Digital Transformation Market Size, Share & Trends Report

Digital Transformation Market Size, Share & Trends Analysis Report By Type (Solution, Service), By Deployment (Hosted, On-premise), By Enterprise Size (Large, SME), By End Use (BFSI, Healthcare), And Segment Forecasts, 2021 - 2028

  • Published Date: May, 2021
  • Base Year for Estimate: 2020
  • Report ID: GVR-1-68038-851-0
  • Format: Electronic (PDF)
  • Historical Data: 2016 - 2019
  • Number of Pages: 110

Report Overview

The global digital transformation market size was valued at USD 336.14 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 23.6% from 2021 to 2028. The growing demand for advanced technology, such as the Internet of Things (IoT), across businesses and enterprises, is promoting the adoption of connected devices as well as data-rich and analytics solutions. Moreover, these solutions enable the integration of intelligence into business operations and processes to facilitate improved and effective customer engagements, while driving operational optimization. The increasing use of mobile devices, smartphones, and applications across business processes and departments is also promoting digitization and is expected to drive the market over the forecast period. Shifting from traditional to digitalized business models facilitates the introduction of additional advanced technological products and services across industries and sectors.

U.S. digital transformation market size, by solution, 2016 - 2028 (USD Billion)

Digital transformation enables organizations to improve their operational performance, customer experience, brand reputation, and customer retention ratios. Moreover, digitally transformed businesses can efficiently adapt to the changing technological landscape and can address sudden shifts in the industry, especially the one currently brought in by the Covid-19 pandemic; studies suggest that the efficiency and rate of adaptation of digitally transformed businesses to a post-pandemic era are much higher than traditional businesses.

The increasing demand for industrial automation is also one of the key drivers of the market. The rising adoption of wireless communication and other advanced technologies across several businesses and verticals is expected to drive the rate of digital transformation. Several industries, including energy & power, manufacturing, healthcare, and education, are investing in automation solutions to make an immediate and lasting difference in terms of optimization of processes. These industries have begun to shift toward complete digitization by implementing smart systems and IoT sensors across processes. However, some untapped areas continue to remain within businesses and enterprises, along with a few industries and sectors, where the rate of digitization has been traditionally low. For instance, the manufacturing sector, especially across emerging economies, has traditionally been a slow adopter of advanced techniques and technologies.

Several businesses across various industries are investing heavily in cloud platforms, mobility, and big data technologies to develop Digital Experience Platforms (DXP). Moreover, organizations that generate a vast amount of business data are adopting digital transformation solutions integrated with advanced technologies, such as quantum computing, machine learning, IoT, and blockchain, to derive actionable insights from the data. These trends are encouraging leading market players to focus on product innovation and development to offer best-in-class product quality and features at a low price point.

Low or a complete lack of budgetary allocation and proper planning for embracing digitization are the major challenges that businesses and enterprises face while implementing digital transformation. This eventually leads to high implementation times and project cancellations, which could directly impact the market growth. To implement a digital transformation plan efficiently, organizations need to invest large sums in acquiring emerging technologies and a team of professionals to guide and execute their business operations. The requirement of huge capital and lack of budgets are the key factors that influence the decision of organizations to implement digital transformation initiatives, which eventually hinder the market growth.

COVID19 Impact Insights

The COVID-19 pandemic has significantly impacted businesses across several countries globally. The major challenge for the global economy in 2020 was to ensure business continuity amid social distancing norms, lockdowns, work-from-home policies, and other operational challenges. The non-availability of digital strategies, tools, or infrastructure exacerbated the challenges for several organizations that were required to suddenly push operations online or enable employees to work remotely from their homes.

The scenario, however, led to a significant increase in awareness about the pressing need for digital transformation across most industries and helped open a few growth opportunities for the market. Organizations are increasingly realizing the benefits of digital transformation, especially in the remote work scenario that requires a business to enable the workforce to seamlessly learn, collaborate, and carry out organizational functions across remote locations.

As such, businesses and enterprises are increasingly opting for digitization to seamlessly adapt to any unforeseen future events of the scale of the COVID-19 pandemic. The ever-growing application of advanced technology is helping businesses enhance efficiency and productivity of operations and is offering them an opportunity to further implement digital transformation across their processes. This is estimated to drive the market during the forecast period.

