The IT and communications industry is massive and vital to the world economy. During the pandemic we saw an acceleration of cloud computing and remote networking to help companies and individuals put up with a period of unprecedented isolation and worry. I want to share with you my analysis of the size, movement and importance of our industry in the two and a bit years since the beginning of 2020. My Figure above shows worldwide spending on the four categories. It shows a slow-down in 2020, strong growth (especially in hardware) in 2021 and a first quarter slump in 2022.
At a regional level spending trends in the three regions were similar (see my Figure above – where I’ve added a constant first quarter 2020 dollar line to estimate local currency growth in Asia Pacific and EMEA). There was a significant dip in Q2 2021 when lock-downs were at there worst, … and in Q1 2022 when recessionary pressures (many of which are due to the pandemic) began to bite. Measuring the market in current dollars – the thick lines, where different exchange rates for each quarter were used -, real spending in Asia Pacific appears lower and in EMEA, higher – due to the growing value of the Yen and Yuan Renimbi and falling value of the Euro and Pound against the US dollar.
Spending by businesses in the year to the end of March 2022 grew 10%, compared to an 8% uplift in consumer purchases. Within business spending growth was slightly lower in medium organizations than in large and small ones; although the differences were very small. See my Figure above for the trends.
At an industry sector level the lowest annual growth to Q1 2022 was 8% in Agriculture/Mining/Construction; the highest was 12% in manufacturing, followed by 11% in Transport/communications. See my Figure above for the trends in all 10 sectors by quarter.
Apple was the worldwide market leader of the ITC market in the year to the end of Q1 2022 (see my Figure above). Its 32.3% market share of the top 7 leaders represnted 5.3% of the whole market – a significant achievement and much higher than Samsung (17.7% of the top 7 and 2.9% of the whole) in second position and Microsoft (13.1% and 2.1% respectively) in third place.
Hardware
The total hardware market grew 9% in the year to the end of Q1 2022 to $1.651 trillion. My Figure above shows a selection of the most important offerings covered regularly on this web site; of these smart phones were the most successful – growing by 18% and giving their users access to virtual social connections at a time when meeting face-to-face has been problematic. Server spending grew 4% over the same period, while storage systems and printers grew just 2%. Incidentally raw storage grew by 26%, although spending here is almost exclusively between component and hardware suppliers and hence not counted by me in the end-user values covered in this research post.
Apple’s market leadership is strongest in the hardware market – its 36.1% share of the top 7 vendors’ revenues represented a staggering 17.4% of the total hardware market. It was followed by Samsung (25.0% of the top 7, 12.0% of the total), HP Inc. (10.7%, 12.0%), Lenovo (8.3%, 4.0%), Dell (8.1%, 3.9%), Huawei (7.0%, 3.4%) and Cisco (4.8%, 2.3%). Of the four ITC categories the top 7 vendors account for the highest percentage of the overall business – witness to scale economics and global branding.
IT services
The IT services market has two distinct tiers; Cloud services Infrastructure and Platform ‘as a Service’ grew at 21% each in the last year to March, while the more traditional maintenance, outsourcing, managed and various other services each grew by 11% (see my Figure above for the quarterly trends). In the process these Cloud services grew from 7% in Q1 2020 to 9% in Q1 2022 of total IT services spending.
Apple is also the leader here with a market share of 21.7% of the top 7 in the year and 3.0% of the whole in the year to the end of March. On the strength of its pioneering leadership of PaaS and IaaS cloud services Amazon was in second place (19.4% of the top7, 2.7% of the total – an impressive development for a company which launched its first IT services in July 2002. Accenture was third (16.7%, 2.3%), followed by Microsoft (16.1%, 2.2%), IBM (10.3%, 1.4%), SAP (8.2%, 1.1%) and China Telecom (7.5%, 1.0%). In the last few years a number of fuller range enterprise suppliers have separated their traditional IT services businesses into new companies – HPE to DXC and IBM to Kyndryl for instance – an indication that these services need different strategies in the cloud services era.
Software
Cloud ‘services’ are also a stand-out success in the software market, where SaaS has grown from 11% to 13% of the total. Spending on SaaS grew at 20% in the year to the end of March – twice the rate of physical software (e.g. non-SaaS). Customers spent $181b on SaaS services in the year in a total market worth $1,460 billion.
My Figure above shows the market shares within the top 7 software suppliers. Microsoft led with a 39.8% share (equivalent to 5.7% of the total). It was followed by Oracle (15.6%, 2.2%), IBM (12.4%, 1.8%), Apple (again! – 11.7%, 1.7%), Salesforce (the only exclusively SaaS vendor – 9.9%, 1.4%, Sony (6.6%, 0.9%) and Nintendo (4.0%, 0.6%). These sixth and seventh placed vendors owe their success to gaming software, which has boomed since the beginning of the pandemic.
Telecoms
Predating the IT industry, telecoms was the largest part of the ITC market until 2015, when it was overtaken by IT services. Worth $1.7 trillion in the year to the end of March, telecoms grew just 1% in the year. Enterprise services was the smallest offering, but grew the most at 7%. Spending on broadband and wireless each grew at 3%, while fixed-line telecoms declined by 3% in the year.
The market leaders of the telecoms market are those suppliers who’ve succeeded in building strong international businesses, going beyond the endemic national nature of the area. In the year to the end of Q1 Verizon was the leader with a 21.6% share of the top 7 vendors (7.0% of the world total). It was followed by Deutsche Telekom (20.9%, 6.8%), NTT Comms (17.1%, 5.5%), AT&T (14.2%, 4.6%), Vodafone (10.1% , 3.3%), China Telecom (8.7% , 2.8%) and Telefonica (7.6% , 2.6%).
I hope this analysis is useful to you in forming a picture of the overall ITC market. I’d welcome any comments you may have. In producing the material for this site we respect the copyright of others and expect you to do the same for our content. If you want to quote or reuse some of our ideas, data or analysis, we require you to contact us first. This includes running automated ingestion of our data for machine learning applications.