Digital Transformation Market

Digital Transformation Market Insights

"The global digital transformation market is expected to grow from USD 467.54 billion in 2021 to USD 1,604.54 billion by 2028 at a CAGR of 19.3% during the forecast period."

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Introduction

Digital transformation is the use of advanced digital technologies in all areas of a business, primarily changing how to operate and bring value to customers. It uses digital technologies to create new, as well as modify existing business processes, culture, and customer experiences to meet market requirements.

The main objective of digital transformation is to improve operational performance and decrease costs. It can smoothly interact with customers and transform how customers purchase items and use services. It involves the usage of digital technologies to change a business process to become more effective and productive.

Digital Transformation Market Dynamics

Digital Transformation Market Drivers

Digital globalization – Digital globalization is growing and transforming how global interactions occur. It is also a catalyst that is reshaping the business landscape from a global perspective, compelling organizations across industries to embrace digital technologies and transform their operations to compete effectively. Additionally, the adoption of disruptive technologies like Artificial Intelligence (AI), Machine Learning (ML), etc., is further accelerating the adoption of digitalization across organizations.

Growing startups and tech-savvy companies – As of 2024, there are more than 150 million startups worldwide, and in the growing era of digitalization and technological advancements, organisations are inclining towards digitalization to optimize operations and offerings, control their data, data connections, and flow of data.

Government initiatives and regulations – Governments’ initiatives play a vital role in fostering digital globalization by creating an environment conducive to digital transformation. Governments across the globe are investing heavily in this way. For instance, U.S. government agencies are asked to “build a 21st-century digital government that delivers better digital services to the American people.” (U.S. Dept. of State).

The Digital India Mission will be utilised with the active use of technology tools for improving data governance, collection, processing, and management of data and statistics, as well as different sectoral databases (Union Budget of India 2024). Digital payments are dominated by Paytm, PhonePe, Google Pay, and BharatPe (International Trade Administration). UPI has been the major driving force in the overall growth of digital payment transactions in the country, accounting for 70% of digital payment transactions in FY 2023-24 (Ministry of Finance, India).

China identifies unique trends that differentiate its digital transformation from the rest of the world (Eye on Asia). China’s progress in AI and digitalisation is facilitated by a robust ecosystem that integrates infrastructure, data, talent, and innovation. Investments in advanced technologies, such as its expansive 5G networks and energy-efficient green data centres, provide a solid foundation for AI applications. Infrastructural advances support the deployment of high-capacity computing power, which is essential for training large-scale AI models (World Economic Forum).

Opportunities

According to the UN, micro, small, and medium-sized enterprises (MSMEs), both formal and informal, make up over 90% of companies worldwide, accounting for 70% of total employment and up to 50% of global GDP. Digital connectivity has significant benefits for MSMEs, fostering access to markets and resilience, and promoting new entrepreneurial ventures. As cited in the report, 85% of enterprises using digital technologies said they increased sales as a result, and 81% said the digital technologies helped them cut costs.

Home automation has been gaining significant popularity in recent years, as day-to-day life has become simpler due to the rapid growth of technology. Growing concerns about safety, security, convenience, and easy accessibility are driving today’s population towards smart homes. Almost everything has become digitalized and automatic.

The U.S. and Canada, the primary countries in the North American digital transformation market, have been at the forefront of technological innovation, with major tech hubs like Silicon Valley driving advancements in digital technologies. Furthermore, organizations in North America are increasingly opting for the digitization of legacy systems and making considerable investments in digital technologies to increase production efficiency and reduce operational costs.

Enterprises are now rethinking their mobility strategies in the broader context of digital transformation, as they see mobility as a critical component of digital transformation and depend on it to enhance information access, process efficiency, employee productivity, and decrease operational costs.

Challenges

Cybersecurity – Cybersecurity poses a major risk to businesses as they adopt new digital technologies. The inability to integrate old and new systems can hinder progress. A report identifies key skill gaps in cybersecurity, how artificial intelligence and advanced technology are impacting the field, the role of risk assessments and cyber insurance in enterprise security programs, and more (ISACA's 2024 State of Cybersecurity).

Resource Constraints – Limited resources such as budget, time, and skilled personnel can impose constraints on architectural decisions. These constraints may lead to trade-offs between features, quality, and development speed.

Complex Software/Technology – Organizations are struggling to recruit and retain employees with the necessary digital skills, making talent a critical factor in successful transformation. Workers are hesitant to embrace new technology, and as technology advances, end users must also adopt new skills for efficient use. The slow adoption of complex technologies results in reduced productivity and inefficiency.

Digital Transformation Market Segments' Analysis

Technology Insights

"Mobility & social media segment accounted for the largest market share."

The market is segmented into Cloud Computing, Artificial Intelligence, Big Data & Analytics, Mobility & Social Media Management, Cybersecurity, Internet Of Things, Other Technologies. Mobility & social media hold the largest digital transformation market share over the forecast period. Enterprises are nowadays rethinking their mobility strategies in the broader context of digital transformation as they see mobility as a critical component of digital transformation and depend on it to enhance information access, process efficiency, employee productivity, and decrease operational costs. By strengthening customer service initiatives, improving the credibility of an online brand, and more, social media also helps businesses initiate digital transformation projects or bring in new strategies and enhance the success of technological developments. During the forecast period, this segment is expected to witness the largest market share. Also, it is expected to register a higher CAGR during the forecast period in the APAC region.

