According to the latest worldwide market study by International Data Corporation (IDC), vendor revenue from sales of infrastructure products for cloud IT – including public and private cloud – grew 48.4 percent year-over-year in the second quarter of 2018 (2Q18), reaching $15.4 billion.

IDC also raised its forecast for total spending (vendor recognised revenue plus channel revenue) on cloud IT infrastructure in 2018 to $62.2 billion with year-over-year growth of 31.1 percent.

Cloud infrastructure market development

Quarterly spending on public cloud IT infrastructure has more than doubled in the past three years to $10.9 billion in 2Q18 – growing 58.9 percent year-over-year.

By end of the year, public cloud will account for the majority, 68.2 percent, of the expected annual cloud IT infrastructure spending, growing at an annual rate of 36.9 percent.

In 2Q18, spending on private cloud infrastructure reached $4.6 billion, an annual increase of 28.2 percent. IDC estimates that for the full year 2018, private cloud will represent 14.8 percent of total IT infrastructure spending – growing 20.3 percent year-over-year.

The combined public and private cloud revenues accounted for 48.5 percent of the total worldwide IT infrastructure spending in 2Q18 – that's up from 43.5 percent a year ago and will account for 46.6 percent of the total worldwide IT infrastructure spending for the full year.

Spending in all technology segments in cloud IT environments is forecast to grow by double digits in 2018. Compute platforms will be the fastest growing at 46.6 percent, while spending on Ethernet switches and storage platforms will grow 18 percent and 19.2 percent year-over-year in 2018, respectively.

According to the IDC assessment, investments in all three technologies will increase across all cloud computing deployment models – public cloud, private cloud off-premises, and private cloud on-premises.

The traditional (non-cloud) IT infrastructure segment grew 21.1 percent from a year ago, a rate of growth comparable to 1Q18 and exceptional for this market segment, which is expected to decline in the coming years.

At $16.4 billion in 2Q18 it still accounted for the majority, 51.5 percent, of total worldwide IT infrastructure spending. For the full year, worldwide spending on traditional non-cloud IT infrastructure is expected to grow by 10.3 percent as the market goes through a technology refresh cycle, which will wind down by 2019.

By 2022, IDC expects that traditional non-cloud IT infrastructure will only represent 44 percent of total worldwide IT infrastructure spending – that's down from 51.5 percent in 2018. This share loss and the growing share of cloud environments in overall spending on IT infrastructure is common across all regions.

"As share of cloud environments in the overall spending on IT infrastructure continues to climb and approaches 50 percent, it is evident that cloud is now the norm. One of the tasks for enterprises now is not only to decide on what cloud resources to use but, actually, how to manage multiple cloud resources," said Natalya Yezhkova, research director at IDC.

All regions grew their cloud IT Infrastructure revenue by double digits in 2Q18. Asia-Pacific (APeJ) grew revenue the fastest, by 78.5 percent year-over-year. Within APeJ, China's cloud IT revenue almost doubled year-over-year, growing at 96.4 percent, while the rest of Asia-Pacific (excluding Japan and China) grew 50.4 percent.

Other regions among the fastest growing in 2Q18 included Latin America (47.4 percent), USA (44.9 percent), and Japan (35.8 percent).

Outlook for cloud infrastructure growth

Long-term, IDC expects spending on cloud IT infrastructure to grow at a five-year compound annual growth rate (CAGR) of 11.2 percent, reaching $82.9 billion in 2022, and accounting for 56 percent of total IT infrastructure spend.

Public cloud data centres will account for 66 percent of this amount, growing at an 11.3 percent CAGR. Spending on private cloud infrastructure will grow at a CAGR of 12 percent.

Some IT organisations prefer infrastructure solutions that offer simplified cloud deployment models for their digital transformation projects. According to the latest market study by International Data Corporation (IDC), worldwide converged systems market revenue increased 9.9 percent year-over-year to $3.5 billion during the second quarter of 2018 (2Q18).

"Data centre infrastructure convergence remains an important investment driver for companies around the world," said Sebastian Lagana, research manager at IDC. "HCI solutions helped to drive second-quarter market expansion thanks, in part, to their ability to reduce infrastructure complexity, promote consolidation, and allow IT teams to support an organisation's business objectives."

