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APAC IT spending to grow by 9.3% in 2021

Organisations across the region will spend more on technologies such as AI and IoT this year, as part of their long-term investment plans to improve operational efficiency and customer service

IT spending in the Asia-Pacific (APAC) region is expected to grow by 9.3% this year as organisations look to invest more in new technologies such as artificial intelligence, robotics, cloud analytics and the internet-of-things (IoT), according to market research by IDC.

Total spending on these and other capabilities will hit $1.3tn, buoyed by the need to adapt and respond to business disruptions. At the same time, investments in non-mobile, on-premise systems, and those that lack specific functionalities associated with other new technologies, were expected to remain constant or decline.

“Use of various new technologies across organisations have taken centre stage to improve operational resilience and provide innovative offerings,” said Mario Allen Clement, a senior market analyst at IDC. “The future of organisations now heavily depends on technology investments made within the last year to either sustain or evolve as a company.”

IT decision-makers who had invested with a siloed short-term approach have also come to realise the need for a strategic long-term investment plan. Indeed, a separate IDC study found that 40% of enterprise IT budgets are now allocated to new initiatives or shifted from existing projects to address Covid-19 induced business changes.

According to IDC, most of these new initiatives were born on cloud and leveraged analytics with other innovation accelerator technologies. Their composition in the overall spend mix would increase rapidly during the forecast period.

Vinay Gupta, a research director at IDC, said the growing digital investments have improved customer satisfaction, employee productivity, operational efficiency and driven innovation. “Powering these use cases are investments in new emerging categories of technologies which must be a focus of ICT suppliers and buyers,” he added

These include investments in IoT, including hardware, software, and services, which are expected to grow by 10% in 2021 and reach $441.9bn by the end of 2025.

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IDC noted that these technology investments will drive projects that accelerate operational efficiency in areas such as production asset management, smart grid, freight monitoring, and omni-channel operations.

Investments in AI will see the fastest growth of 30% in 2021 to reach $25bn by 2025. These investments are mainly classified under customer satisfaction use cases such as automated customer service agents and sales process recommendation and automation.

Speaking at TechTarget’s recent Worldwide ROI Summit 2021 on the trends that are shaping IT buying decisions in Asia-Pacific, Nigel Lim, regional IT manager at Mitsubishi Corporation, said that digital initiatives, including the use of cloud services, have taken centre stage at his company.

“With the focus on digital transformation, there is also a stronger focus on rationalising our investments such as security and traditional IT infrastructure, whether it’s cloud or on-premise. The different departments are now more driven to see how they can modernise and rationalise as well.”

Lim said these include efforts to retire legacy IT systems as well as to manage technical debt during the transition period.

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