Tuesday, 11 June 2019 08:33

Forrester sees Asia-Pac tech spending falling in 2020

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Forrester sees Asia-Pac tech spending falling in 2020 Image by skeeze from Pixabay

Growth in the Asia Pacific technology market will slow to 4% in 2020 as conditions become stormy, the American market research company Forrester has predicted.

The company said in a report that China was expected to spend US$256 billion on tech goods and services in 2019, followed by Japan with US$198 billion. The two countries together would make about 60% of the combined spend.

India was expected to spend about US$70 billion and was in the third spot.

Forrester said it expected to see less exuberance over digital transformation this year, with more pragmatic investments aimed at improving operational efficiency and agility.

"Discerning CIOs will continue to accelerate their firms’ business technology investments to help the brand differentiate and keep the revenue engine chugging," the company said.

It said the global technology market would slow to 4.5% growth in 2019 and 3.8% the following year, down from the 5% seen in 2018, with India, China and the US seeing the most growth.

On the 5G front, Forrester said China would invest most heavily in telecommunications which would constitute 57% of its tech spending in 2019. Beijing was best placed to win the emerging 5G race, having outspent the US by US$24 billion in that area since 2015.

Singapore was forecast to top tech spending among ASEAN nations in 2019 and 2020, with expenditure of US$30 billion.

In the Asia-Pacific region, software and services would post the fastest growth in 2019 and 2020, with purchases growing by 5% to 7%. Hardware spending had grown in 2018 but demand was expected to soften in 2019 and 2020 and drop to 4%.

Markets in the region were not sufficiently mature to support cloud solutions or make the most of business technology, Forrester noted.

"While the various permutations of the public cloud services market — cloud platform services, middleware, and applications — will grow from US$18 billion in 2018 to US$24 billion in 2020, cloud adoption in AP still lags that of the US and Europe. BT tech purchases in AP will grow by 4% to US$104 billion in 2019 and by 5.5% to US$110 billion in 2020 — slightly faster than overall tech spending in the region," the company said.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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