Converged systems market development

IDC's converged systems market view offers three segments: 1) certified reference systems & integrated infrastructure, 2) integrated platforms, and 3) hyperconverged systems.

The certified reference systems and integrated infrastructure market generated $1.3 billion in revenue during the second quarter, which was a year-over-year decline of 13.9 percent and represented 38.1 percent of total converged systems revenue.

Integrated platforms sales declined 12.5 percent year over year during the second quarter, generating revenues of $729.4 million. This amounted to 20.7 percent of the total converged systems market revenue.

Revenue from hyperconverged systems sales grew 78.1 percent year-over-year during the second quarter of 2018, generating $1.5 billion worth of sales. This amounted to 41.2 percent of the total converged systems market.

IDC offers two ways to rank technology suppliers within the hyperconverged systems market: by the brand of the hyperconverged solution or by the owner of the software providing the core hyperconverged capabilities.

Converged systems market segmentation

As it relates to the branded view of the hyperconverged systems market, Dell Inc. was the largest supplier with $418.7 million in revenue and a 28.8 percent share. Nutanix generated $275.3 million in branded revenue with the second largest share of 18.9 percent.

Cisco and HPE were statistically tied for the quarter, with $77.7 million and $72.0 million in revenue, or 5.3 percent and 4.9 percent in market share, respectively.

From the software ownership view of the market, systems running Nutanix's hyperconverged software represented $497.7 million in total second-quarter vendor revenue or 34.2 percent of the total market.

Systems running VMware's hyperconverged software represented $495.8 million in second quarter vendor revenue or 34.1 percent of the total market. Both amounts represent all software and hardware revenue, regardless of how it was ultimately branded.

Interested in hearing industry leaders discuss subjects like this and sharing their experiences and use-cases? Attend the Cyber Security & Cloud Expo World Series with upcoming events in Silicon Valley, London and Amsterdam to learn more.

A relatively small group of savvy executives have strategies in place to harness new business process automation technologies and thereby advance their digital transformation agenda. Meanwhile, a much larger group is closely following the market leaders, to explore their lessons-learned from pilot projects.

According to the latest worldwide market study by 451 Research, new survey results suggest most organisations are adopting or considering artificial intelligence (AI) and machine learning (ML) due to its commercial growth benefits, rather than the potential to cut jobs.

Despite being somewhat new, there's adoption momentum for the technology.

Machine learning market development

Almost 50 percent of their survey respondents have deployed or plan to deploy machine learning in their organisations within the next 12 months. Therefore, this paints a more optimistic picture of machine learning adoption than is often portrayed by other industry analysts.

"Out of many possible benefits we presented to our survey respondents, 49 percent cited gaining competitive advantage as the most significant benefit they have received from the technology," said Nick Patience, vice president at 451 Research.

Improving the customer experience came a close second, cited by 44 percent of respondents. Despite all the hype around mass job losses, lowering costs was cited by only a quarter of the survey respondents.

He added, "We think this demonstrates that AI and machine learning is an omni-purpose technology that can bring numerous benefits to organisations, beyond just lowering costs through increased automation."

That being said, there are still some major obstacles that inhibit progress. When asked "what is your organisation’s most significant barrier to using machine learning?" most cited a shortage of skilled resources as the top barrier (36 percent).

According to the 451 Research assessment, skilled talent for machine learning projects usually means proven data science skills and experience. And a lack of those capabilities is reinforced further by the finding that data access and preparation is the second biggest barrier cited by survey respondents.

However, 451 Research expects the lack of skills and experience to gradually decline as a barrier when AI tools become easier to use, and the population of users who can leverage machine learning expands.

Outlook for AI and ML application growth

Organisations will need to ensure their machine learning deployment brings the business benefits that matter most to their stakeholders. To learn more about the commercial impact that AI and machine learning might have on your organisation, consider researching the application of 'quick-start solutions' that enable rapid testing and deployment.

