IDC: 2020 spending shows software is becoming the backbone of business

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Spending on software across the ANZ increased 7% between 2019 and 2020 to reach $ 13 billion, according to a new report from IDC.

The Worldwide Semiannual Software Tracker for the second half of 2020 showed that while software spending only increased 3% year-on-year in the first half of last year, it accelerated significantly to register a growth of 12%. year-on-year in the second half of the year.

“This is a strong indicator that ANZ organizations are continuing their digital transformation initiatives to address weak spots uncovered by the COVID-19 pandemic, strengthen business resilience and invest in the next normal,” said Anastasia Antonova, analyst Senior Market Manager at IDC ANZ.

Public cloud deployments for software accelerated to 41% of the market in 2020, up from 35% in 2019.

The scalability and rapid deployment of cloud-based solutions was essential for ANZ companies to pivot their operations in the face of pandemic disruptions and restrictions, the company said.

Customer experience (CX) has played an important role in digital transformation initiatives and software investments in the region, as the pandemic has increased the importance of CX programs. The CRM application market grew 13% in the last quarter of 2020, compared to just 4% at the start of the year.

“In 2020, we saw an increase in customer activity and interactions online through digital channels. Current, clean, consistent and compliant customer data, coupled with AI-powered technology, is essential for forward-looking organizations to transform customer relationships and foster customer loyalty and trust, ”said Anatova .

Unsurprisingly, the need for employees and students to travel remotely has seen the collaboration software market grow by 32% in 2020 year on year in 2020.

In terms of growth, the collaborative applications market stands out from the software market, as it recorded 32% year-on-year growth in 2020.

AI platforms and integration and orchestration middleware also outperformed the overall market growth rate, increasing 27% and 15% respectively from 2019.

“Companies are moving towards an agile and adaptive operating model. Businesses need data-driven, AI-powered decision making and reliable, integrated, cross-departmental data sources for a solid foundation to then build subsequent processes. Processes also need to be integrated and streamlined to deliver operational improvement, ”said John Feng, senior market analyst at IDC ANZ.

IDC noted that the rise of digital as a means of interacting with customers and partners has led companies to refocus their efforts on software, resulting in a 14% growth in software quality and tools. life cycle.

To ensure the security, compliance and optimization of these delivery systems, managed computer software increased by 14%, while security software increased by 12%.

IDC anticipates further growth in analytics and insights into AI data as organizations focus on leveraging increasingly collected information to inform decisions and integrate processes to enable the flow of information. intra-organizational data.

“The business support that IT provided during the pandemic epidemic gave businesses more confidence in IT investments. The expectation of this return on investment is high,” Feng said.


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