Annually, automotive exports account for 20% of the total export trade, and represent 10% of GDP in Spain. Such market scenario is forcing the governments in the region to establish better policies to attract foreign investment. Such factors are expected to strengthen the demand for digital transformation technologies from the region’s auto industry.
- There is a constant demand from countries, like Germany, makes it one of the largest sources of demand for digital transformation solutions in the world. Same is the case with software solutions. According to the Joint Research Center, European Union, more than 59% of the startups in the country are digital startups, which are increasing the availability of digital transformation solutions to small- and medium-sized players in the region.
The digital transformation market is consolidated. The players have adopted various growth strategies such as partnerships, agreements, and collaborations; and new product launches and product enhancements to further expand their presence in the market and broaden their customer base.
- February 2019 - Microsoft collaborated with Telecom Egypt, to extend its global cloud network to Egypt. Telecom Egypt will provide low-latency connectivity into and across Egypt to help enhance performance and increase reliability for customers of Microsoft services. This network collaboration will further enhance the delivery of Microsoft services to customers in Egypt, North Africa, and the Middle East.
- August 2018 - Dell EMC launched the new Ready Solutions for AI, with specialized designs for Machine Learning with Hadoop and Deep Learning with NVIDIA. The Dell EMC Ready Solutions simplifies AI environments, delivers faster & deeper insights, and leverages Dell EMC's proven expertise to help organizations realize the full potential of AI.
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