Moreover, some forward-thinking vendors are already addressing the bigger challenges that face enterprise developers and data scientists. To help CIOs and CTOs scale projects, smart vendors offer high-performance server platforms and integrated software that will enable organisations to extract better results from their available data and accelerate the reporting of actionable insights.

Interested in finding out more around enterprise AI use cases and how AI and big data will converge? The AI & Big Data Expo World Series is coming to Silicon Valley on November 28-29 2018 – find out more here.

Many business leaders have a much better understanding of blockchain technology than just a couple of years ago. There's been a surge in R&D, both internally and in partnership with third parties, and a recognition that blockchain has the potential to be deployed in a variety of commercial use cases.

As the number of blockchain research projects increased, awareness among the pilot participants and elsewhere in their industries gained momentum. Now other companies are beginning to consider whether they, too, should seek to gain a competitive advantage from a proof-of-concept deployment.

Blockchain market development

According to the latest worldwide market study by Juniper Research, 65 percent of survey respondent enterprises with over 10,000 employees are considering or actively engaged in blockchain deployment. This marks a significant rise from 2017 when the corresponding figure was 54 percent.

Moreover, nearly a quarter of companies considering deploying blockchain had moved beyond proof-of-concept into trials and commercial rollouts, with dramatic diversification in use cases over the past year.

Only 15 percent of proposed deployments were now related to payments – compared with 34 percent last year – with significant interest in opportunities across diverse fields including logistics, authentication and smart contracts.

The study findings also identified savings and cost reductions across a range of verticals in areas such as compliance and fraud reduction, including a forecast of more than $100 billion by 2030 in food exports.

The survey results revealed that nearly half of companies were considering using Ethereum as their blockchain; reflecting the fact that its token standardization has enabled the creation of an ecosystem of distributed applications (dApps) to be built on its chain.

Furthermore, all the responding companies which had already invested over $100,000 in blockchain indicated they would be spending at least this amount again on the technology over the next 12 months.

According to the Juniper assessment, this demonstrated initial C-suite feedback had been largely positive in most cases, sufficiently so for executives deciding to move to the next stage of integration. That said, three-quarters of respondents expect some disruption to internal or external systems.

Outlook for blockchain applications

"The findings illustrate the need for companies to engage in a prolonged period of parallel running new systems alongside the old, to resolve any issues that might arise," said James Moar, senior analyst at Juniper Research. Regardless, we should anticipate more blockchain application development in the future.

The survey participants also acknowledged IBM as the leading vendor for blockchain project planning and deployment, with the tech giant ranked first by 65 percent of respondents — that's nearly 10 times more than the second-place vendor, Microsoft (7 percent).

Why do most internet of things (IoT) analytics operations occur in the cloud? The public cloud offers a centralised location for large amounts of affordable storage and computing power. But there are many instances in which it makes more sense to perform analytics closer to the thing or activity that is generating or collecting data ­– equipment deployed at customer sites.

This is particularly true in industrial and manufacturing environments, which are familiar with the challenges of managing massive amounts of unstructured data, but may lag when it comes to the virtualisation of IT infrastructure.

Industrial cloud market development

Advances in intelligent process manufacturing, factory automation, artificial intelligence and machine learning models all benefit from edge analytics implementations, yet will likely become islands of automation without a cohesive industrial cloud computing platform.

The industrial cloud covers everything from the factory floor to the industrial campus, and it is unifying the supply chain as companies employ a combination of digital business, product, manufacturing, asset, and logistics planning to streamline operations across both internal and external processes.

Industrial cloud applications make it easier to optimise asset and process allocations by modeling the physical world and use data and subsequent insights to enable new services or improve control over environmental, health, and safety issues.

The virtualisation of business-critical infrastructure is transforming the production and distribution of goods and services throughout the supply chain, as industrial organisations shift focus to hybrid cloud computing deployments that connect and integrate on-premise IT resources with public cloud resources.

According to the latest worldwide market study by ABI Research, hybrid industrial cloud adoption will more than double over the next five years at a respectable 21.1 percent CAGR.

