In recent years, digital technologies have become increasingly pervasive. From automotive factories to banks, digital systems enable companies to improve efficiency, build new business models, enhance operations, and transform their products.
Now, digital transformation has emerged as a business imperative for every organization, irrespective of their industry and size, to stay ahead in the competitive market.
As per the market estimates, the global digital transformation market size is anticipated to reach USD 1009.8 billion by 2025 from USD 469.8 billion in 2020. The demand for digital transformation services is expected to rise at a Compound Annual Growth Rate (CAGR) of around 16.5% over the forecast period from 2021 to 2025.
The growing adoption of digital technologies, including Artificial Intelligence (AI), cloud computing, big data, the Internet of Things (IoT), and Machine Learning (ML), is driving the growth of the digital transformation market.
Moreover, the increasing penetration of smartphones, growing demand for industrial automation, and the rising adoption of wireless communication are expected to boost the global DX market.
Lately, the coronavirus pandemic has forced radical changes in how business is conducted, pushing the global workforce online and encouraging customers to engage digitally. The demand for digital technologies, including consumer-facing applications, business-to-business e-commerce applications, and online collaboration tools, has increased exponentially amid the pandemic. This is poised to accelerate the growth of the digital transformation market size during the forecast period.
SMEs to Grow at highest CAGR
The digital transformation market is categorized into large enterprises and small and medium-sized enterprises based on organization size. Among them, the SME segment is anticipated to grow at a CAGR of around 24% during the forecast period.
The exceptional growth can be attributed to the increased awareness among SMEs about the benefits of digital transformation. The increased focus on cloud computing and other digital technologies amid the pandemic is considered to accelerate this segment.
Cloud to Drive Digital Transformation Market
By deployment type, the digital business transformation market is bifurcated into on-premises and cloud. Among them, the cloud segment is considered to propel at the highest CAGR of over 25% owing to the benefits of cloud deployment, including easy deployment, low deployment cost, high scalability, increased flexibility, and greater accessibility.
North America Leads the Market
By region, the digital transformation market is segmented into North America, Europe, Asia-Pacific, MEA, and Latin America. North American region is considered to account for the largest market share in the global digital transformation market, while Asia-Pacific is anticipated to grow at the highest CAGR during the forecast period.
In 2019, North America dominated the market, accounting for over 30% share of global revenue. This can be attributed to the presence of major digital transformation solutions providers in the region.
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