Forrester’s Global Tech Market Forecast, 2022 To 2027, forecasts that in 2023, global technology spending will grow 4.7% to reach US$4.4 trillion. Asia Pacific (APAC) will experience the fastest regional tech spend growth, despite macroeconomic challenges of slowing liquidity, tight labour markets, and geopolitical turmoil.
By 2027, tech software and IT services will capture 66% of global tech spend — up from 60% pre-pandemic. A boost in cloud application and platform services will aid this growth. Forrester forecasts that the public cloud market will reach US$1 trillion by 2026, capturing nearly a quarter of global tech spend.
Despite facing a difficult 2023, tech executives can accelerate their organisations’ growth by both improving operational efficiency and investing in areas such as research and development, cybersecurity, and enterprise digital transformation.
Tech trends in APAC in 2023
According to Himank Joshi, Forrester's forecast analyst, tech spending growth in APAC will be majorly driven by software and services. "Software and service share of the overall tech spending in Asia will rise from 40% in 2022 to 44% by 2027. Overall software and services spending will grow at a CAGR of 8.6% through 2027, almost twice the CAGR of all other tech spending combined," he added.
Joshi identified spending on cloud technologies, cybersecurity and AI as growing fastest in APAC outpacing other regions. He also noted that growth in telecom service spending will also remain high for countries such as India where 5G rollout is expected to gather steam in the near term.
Asked for his take on limiting factors in the region, he pointed out that the macro picture will play a significant role in enterprise tech budgets and overall spending levels.
"Further increases to interest rates and elevated levels of inflation impose a major risk in the near term which can continue to foster a more challenging selling environment for tech vendors, we started to see this materialize in Q2 2022 in longer sales cycle and more deal scrutiny for technology purchases."
Himank Joshi
He opined if inflation is kept in check and interest rates realign to government targets, we can expect a quick snapback of IT budgets in APAC.