Initial IoT deployments in industrial markets reflect the sector's machine to machine (M2M) heritage: private cloud infrastructure as a service (IaaS). The private IaaS model served as a solid starting point for many organisations that wanted the benefit of cloud scale, but with minimal interruption to normal IT operations.

The industrial cloud platform as a service (PaaS) model extended the functional capabilities of on-premise IaaS solutions by shifting commodity tasks – such as capacity planning, software maintenance, patching — to public cloud service providers. Software as a service (SaaS) took it a step further but in the form of managed services.

"Manufacturing and industrial organisations were not born from the same digital core as the people they employ or the products they produce," said Ryan Martin, principal analyst at ABI Research. "But they also harness some of the greatest potential thanks to massive amounts of untapped plant and process log data. Harvested with the right analytical tools and guidance, these data streams can deliver value greater than the sum of their parts."

The factory floor’s historical predisposition toward on-premise solutions has been supplanted by a campus-led approach underscored by a more recent push to connect HMI, SCADA, and control networks to higher-level enterprise systems, as well as the public cloud.

However, getting to the point where all these moving pieces come together in a real-world, production environment can be messy. Many operational technology (OT) devices come up short in key areas such as interoperability and security due to the prevalence of proprietary protocols in the legacy M2M market.

Outlook for industrial cloud app development

"Most OT systems depend on infrastructure with lifetimes measured in decades, while IT systems can be upgraded frequently at little or no cost," concludes Martin.

As a result, industrial and manufacturing markets typically employ a staged technology integration strategy that favors suppliers whose hardware, software, and services can be acquired incrementally, with minimal disruption to existing operations. The hybrid IT infrastructure models can fit very well in this operational environment.

The global public cloud computing market continues its predictable growth trend. By and large, it's viewed as an IT commodity, where customers have no loyalty to cloud service providers that follow a 'race to the bottom' mindset — providing the lowest price at a given moment in time. That said, everything about this business model seems somewhat tentative.

The worldwide cloud infrastructure as a service (IaaS) market grew 29.5 percent in 2017 to reach a total revenue of $23.5 billion — that's up from $18.2 billion in 2016, according to the latest market study by Gartner. Moreover, Amazon was the leading vendor in the IaaS market during 2017, followed by Microsoft, Alibaba, Google and IBM.

Cloud IaaS market development

"The top four providers have strong IaaS offerings and saw healthy growth as IaaS adoption is being fully embraced by mainstream organizations and as cloud availability expands into new regions and countries," said Sid Nag, research director at Gartner. "Cloud-directed IT spending now constitutes more than 20 percent of the total IT budget for organizations using cloud. Many of these organizations are now using cloud to support production environments and business-critical operations."

In the IaaS market, the competitive landscape is consolidating around the current leaders. The top four providers are all hyperscale IaaS providers and represent approximately 73 percent of the total IaaS market and 47 percent of the combined IaaS and infrastructure utility services (IUS) market.

Amazon is the clear leader in the worldwide IaaS market with an estimated $12.2 billion revenue in 2017 — that's up 25 percent from 2016. Growth in 2017 was driven not only by customers that are migrating from traditional data centers to cloud IaaS, but also by customers implementing digital transformation projects, reflecting a broad range of use cases.

According to the Gartner assessment, Microsoft has secured the number two position in the IaaS market with growth of more than 98 percent on its IaaS offering, with revenue surpassing $3.1 billion in 2017. Microsoft delivers its IaaS capabilities through its Microsoft Azure offering, which is a collection of infrastructure and platform services.

In the third position, China's Alibaba growth in 2017 of 63 percent reflects the company's successful investment in research and development (R&D). Alibaba has the financial capability to continue this trend and invest in global expansion, giving them the potential to become an alternative to the leading global hyperscale cloud providers in select regions. Alibaba could disrupt the current cloud incumbents.

Outlook for cloud service adoption and growth

"This reflects a fundamental change in what and how organizations are consuming technology. Some legacy infrastructure offerings, such as IUS, are seeing lower and slower uptake that impacts the combined IaaS and IUS market," Mr. Nag said. "Additionally, a groundswell of demand for cloud-skilled personnel is forcing technology providers to change how they compete to meet this exploding demand."