Type Insights

The solution segment accounted for the largest revenue share of over 68% in 2020 and will remain dominant throughout the forecast period. In terms of solutions, the market is sub-segmented into analytics, cloud computing, mobility, social media, and others. The growth of the segment can be attributed to the rapidly developing technological landscape that requires businesses to timely upgrade their systems to maintain a competitive edge. In 2020, analytics captured the largest share due to the increased demand for deriving actionable insights from large volumes of business data generated by organizations. Extensive usage of smart devices & applications in processes resulted in an exponential rise in data generated across several industries and sectors.

The service segment is anticipated to register the fastest CAGR over the forecast period. The service segment is further divided into professional services and implementation & integration. The adoption of digital transformation solutions entails the need for services, such as training and support, which further drives the segment growth. The professional services segment is expected to register the highest CAGR over the forecast period. The increasing rate of digitization across several sectors is driving the demand for executive training programs to prepare existing employees to successfully adapt to the evolving technological landscape.

Deployment Insights

The on-premises segment dominated the market in 2020 accounting for a revenue share of more than 59%. Several businesses selection-premise solutions owing to the ease of customizability offered during their implementation. On-premise solutions offer high-end data security and facilitate easy compliance with various government regulations. The on-premise deployment also offers large organizations better control over confidential data. Moreover, on-premise deployment allows organizations to install a customized network of digital transformation that suits the organization’s needs most accurately and efficiently.

However, the hosted segment is expected to lead the global market registering the fastest CAGR of more than 27% from 2021 to 2028. This can be attributed to the vast advancements in information sharing technologies and the increasing use of mobile devices. Hosted deployment offers increased flexibility, greater cost-effectiveness, and enables large-scale customization of products and services. Solutions are offered via models, such as Platform as a Service (PaaS), Software as a Service (SaaS), and Infrastructure as a Service (IaaS), and can be accessed remotely on demand by end-users.

Enterprise Size Insights

The large enterprise segment captured the largest revenue share of over 59% in 2020. Large enterprises implement digital transformation solutions due to the benefits, such as cost efficiencies, ease of system integration & implementation, data privacy, and flexibility. Owing to robust economic capability, large enterprises can accelerate digital transformation and execute comprehensive digital strategy across processes in an effective manner. In addition, large enterprises do not face many restraints in terms of budget allocation. These factors are expected to drive the segment growth during the forecast period.

The Small & Medium Enterprise (SME) segment is expected to register the fastest CAGR over the forecast period. Factors, such as the increased focus on cloud computing and reduced cost of mobile devices, are making it much more suitable for SMEs to streamline their businesses and grow organically. Rising awareness among SMEs about the benefits of digitization is encouraging them to invest significantly in digital transformation to sustain and strengthen their market positions, especially in a highly competitive market.

End-use Insights

The BFSI segment accounted for the highest revenue share of over 27% in 2020 and will remain dominant throughout the forecast period. However, the healthcare segment is expected to witness the fastest CAGR from 2021 to 2028. The increasing demand for electronic data across operation channels and patient outreach is likely to accelerate the adoption of digital transformation in the healthcare segment. The mounting volume of patient data has led to the development of scalable business models to facilitate efficient patient handling. These models are projected to facilitate new business strategies and help mitigate risks associated with the cost of implementing the same. This is estimated to serve as a promising growth factor for the healthcare segment. Furthermore, digital transformation across the healthcare segment enables better decision-making and enhances the patient experience.

Europe digital transformation market share, by end use, 2020 (%)

The retail segment is witnessing an increasing adoption of emerging and innovative technologies, such as cloud computing, big data analytics, social networks, DevOps, and digital stores. Factors, such as the growing need for customer-centricity and the evolving expectations of customers, are driving the demand for digital transformation in the retail sector. Moreover, retailers are using digital e-commerce and web applications to attract new customers and retain the existing ones across all channels. Digital transformation in the retail sector involves the continuous integration of customer services, merchandising, inventory, pricing, and supply chain processes to allow consumers to maximize accessibility and drive business process optimization.