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Component Insights

"Solutions segment accounted for the largest market share."

The market is segmented into Solutions, Services. Solutions segment to hold the largest digital transformation market share over the forecast period. To modernize the process and meet the growing demand, digital transformation technologies are being used across all industry verticals. The customer experience is very crucial with digital content. Thus, one of the key goals of digital transformation is to enhance customer experience and use it to gain a competitive edge. It could be enhanced by several things, such as the use of chatbots for delivering quick customer service 24 hours a day, the collection of data on customer behavior to better understand their needs and problem areas, and the creation as well as optimization of the customer’s path to deliver value quickly and easily. The solutions segment is anticipated to witness the largest market share over the forecast period and is expected to witness a higher CAGR.

Regional Insights

North America to hold the largest digital transformation market share over the forecast period. The market is broken down geographically into areas, namely North America, Europe, Asia-Pacific, and the Rest of the World (RoW). In terms of region, North America is expected to witness the largest market share in the global digital transformation market. The fast adoption of digital transformation technologies across different industry verticals, including manufacturing and healthcare, is boosting this market’s expansion in the region. The rapid adoption of modern and innovative technologies has been very well received in this region. Because of the significant growth in IT device-based data generation and strict laws and policies for data security, this region may offer significant opportunities to digital transformation solution providers.

Key Market Players

The following are the key players in the Digital Transformation Market (arranged alphabetically)

• Adobe (US)
• Aexonic Technologies (US)
• Alcor Solutions (US)
• Alibaba Cloud (China)
• Baidu (China)
• Brillio (US)
• Broadcom (US)
• Dempton Consulting Group (Canada)
• Equinix (US)
• Google (US)
• HCL Technologies (India)
• HPE (US)
• Happiest Minds (India)
• IBM (US)
• Interfacing (Canada)
• Kissflow (India)
• Marlabs (US)
• Microsoft (US)
• Oracle (US)
• Process Street (US)
• ProcessMaker (US)
• SAP (Germany)
• Salesforce (US)
• Scoro (UK)
• SmartStream (UK)
• Tibco Software (US)
• Yash Technologies (US)

Note: The above list does not necessarily include all the top players in the market.

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Recent Developments of Digital Transformation Market

• In December 2022, IBM signed an agreement to acquire Octo, a US-based IT modernization and digital transformation services provider. Octo exclusively served the US federal government, including defense, health, and civilian organizations.
• In December 2022, Microsoft and LSEG entered into a 10-year strategic partnership for next-generation data and analytics and cloud infrastructure solutions. Microsoft makes equity investments in LSEG through the acquisition of shares.
• In December 2022, Oracle opened a new Cloud Region in Chicago, US. It is the company’s 41^st globally and 4^th in the US Cloud Region. According to the company, industries in the US Midwest, including financial services and manufacturing would benefit from the new high-performing cloud infrastructure.
• In May 2022, SAP SE and Accenture together introduced a new joint offering that helps large businesses move to the cloud and deliver continuous innovation. The new joint offering integrates the RISE with SAP solution and SOAR with Accenture services.

Report Features

This report provides market intelligence in the most comprehensive way. The report structure has been kept such that it offers maximum business value. It provides critical insights into the market dynamics and will enable strategic decision-making for the existing market players as well as those willing to enter the market.

What Deliverables Will You Get in this Report?

Research Methodology

This strategic assessment report from Stratview Research provides a comprehensive analysis that reflects today’s digital transformation market realities and future market possibilities for the forecast period. The report segments and analyzes the market in the most detailed manner in order to provide a panoramic view of the market. The vital data/information provided in the report can play a crucial role for market participants as well as investors in the identification of the low-hanging fruits available in the market as well as to formulate the growth strategies to expedite their growth process.

This report offers high-quality insights and is the outcome of a detailed research methodology comprising extensive secondary research, rigorous primary interviews with industry stakeholders, and validation and triangulation with Stratview Research’s internal database and statistical tools. More than 1,000 authenticated secondary sources, such as company annual reports, fact books, press releases, journals, investor presentations, white papers, patents, and articles, have been leveraged to gather the data. We conducted more than 15 detailed primary interviews with market players across the value chain in all four regions and industry experts to obtain both qualitative and quantitative insights.

Customization Options

With this detailed report, Stratview Research offers one of the following free customization options to our respectable clients:

Company Profiling

• Detailed profiling of additional market players (up to three players)
• SWOT analysis of key players (up to three players)

Competitive Benchmarking

• Benchmarking of key players on the following parameters: Product portfolio, geographical reach, regional presence, and strategic alliances.

Custom Research:

Stratview Research offers custom research services across sectors. In case of any custom research requirement related to market assessment, competitive benchmarking, sourcing and procurement, target screening, and others, please send your inquiry to sales@stratviewresearch.com.