There is no doubt that the IT infrastructure future will be driven by increased cloud computing adoption within on-premises data centers and in public cloud service platforms. A broad variety of hybrid cloud combinations and multi-cloud vendor deployments will be commonplace. What's unclear is the viability of cloud providers that are unable to maintain their ROI, as the competitive battle evolves over time.

Enterprise data lakes are an essential component of many digital transformation projects. Numerous insights about customers, partners and other stakeholders are extracted from these significant commercial assets. Given the benefits, IT infrastructure and associated software investment will increase to support new use cases.

According to the latest worldwide market study by International Data Corporation (IDC), revenues for big data and business analytics (BDA) solutions will reach $260 billion in 2022 with a compound annual growth rate (CAGR) of 11.9 percent over the 2017-2022 forecast period.

BDA revenues are expected to total $166 billion in 2018 — that's an increase of 11.7 percent over 2017.

Big data and analytics market development

The industries making the largest investments in big data and business analytics solutions throughout the forecast are banking, discrete manufacturing, process manufacturing, professional services, and federal or central government. Combined, these five industries will account for nearly half ($81 billion) of worldwide BDA revenues this year.

They will also be the industries with the largest BDA opportunity in 2022 when their total investment is forecast to reach $129 billion. The industries that will deliver the fastest BDA revenue growth are retail (13.5 percent CAGR), banking (13.2 percent CAGR), and professional services (12.9 percent CAGR).

"At a high level, organizations are turning to big data and analytics solutions to navigate the convergence of their physical and digital worlds," said Jessica Goepfert, program vice president at IDC.

According to the IDC assessment, the transformation takes a different shape depending on the industry. For instance, within the banking and retail sector investments are about managing and reinvigorating the customer experience. Whereas in manufacturing, they're reinventing themselves to become more high-tech.

Furthermore, over half of all BDA revenues will go to IT and business services during the course of the forecast. Services-related revenues will also be among the fastest growing areas of opportunity with a combined CAGR of 13.2 percent.

Software investments will grow to more than $90 billion in 2022, led by purchases of end-user query, reporting, and analysis tools and relational data warehouse management tools.

Two of the fastest growing BDA technology categories will be cognitive or AI software platforms (36.5 percent CAGR) and non-relational analytic data stores (30.3 percent CAGR). BDA-related purchases of servers and storage will grow at a CAGR of 7.3 percent, reaching nearly $27 billion in 2022.

Outlook for regional market growth

The US market is the largest by far, delivering nearly $88 billion in BDA revenues this year and more than half of the worldwide total throughout the five-year forecast. Western Europe is the second largest market with 2018 revenues expected to reach $35 billion, followed by the Asia-Pacific region with $23.9 billion.

Japan will be the second largest country for BDA investments in 2018, followed by the United Kingdom, Germany, and China. The countries with the fastest growth in BDA solutions are Argentina (20.8 percent CAGR), Vietnam (19.8 percent CAGR), Philippines (19.5 percent CAGR), and Indonesia (19.4 percent CAGR).

For decades, Moore's Law has been driving the advancement of traditional computing systems development, leading to the proliferation of smart devices at the edge and centralised cloud computing. However, we're now reaching the limits of legacy computing technology, and the search for another high-performance computing platform has begun. Quantum computing is the next-generation.

Total revenues generated from quantum computing services will exceed $15 billion by 2028, according to the latest worldwide market study by ABI Research. Most of these services will be cloud-based offerings.

Quantum computing market development

The demand for quantum computing services will be driven by some process hungry research and development projects as well as by the emergence of several applications including advanced artificial intelligence algorithms, next-generation cyber security encryption, traffic routing and scheduling, protein synthesis, and/or the design of advanced chemicals and materials.

These applications require a new processing paradigm that classical computers, bound by Moore’s law, cannot support. However, one should not expect quantum computers to displace traditional computing systems on-premises anytime soon.

Unlike classical computers, based on sequential processing principles, quantum computers leverage their strengths from two fundamental characteristics inspired from quantum physics — as an example,  entanglement and superposition — which make them super powerful for undertaking certain tasks, notably inter-correlated events that need to be executed in parallel.