Regional Insights

North America was the largest regional market in 2020 and accounted for over 34% share of the global revenue due to high penetration of internet services and wide usage of a variety of online payment methods in the retail sector. The presence of key market players engaged in digital transformation solutions in North America will drive the regional market growth over the forecast years. Moreover, high demand for software and advanced robotic solutions, owing to extensive technology penetration across the retail, manufacturing, and automotive industries in the U.S. and Canada is expected to propel the regional market growth.

However, Asia Pacific is expected to emerge as the largest as well as the fastest-growing regional market over the forecast period owing to the increasing number of SMEs and the expanding service sector. In addition, growing awareness about the benefits of cloud technology and other technological advancements are compelling SMEs in the region to transform their businesses to ensure future growth. The rising usage of mobile devices & social media analytics along with growing online commerce is also expected to drive the regional market over the forecast period.

Key Companies & Market Share Insights

Industry players are investing in R&D activities to increase their market share and ensure improvements in their internal processes via digital transformation. Furthermore, key market players are actively engaging in new product development to improve and expand their existing product and service portfolios. Companies are also focusing on mergers, acquisitions, and strategic partnerships to develop technologically advanced products and to gain a competitive edge. For instance, in December 2019, NTT Corp. and Microsoft Corp. announced a multi-year strategic alliance aimed at providing reliable and secure solutions that would enable organizational clients to accelerate their digital transformation initiatives. Prominent players operating in the global digital transformation market include:

  • Accenture plc

  • Apple, Inc.

  • ADOBE, Inc.

  • CA Technologies (Broadcom, Inc.)

  • Dell Technologies Inc.

  • Hewlett Packard Enterprise Company

  • International Business Machines Corp.

  • Microsoft Corp.

  • Kellton Tech Solutions Ltd.

  • Google, Inc.

Digital Transformation Market Report Scope

Report Attribute

Details

Market size value in 2021

USD 400.34 billion

Revenue forecast in 2028

USD 1,759.40 billion

Growth rate

CAGR of 23.6% from 2021 to 2028

Base year for estimation

2020

Historical data

2016 - 2019

Forecast period

2021 - 2028

Quantitative units

Revenue in USD billion and CAGR from 2021 to 2028

Report coverage

Revenue forecast, company market share, competitive landscape, growth factors, and trends

Segments covered

Type, deployment, enterprise size, end-use, region

Regional scope

North America; Europe; Asia Pacific; Latin America; MEA

Country scope

U.S.; Canada; Germany; U.K.; China; India; Japan; Brazil

Key companies profiled

Accenture plc; Apple, Inc.; ADOBE, Inc.; CA Technologies (Broadcom, Inc.); Dell Technologies Inc.; Hewlett Packard Enterprise Company; International Business Machines Corp.; Microsoft Corp.; Kellton Tech Solutions Ltd.; Google, Inc.

Customization scope

Free report customization (equivalent to up to 8 analysts working days) with purchase. Addition or alteration to country, regional & segment scope

Pricing and purchase options

Avail customized purchase options to meet your exact research needs. Explore purchase options


Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2028. For the purpose of this study, Grand View Research has segmented the global digital transformation market report on the basis of type, deployment, enterprise size, end-use, and region:

  • Type Outlook (Revenue, USD Billion, 2016 - 2028)

    • Solution

      • Analytics

      • Cloud Computing

      • Mobility

      • Social Media

      • Others

    • Service

      • Professional Services

      • Implementation & Integration

  • Deployment Outlook (Revenue, USD Billion, 2016 - 2028)

    • Hosted

    • On-premise

  • Enterprise Size Outlook (Revenue, USD Billion, 2016 - 2028)

    • Large Enterprise

    • Small & Medium Enterprise (SME)

  • End-use Outlook (Revenue, USD Billion, 2016 - 2028)

    • BFSI

    • Healthcare

    • Government

    • IT & Telecom

    • Manufacturing

    • Retail

    • Others

  • Regional Outlook (Revenue, USD Billion, 2016 - 2028)

    • North America

      • U.S.

      • Canada

    • Europe

      • U.K.

      • Germany

    • Asia Pacific

      • China

      • India

      • Japan

    • Latin America

      • Brazil

    • Middle East & Africa

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