Worldwide spending on blockchain solutions is forecast to be nearly $15.9 billion in 2023, according to a new update to the Worldwide Semiannual Blockchain Spending Guide from IDC.
IDC expects blockchain spending to grow at a robust pace throughout the 2018-2023 forecast period with a five-year compound annual growth rate (CAGR) of 60.2%. Blockchain spending in 2019 is forecast to be $2.7 billion, up 80% over 2018.
James Wester, research director, Worldwide Blockchain Strategies, confirmed that pilot programs are starting to move into production suggesting enterprises are happy with the results – mainly increased efficiency and improved processes.
"There is certainly some uncertainty still regarding the technology, specifically in the areas of governance and regulation, but adoption of blockchain for financial services, identity, trade, and other markets is encouraging," he cautioned.
Banks continue to lead global spending on the blockchain with IDC estimating the sector continuing to 30% of total spend throughout the forecast period. The two areas of most interests to banks are cross border payments & settlements and trade finance & post-trade/transaction settlements.
Four other industries (discrete manufacturing, professional services, retail, and utilities) will also grow faster than the overall market.
Discrete manufacturing and process manufacturing are the next largest industries with a combined share of more than 20% of overall spending.
Process manufacturing has the fastest spending growth (68.8% CAGR). This will make it the second-largest industry for blockchain spending by the end of the forecast period.
Spending on lot lineage/provenance and asset/goods management use cases will be led by steady investments from the discrete manufacturing, process manufacturing, and retail industries.
From a technology perspective, IT services and business services (combined) will account for nearly 70% of all blockchain spending in 2019 with IT services receiving slightly more investment over the forecast period.
Blockchain platform software will be the largest category of spending outside of the services segment and the second-fastest growing technology category overall with a five-year CAGR of 65.2%, following IT services with a CAGR of 66.0%.
"While the debate continues as to whether cryptocurrencies are a solution in search of a problem, many organisations and enterprises have realized that blockchain solves many current and impending business problems. Many blockchain projects are gaining steam as players across the value chain realize the significant progress blockchain brings, launching much-needed transformation within and across industries and use cases," said Stacey Soohoo, research manager, Customer Insights & Analysis.
She added that with enterprises moving past the proof-of-concept phase, it's not a matter of whether blockchain is here to stay but rather the scope of blockchain's adoption.
“Sharing data between institutions, simplifying outdated processes, and bringing transparency to business processes while also encouraging collaboration and partnerships – these are the tangible benefits that blockchain brings to the table," she concluded.