"Classical computing is not dead, even in the post-Moore’s law era," said Lian Jye Su, principal analyst at ABI Research. "These machines will remain the ultimate processing power for executing traditional tasks such as text, video, speech processing, and signal processing, but will be potentially challenged by quantum machines when it comes executing algorithms that require massive parallel processing."

Quantum computing is, however, still in its embryonic stage of development and is not ready for large-scale commercial deployment anytime in the near to mid-term. Scalability, technology stability, reliability, and cost efficiency are the major factors the industry should address before seeing quantum computers moving beyond lab projects or very restricted and constrained commercial deployment.

According to the ABI assessment, the attempts to create quantum computers that are stable and have low error rate require heavy investment in infrastructure, software development, and human expertise.

The operation is currently performed under extreme low-temperature, high magnetic field, and in a vacuum or sterile environment, making the technology extremely difficult to scale and expensive to operate.

It's therefore not surprising that quantum computing is unlikely to achieve the distribution level of classical computers anytime within the next 10 years. The technology will remain concentrated in the cloud domain for many years to come.

"While the industry explores various hardware implementation methods by exploiting different quantum physics phenomena, they all face the harsh reality of tradeoffs, having to find the right balance between maintaining long coherence time, reducing error rates, minimizing cost, and developing scalable products," said Su.

Outlook for quantum-as-a-service

Therefore, excessive cost and extremely restrictive physical implementation will most likely limit quantum computing technology to federal government and military agencies, as well as major enterprises and the established hyperscale cloud computing providers. That said, the technology will also be made available to the general public via an 'as-a-service' business model.

ABI analysts believe that the future of cloud computing will increasingly rely on parallelism as new types of sophisticated applications and algorithms emerge. The IT infrastructure industry will need to deploy more efforts to accelerate the development of quantum computers as alternatives to their classical computer counterparts.

Becoming a digital business is very challenging because it demands new thinking, a willingness to evolve and bold ideas. As market leaders continue to embrace a digital transformation agenda, they're finding that the transition requires significant changes to organisational culture and internal systems.

A recent Gartner survey found that a relatively small number of organisations have been able to successfully scale their digital business initiatives beyond the experimentation and piloting stages.

"The reality is that digital business demands different skills, working practices, organisational models and even cultures," said Marcus Blosch, research vice president at Gartner. "To change an organisation designed for a structured, process-oriented world to one that's designed for ecosystems, adaptation, learning and experimentation is hard."

Gartner has identified six barriers that CIOs must overcome to transform their organisation into a truly digital business. Savvy CEOs and line of business (LoB) leaders will expect meaningful plans to fix these known obstacles to progress.

A change-resisting culture

Digital innovation can be successful only in a culture of collaboration. People have to be able to work across boundaries and explore new ideas. In reality, most IT organisations are stuck in a culture of change-resistant silos and hierarchies.

CIOs aiming to establish a digital culture should start small: Define a digital mindset, assemble a digital innovation team, and shield it from the rest of the organisation to let the new culture develop. Connections between the digital innovation and core teams can then be used to scale new ideas and spread the culture.

Limited sharing and collaboration

The lack of willingness to share and collaborate is a challenge not only at the ecosystem level but also inside the organisation. Issues of ownership and control of processes, information and systems make people reluctant to share their knowledge.

Digital innovation with its collaborative cross-functional teams is often very different from what typical enterprise employees are used to with regards to functions and hierarchies – resistance is inevitable.

The business isn't ready

Many business leaders are caught up in the hype around digital business. But when the CIO or CDO wants to start the transformation process, it turns out that the business doesn't have the forward-thinking talent skills or resources that are needed to succeed.

"CIOs should address the digital readiness of the organisation to get an understanding of both business and IT readiness," Blosch advised. "Then, focus on the early adopters with the willingness and openness to change and leverage digital. But keep in mind that digital may just not be relevant to certain parts of the organisation."

The ongoing talent gap

Most organisations follow a traditional pattern – organised into functions such as IT, sales and supply chain and largely focused on operations. Change can be slow in this kind of legacy  business environment.

