The Business Strategy
The IT industry and its development potential
IT services represent 30% of the total industry expenditure
Based on Gartner's latest Global IT Spending Report (published on January 17, 2024), IT services are projected to ascend to the top position as the largest spending category within the IT industry in 2024. The estimated value is 1,501 billion USD, representing 30% of the total value of the global IT market, which marks an 8.7% increase compared to the previous period. This surge in spending is driven by businesses' imperative to invest in projects aimed at optimizing operations and enhancing business performance, which is crucial amidst a forecasted period of economic instability.
AI, Cloud, Digital Transformation, IoT, and Big Data persist as frontrunners in driving the market forward
The generative AI market is projected to grow at a CAGR of 42% over the next ten years
The market value of Generative AI (GenAI) is expected to rise from 67 billion USD in 2023 to 1,304 billion USD in 2032, as reported by Bloomberg Intelligence. Bloomberg Intelligence also anticipates that the GenAI market will achieve a compound annual growth rate (CAGR) of 42% over the next decade.
In 2023, a new era in AI has dawned. AI has become deeply ingrained in the daily services of human life, ranging from information retrieval and advisory functions to content creation (text, images, videos), and decision support. According to The Forrester, organizations can expect a 50% increase in productivity and problem-solving capability through initiatives in AI software development.
The value of Cloud services reaches 678.8 billion USD
Gartner forecasts that global spending on Cloud services will increase by 20.4% in 2024, nearly three times the overall growth rate of the entire IT market, reaching 678.8 billion USD. In 2023, its value was 563.6 billion USD, a 17.8% rise compared to 2022. Among the various Cloud services, Infrastructure as a Service (IaaS) is projected to experience the highest growth rate at 26.6%; followed by Platform as a Service (PaaS) with a growth of 21.5%.
By 2027, Gartner forecasts that more than 70% of enterprises will employ industrial Cloud platforms to accelerate business initiatives, marking a substantial rise from the less than 15% by 2023.
In Vietnam, the Cloud computing and Data center market is acknowledged as one of ASEAN's most rapidly expanding markets, boasting over 50 service providers operating domestically and internationally.
Digital transformation is anticipated to experience a CAGR of 16.1%
According to IDC, digital transformation (DX) continues to be a global priority as organizations strive to leverage technology to optimize operational processes, enhance product and service development, and improve customer experiences with the aim of transitioning to a digital enterprise model. IDC forecasts that global spending on digital transformation will reach nearly 3,900 billion USD by 2027, with a CAGR of 16.1%. Key industries showing high demand for digital transformation include Manufacturing, Securities and Investment Services, Banking, and Insurance. Among these, the Securities and Investment Services sector is expected to experience the most rapid growth in spending on digital transformation, with an annual growth rate of 21.1% in five years, followed by Banking and Insurance, with growth rates of 20.0% and 19.2%, respectively.
In 2023, the US emerged as the leading market in terms of spending on digital transformation, accounting for 35.8% of global expenditure, followed closely by the Asia Pacific region (including Japan and China) at 33.5%. The Europe, Middle East, and Africa (EMEA) region contributed 26.8% to global spending on digital transformation initiatives.
IoT is one of the top three transformative technologies shaping the future landscape of businesses
IDC estimates global expenditure on the Internet of Things (IoT) to reach 805.7 billion USD in 2023, reflecting a 10.6% increase from the previous year. Projections suggest that investments in the IoT ecosystem will surpass 01 trillion USD by 2026, with an anticipated annual growth rate of 10.4% during the forecast period from 2023 to 2027. The Professional Services, Public Service Industry, and Retail sectors represent the subsequent significant segments in IoT expenditure, accounting for approximately 25% of the total global spending. Notably, Local/State Government and Telecommunications industries are projected to experience the most rapid spending growth during the forecast period, with annual growth rates of 12.0% and 11.7%, respectively.
IoT is anticipated to undergo significant evolution in the foreseeable future, with the proliferation of 5G networks being a pivotal catalyst for this expansion. Leveraging the advantages offered by 5G connectivity, IoT applications are positioned perfectly to witness widespread adoption across various sectors, including automotive, smart energy, healthcare, retail, and logistics.
The Big Data market is expected to reach a value of 665.7 billion USD
The Big Data and Business Analytics market is projected to reach a valuation of 225.3 billion USD by 2023, with expectations to surge to 665.7 billion USD by 2033. This growth trajectory represents a CAGR of 11.62% from 2024 to 2033. The surge in demand can be attributed to the heightened adoption of Big Data analytics software among businesses, an increased preference for Cloud-based Big Data analytics solutions by small and medium enterprises (SMEs), and the myriad benefits that Big Data and Business Analytics confer upon organizations. In Vietnam, Big Data and Data Analytics represent the second-largest proportion of annual IT investment. They are set for robust development in the near future, as Vietnam extensively applies these emerging technologies across various sectors, such as digital government, retail and e-commerce, manufacturing, and agriculture.
Numerous opportunities for growth in the automotive software market
Modern vehicles are increasingly reliant on software, with some models containing nearly 100 electronic control units and requiring up to 100 million lines of code. Software, alongside sensors and other components, is projected to represent approximately 50% of vehicle costs by 2030, more than doubling the 20% from 2020. As the global automotive industry transitions from vehicles powered by combustion engines to electric vehicles, it is estimated to spend over 238 billion USD annually by 2030. According to a recent report by Precedence Research, the global automotive software market is projected to reach 116.6 billion USD by 2032, with a CAGR of 16.7% from 2023 to 2032. The Asia Pacific automotive software market is estimated to be worth 12.7 billion USD by 2023 and is anticipated to reach approximately 44.9 billion USD by 2032, experiencing a high growth rate of 15.1% annually from 2024 to 2032. The increasing need for software, rapid technological advancements, and improved understanding among consumers are the primary factors driving the growing demand for automotive software. Moreover, North America is anticipated to emerge as a potential market for the automotive software industry's development during the period from 2024 to 2032.
The Semiconductor Industry: Opportunities and future for Vietnam
As per Gartner's report, the global semiconductor market is projected to achieve a scale of approximately 1,400 billion USD by 2029. With Vietnam entering the market, it stands to gain billion-dollar opportunities. Forecasts indicate that by 2024, Vietnam's semiconductor industry will surpass a value of 6.16 billion USD. Besides foreign entities, several technology organizations and enterprises in Vietnam, including FPT Semiconductor, CMC, and Viettel, have been engaged in chip research, design, and manufacturing. This represents a significant avenue for Vietnam to take part in the global semiconductor industry.