Worldwide spending on blockchain solutions is forecast to reach $2.1 billion in 2018, more than double the $945 million spent in 2017, according to analyst firm IDC.
IDC said it expects blockchain spending to grow at a robust pace over the 2016-2021 forecast period with a five-year compound annual growth rate (CAGR) of 81.2% and total spending of $9.2 billion in 2021.
“Interest and investment in blockchain and distributed ledger technology (DLT) is accelerating as enterprises aggregate data into secure, sequential, and immutable blockchain ledgers, transforming their businesses and operations,” said Bill Fearnley Jr., research director for worldwide blockchain strategies at IDC.
“Many technology vendors and service providers are collaborating and working with consortiums such as the Enterprise Ethereum Alliance and the Hyperledger Projects to develop innovative solutions that improve processes such as post-trade processing, tracking and tracing shipments in the supply chain, and transaction records for auditing and compliance. Also, multiple regulators and central banks have made positive comments about blockchain and DLT and this will help to accelerate demand in regulated industries such as financial services and healthcare.”
“2017 was the year of experimentation as enterprises realized both the benefits and challenges of blockchain. 2018 will be a crucial stage for enterprises as they make a huge leap from proof-of-concept projects to full blockchain deployments,” said Stacey Soohoo, research manager for customer insights and analysis at IDC.
“As a leader in blockchain innovation and integration, the US will continue to invest in blockchain throughout the forecast, spending heavily in financial services, manufacturing, and other industries.”
Blockchain spending will be led by the financial sector ($754 million in 2018), driven largely by rapid adoption in the banking industry.
The distribution and services sector ($510 million in 2018) will see strong investments from the retail and professional services industries while the manufacturing and resources sector ($448 million in 2018) will be driven by the discrete and process manufacturing industries.
“There are a multitude of potential new use cases for blockchain, as transactions and records are the lifeblood of just about every organization,” said Jessica Goepfert, program director for customer insights and analysis at IDC.
“However, we are seeing initial blockchain spending to transform existing highly manual and inefficient processes such as cross-border payments, provenance and post transaction settlements. These are areas of existing pain for many firms, and thus blockchain presents an attractive value proposition.”
From a technology perspective, IT services and business services (combined) will account for roughly 75% of all blockchain spending throughout the forecast with spending fairly well balanced across the two categories.
Blockchain platform software will be the largest category of spending outside of the services category and one of the fastest growing categories overall, along with security software.