Digital Transformation Market Size, Growth & Trends Report | 2028

The digital transformation market size is expected to grow from US$ 725.62 billion in 2022 to US$ 1,650 billion by 2028; it is estimated to grow at a CAGR of 22.5% from 2022 to 2028.

Digital transformation is the change associated with the application of digital technology in all aspects of human society. This enables new types of innovations and creativity in specific domains rather than simply enhancing and supporting traditional methods. Currently, digital transformation is being highly adopted by different industry verticals in all regions. Especially in North America, the adoption or shifting of the industry verticals toward digital transformation is very high compared to every other region. The presence of well-known and financially strong companies such as Microsoft Corporation, Oracle Corporation, Accenture, and Google Inc. characterizes the global digital transformation market growth.

Digital solutions have created a potential for companies to reach a huge audience worldwide. For instance, Uber and Lyft, on-demand transportation companies, utilized digital platforms and earned huge success. These companies can be considered a key illustration of how implementing strategy and innovation can transform the transportation industry. Furthermore, in the fastest-growing e-commerce market, more and more SMEs are now using online platforms to provide their offerings to customers. This has enabled them to extend their market reach, enhance external communication, augment sales, improve processing speed, improve company image, and increase employee productivity.

Based on components, the solutions segment accounts for more than half of the digital transformation market share globally. Companies such as UST, Veritis Group Inc., and Kellton Tech are engaged in the business of providing digital transformation-specific solutions. The solutions assist in realizing long-term visions while using advanced technologies such as IoT, robotic process automation, Blockchain, enterprise mobility, data science, and analytics.

Strategic Insights

Regional Analysis of Digital Transformation Market

From the regional perspective, APAC is the second-largest region in digital transformation market in 2022. China, Taiwan, Japan, and South Korea are major countries with a huge manufacturing industry base, especially semiconductor & electronics manufacturing. As a result, the nations mentioned above are witnessing huge growth in their manufacturing, resulting in the adoption of digital and smart technologies.

Digital transformation was already rising in Asia to change the way industries operate. In addition, the COVID-19 crisis boosted technological adoption for addressing public health issues. It has been observed that digitalization is reshaping Asian countries. The digital transformation prevailing in South and Southeast Asian economies is providing an array of opportunities for their respective industrial units. Countries such as Vietnam and Singapore are expected to grow exponentially and place themselves among the key countries leading digitalization.

The Indian market is expected to become one of the major markets for the manufacturing industry. In October 2022, the country planned to shift factories from China to India for US$ 1.2 trillion. Under this governmental plan, the authorities would work on digitalizing processes and modernizing warehouses while lowering logistics costs. One of the companies that started their manufacturing base in India is Apple, Inc. The company is planning to start with iPhone 14 production. Moreover, Ola Electric Mobility Pvt. Ltd. has aimed to produce the biggest electric scooter factory.

Such investments are projected to fuel the growth of the Indian manufacturing sector, creating significant opportunities for digital transformation providers.

Lucrative Regions – Digital Transformation Market Share

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Market Insights – Digital Transformation Market

Deployment Type-Based Insights

Based on deployment type, the digital transformation market size is segmented into on-premise and cloud. In 2022, the on-premise segment accounted for a larger digital transformation market share, whereas the cloud segment is expected to grow at a faster CAGR. Organizations are turning toward IoT, cloud, and web applications to collect critical, real-time information, optimize internal workflows, and accelerate data analysis. To reap the full benefits of digital transformation, the technologies that the company adopts have to offer four different capabilities—virtualization, ubiquitous broadband (5G), IoT, and big data analytics. Digital transformation through the cloud uses public, private, and hybrid cloud platforms. These platforms generate or modify culture, business processes, and customer experiences to fulfill evolving business requirements and market dynamics.

Therefore, with cloud computing obtaining high momentum globally, the penetration rate of digital transformation is expected to rise.

Furthermore, due to the pandemic, businesses have adopted digital technologies to make work procedures easy and smooth. Advanced technologies such as machine learning and automation, IoT, and digital twin help increase efficiencies by automating routine tasks. For instance, Newport News Shipbuilding (a division of Huntington Ingalls Industries,) is utilizing AR to provide digital instructions to the workspace. The use of AR will help guide electricians in routing their wires, and other daily tasks. Using technologies will help companies leverage real-time data to enhance operational performance.

The digital transformation market players are mainly focusing on developing advanced and efficient products.

• In December 2022, Tech Mahindra and the government body of Thailand signed a Memorandum of Understanding to encourage digital transformation in Thailand. The agreement aims to develop digital solutions for telecom, smart cities, and many more using 5G, analytics, IoT, and Blockchain.
• In December 2022, OnActuate partnered with Bisleri for the Microsoft Cloud dynamics digital transformation. The partnership will assist Bisleri in using the innovative solution of OnActuate for bottling manufacturers. In this, both companies will execute Microsoft Dynamics 365 and a bottling solution.

The digital transformation market is segmented into five major regions—North America, Europe, Asia Pacific (APAC), Middle East & Africa, and South America. In 2022, North America led the digital transformation market with a largest share in 2022, followed by APAC. Further, Asia Pacific is expected to register the highest CAGR in the digital transformation market from 2022 to 2028.

Adobe Systems Inc., IBM Corporation, Microsoft Corporation, Oracle Corporation, Accenture PLC, SAP SE, Dell Inc., Capgemini SE, Google Inc., and Cognizant Technology Solutions Corporation are among the key digital transformation market players operating in the industry. The market report provides detailed market insights, which help the key players strategize growth in coming years.