Digital Transformation Market Report 2025

The digital transformation market size has grown exponentially in recent years. It will grow from $1.75 trillion in 2024 to $2.11 trillion in 2025 at a compound annual growth rate (CAGR) of 20.6%. The growth in the historic period can be attributed to strong economic growth in emerging markets, growing adoption of digital transformation in healthcare, increase in data volume generation, and increasing adoption of 5g networks.

The digital transformation market size is expected to see exponential growth in the next few years. It will grow to $4.41 trillion in 2029 at a compound annual growth rate (CAGR) of 20.2%. The growth in the forecast period can be attributed to the increasing availability of mobile devices, government initiatives, increasing Internet penetration, increasing spending on marketing and advertising activities by enterprises, and increasing demand for industrial automation. Major trends in the forecast period include artificial intelligence capabilities, digital transformation series, creative networks, product launches, Internet of things, startups in big data and analytics, and strategic partnership and collaboration.

The growing implementation of machine learning and artificial intelligence is anticipated to propel the expansion of the digital transformation market in the future. Digital transformation offers traditional businesses solutions such as cloud computing, big data and analytics, data management, and advanced features like artificial intelligence and machine learning. These solutions assist in optimizing business operations, reducing operational efforts, and enhancing efficiency. Consequently, their utilization has increased across various sectors, including healthcare, banking, transportation, manufacturing, and more, boosting demand in the digital transformation market. For example, in May 2022, the International Business Machines Corporation (IBM), a technology company based in the US, reported that 35% of businesses globally utilized artificial intelligence (AI) in 2022, marking a 4% rise from 2021. Furthermore, there was a 13% increase in organizations adopting AI in 2022 compared to the previous year. Therefore, the growing adoption of machine learning and AI significantly drives the digital transformation market.

An increasing trend toward remote work and collaboration in developed nations is projected to drive the growth of the digital transformation market throughout the forecast period. Remote work and collaboration involve individuals or teams effectively working together from various locations using digital tools and technologies. This trend has been spurred by technological advancements, evolving work preferences, and the necessity for flexibility in response to global events like the COVID-19 pandemic. Digital technologies that support remote work include collaboration tools, cloud computing, and communication platforms, which enable seamless connectivity, project management, and real-time interaction among dispersed teams. For example, in February 2023, Buffer, a US-based social media management platform, reported that 98% of respondents desire to work remotely, at least part-time, for the remainder of their careers, up from 97% in 2022. Moreover, 98% would recommend remote work to others, also an increase from 97% the previous year. Thus, the growing shift toward remote work and collaboration is expected to significantly contribute to the expansion of the digital transformation market.

The capabilities of artificial intelligence are emerging as a significant trend in the digital transformation market. AI is increasingly driving digital transformation through innovations such as machine learning, natural language processing (NLP), data labeling platforms, and predictive analytics. For example, in June 2024, Innovation, Science and Economic Development Canada (ISED), a department of the Canadian government, reported that the AI market is expected to reach $891 billion by 2028, with potential growth exceeding $1 trillion by 2030. In Canada, the AI market was valued at $6.5 billion in 2023 and is projected to expand at an annual growth rate of 33.9% from 2023 to 2028, reaching $28.2 billion by 2028.

Key companies in the market are concentrating on launching new products, such as digital business platforms, to enhance their offerings. A digital business platform is an integrated ecosystem that unifies digital tools, technologies, and services to streamline operations, foster collaboration, and promote innovation within an organization. For instance, in June 2022, Siemens AG, a technology company based in Germany, introduced Siemens Xcelerator, an open digital business platform aimed at accelerating digital transformation. Siemens Xcelerator is specifically designed to expedite digital transformation across various industries. It combines IoT, AI, and advanced analytics to provide scalable solutions that improve collaboration and innovation, ultimately optimizing product development and operational efficiency for organizations of all sizes.

In January 2024, Accenture Plc, an IT company based in Ireland, acquired Work & Co. for an undisclosed sum. This strategic acquisition is part of Accenture's continuous investment in Accenture Song, recognized as the largest tech-powered creative group in the world. The goal of the acquisition is to strengthen Accenture's ability to provide innovative digital products and experiences to clients, catering to their changing needs. Work & Co. is a digital product company located in the United States.

Major companies operating in the digital transformation market include Google LLC, Microsoft Corporation, IBM Corporation, Accenture PLC, Adobe Systems Inc, Oracle Corporation, SAP SE, Capgemini, Salesforce.com, Dell EMC, Shanghai Electric Group Co., Ltd., Chongqing Changan Automobile Co., Ltd., Hakuna Matata, Midea Group's, Weichai Power Co., Ltd, Lianbao (Hefei) Electronic Technology Co., Ltd., Sany Heavy Industry Co., Ltd., CITIC Dicastal Co., Ltd., Space-O Technologies, Sophie Candau Communication, Xella, SQLI, Siemens AG, Deloitte, Nixu, Honeywell International Inc, 4iG Plc., Tibco Software Inc, ASG, CIOReview, Protiviti, Cognex Corporation, Cognizant, Apple Inc., Hewlett-Packard Company, Hisense Group Holdings Co., Ltd.

North America was the largest region in the digital transformation market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the digital transformation market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the digital transformation market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Italy, Spain, Canada.

Digital transformation, denoting the utilization of digital technology to innovate or modify business processes, organizational cultures, and customer experiences, relies on tools such as cloud computing, big data analytics, artificial intelligence, and the Internet of Things. These solutions empower traditional enterprises to streamline operations, reduce operational overhead, and enhance overall efficiency.

The primary categories of digital transformation encompass cloud computing, big data and analytics, artificial intelligence (AI), the Internet of Things (IoT), and blockchain. Cloud computing is widely adopted by organizations leveraging digital technologies to create or adapt their services and business processes. Cloud service providers offer a pay-as-you-go cloud platform, allowing clients to store business databases and optimize their operations. Utilizing virtual technology, the cloud-based server hosts the client's applications off-premises, providing convenient access for business operations. Deployment options include both cloud and on-premises, catering to the needs of large enterprises and small to medium-sized enterprises (SMEs). Diverse end-user sectors, including BFSI, healthcare, telecom and IT, automotive, retail and consumer goods, manufacturing, government, and others, benefit from these digital transformation initiatives.

The digital transformation market research report is one of a series of new reports that provides digital transformation market statistics, including digital transformation industry global market size, regional shares, competitors with a digital transformation market share, detailed digital transformation market segments, market trends and opportunities, and any further data you may need to thrive in the digital transformation industry. This digital transformation market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future state of the industry.

The digital transformation market includes revenues earned by entities by reducing operation costs to improve efficiency and customer satisfaction, generating data-based insights, and reducing human errors. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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