This year will see a tremendous increase in global spending for blockchain solutions. The latest Spending Guide prepared by International Data Corporation (IDC) forecasts a total spending of almost US$2.9 billion worldwide. This would represent over 90% increase from last year, when the total spending on blockchain reached US$1.5 billion.
The report is focused on key topics of interest for decision makers in various industries, such as:
- Blockchain market definition from the point of view of use cases;
- The size of blockchain opportunity for each region, industry and use case;
- The market drivers that impact the adoption and growth of blockchain solutions.
Worldwide Semiannual Blockchain Spending Guide covers 9 regions across the globe. The United States will be the biggest spender on blockchain solutions, with Western Europe and China completing the top 3. However, Japan and Canada are expected to reach the highest 5-year CAGR with 110% and 90%, respectively.
The Financial Sector Will Lead the Spending Race
IDC broke down its forecast by industries and placed the financial sector at the top. The company predicts that an aggregated $1.1 billion will represent spending from: banks, securities services, investment companies, as well as insurers.
The blockchain adoption trend will continue to rise among the manufacturing and resources, as well as distribution and services sectors. IDC forecasts US$653 million spending from the manufacturing industry and US$642 million from the retail and professional services industry.
Internationalisation of Trade and Payments – the Driving Force Behind Increased Spend on Blockchain Solutions
Cross border payments, as well as trade finance and post-trade settlements prompt an increased use of blockchain solutions. To improve these services, companies will spend US$453 million and US$285 million in 2019, respectively. Banks will lead the investment race for this specific use case.
The program vice president, Customer Insights & Analysis at IDC, Jessica Goepfert, explained this trend in a press release:
The use cases that comprise the blockchain opportunity are developing as swiftly as the technologies enabling it. While spending for more developed use cases in the financial sector like trade finance and cross-border payments is still healthy and growing strong, relative to six months ago we’ve seen an acceleration in spending across a variety of other areas, such as energy settlements and warranty claims.
The IDC Spending Guide report covers a total of 16 use cases, including: regulatory compliance, trade finance, record keeping, as well as digital identity.
IT Technology: the Largest Investor in Blockchain Solutions
Technology-wise, the IT and business services sectors will be responsible for almost 70% of the total global spending on the technology. Apart from services category, blockchain platform software will be the largest segment for this type of investments. This sector will also have the second largest 5-year CAGR, estimated by IDC at 81.2%. IT services are credited with a 82.8% CAGR for the 2018-2022 period.
Blockchain is maturing rapidly, and we have reached an inflection point where implementations are moving quickly beyond the pilot and proof of concept phase.
These findings are in line with the general growth trend for IT technologies. And that is away from the traditional models and heading towards blockchain.
The Turning Point for Blockchain Technology
Speaking about these findings, the research director at the IDC’s Worldwide Blockchain Strategies, James Wester, said:
Blockchain is maturing rapidly, and we have reached an inflection point where implementations are moving quickly beyond the pilot and proof of concept phase. That is why data on the actual spend on the technology is so vital: it provides the context in which blockchain is evolving.
Stacey Soohoo, research manager at IDC’s Customer Insights & Analysis, believes that blockchain has come a long way. 2017 was the year of awareness and experimentation. 2018, on the other hand, was the year of breakthroughs, “from mainstream acceptance by large enterprises to regulators recognizing their governance role in the blockchain world”.
In short, she thinks that
2019 will be a year of mainstream adoption, but will rely heavily on reshaping the ideology of a blockchain revolution.
Tamara is a marketing and PR professional, enthusiastic about crypto, blockchain and technology in general. She’s the editor at Bitcoin Australia.