Digital business innovation requires an organisation to adopt a different approach. People, processes and technology blend to create new business models and associated services.

Employees need new skills focused on innovation, change and creativity along with the new technologies themselves – such as artificial intelligence (AI) and the Internet of Things (IoT).

Current practices don't support the talent

Having the right talent is essential, and having the right practices lets the talent work effectively. Highly structured and slow traditional processes don't work for digital business. There are no tried and tested models to implement, but every organisation has to find the practices that are best suited to their needs.

"Some organisations may shift to a product management-based approach for digital innovations because it allows for multiple iterations. Operational innovations can follow the usual approaches until the digital business team is skilled and experienced enough to extend its reach and share the learned practices with the organisation," Blosch explained.

Change isn't easy

It's often technically challenging and expensive to make digital business work. Developing platforms, changing the organisational structure, creating an ecosystem of partners – all of this effort requires an investment in time, resources and money.

Over the long term, enterprises should build the organisational capabilities that make embracing change simpler and faster. To do that, they should develop a 'platform-based strategy' that supports continuous change and design principles and then innovate on top of that platform, allowing new services to draw from the platform and its core services.

A blockchain acts as a digital distributed ledger of transactions or records. The ledger, which stores the information or data, exists across multiple participants in a peer-to-peer network. There's no single, central repository. Distributed ledgers technology (DLT) allows new transactions to be added to an existing chain of transactions using a secure cryptographic signature.

Worldwide spending on blockchain solutions is forecast to reach $11.7 billion in 2022, according to the latest global market study by International Data Corporation (IDC).

Blockchain market development

IDC expects blockchain spending to grow rapidly throughout the 2017-2022 forecast period, with a five-year compound annual growth rate (CAGR) of 73.2 percent. Moreover, worldwide blockchain spending will reach $1.5 billion in 2018 — that's double the amount spent on the emerging technology during 2017.

The United States will see the largest blockchain investments and deliver more than 36 percent of worldwide spending throughout the forecast. Western Europe will be the next largest region for blockchain spending, followed by China and Asia-Pacific (excluding Japan and China).

All nine regions assessed by IDC will experience significant spending growth over the 2018-2022 forecast period, with Japan and Canada leading the way with CAGRs of 108.7 percent and 86.7 percent, respectively.

Blockchain spending will be led by the financial sector ($552 million in 2018), driven largely by rapid adoption in the banking industry. The distribution and services sector ($379 million in 2018) will see strong investments from the retail and professional services industries while the manufacturing and resources sector ($334 million in 2018) will be driven by the discrete and process manufacturing industries.

In the U.S. market, the distribution and services sector will see the largest blockchain investments. The financial services sector will be the leading driver in Western Europe, Middle East and Africa (MEA), China, and Asia-Pacific in 2018.

The industries that will see the fastest growth in blockchain spending will be process manufacturing (78.8 percent CAGR), professional services (77.7 percent CAGR), and banking (74.7 percent CAGR).

Within the financial sector, blockchain lends itself to a number of common use cases including regulatory compliance, cross-border payments & settlements, custody and asset tracking, and trade finance & post-trade/transaction settlements. In the distribution and services sector and the manufacturing and resources sectors, the leading use cases include asset/goods management and lot lineage/provenance.

Cross-border payments & settlements will be the use case that sees the largest spending in 2018 ($193 million), followed by lot or lineage provenance ($160 million) and trade finance & post-trade or transaction settlements ($148 million). These three use cases will remain the largest in terms of overall spending in 2022 as well.

"We continue to see the greatest spending and growth for blockchain around lot lineage and asset and goods management. Highly visible scandals combined with complex supply chains and incomplete information set the stage for investments and projects in these areas," said Jessica Goepfert, program vice president at IDC.

Outlook for blockchain technology investment 

From a technology perspective, IT services and business services (combined) will account for roughly 70 percent of all blockchain spending throughout the forecast with spending fairly well balanced across the two categories.

Furthermore, blockchain platform software will be the largest category of spending outside of the services category and one of the fastest growing categories overall, along with security software.