Research: Global Spending on Blockchain Solutions to Reach $2.9 Billion in 2019

By Kapil Gauhar

Global blockchain spending will reach $2.9 billion by the end of 2019, as indicated by a recent report from International Data Corporation (IDC), an advisory services firm.

The report, dubbed as “Worldwide Semiannual Blockchain Spending Guide,” was prepared by market intelligence and advisory firm – International Data Corporation. The report analyzes the emerging market of blockchain evaluating the spending data for 10 technologies across the 19 industries and 15 use cases in nine geographic regions.

James Wester, research director of Worldwide Blockchain Strategies, said –

“Blockchain is maturing rapidly, and we have reached an inflexion point where implementations are moving quickly beyond the pilot and proof of concept phase. That is why data on the actual spend on the technology is so vital: it provides the context in which blockchain is evolving. Understanding how and where enterprises are investing their money gives vendors a better sense of where they need to deliver products and services as well as offering technology buyers insight into how their peers are adopting blockchain. It also provides a snapshot of where we can expect to see this new technology disrupt the way enterprise software is delivered.”

The report forecasts that global spending on blockchain solutions will be about $2.9 billion in 2019, which is up by 88.7% from the $1.5 billion spent in 2018. For the period from 2018 to 2022, blockchain spending will reportedly see a CAGR of 76%, with total spending reaching the $12.4 billion mark in 2022.

The major driver of spending growth will reportedly be the financial sector, with an investment volume of more than $1.1 billion, which is followed by the resources and manufacturing sector led by retail industries.

The trade finance and transaction settlements along with cross-border payments and settlements will get the most investment in 2019, which will reportedly amount to $285 million and $453 million, respectively. However, the banking sector will purportedly allocate the most investments in both cases.

Jessica Goepfert, program vice-president at Customer Insights & Analysis, said –

“The use cases that comprise the blockchain opportunity are developing as swiftly as the technologies enabling it. While spending for more developed use cases in the financial sector like trade finance and cross-border payments is still healthy and growing strong, relative to six months ago we’ve seen an acceleration in spending across a variety of other areas, such as energy settlements and warranty claims. We are continuing to monitor and measure these developments on a regular basis and are inspired by the various forms of innovation blockchain delivers.”

According to the report, IT and business services will see about 70% of all blockchain spending this year, while blockchain platform software is expected to be the biggest sector of spending outside of the services category, along with five-year CAGR of 81.2%.

The breakdown at the regional level saw that the US would see the largest blockchain spending in 2019, amounting to $1.1 billion, followed by Western Europe and China, with $674 million and $319 million, respectively.

The report adds –

“All nine regions covered in the spending guide will see phenomenal spending growth over the 2018-2022 forecast period led by Japan and Canada with five-year CAGRs of 110% and 90%, respectively.”

The global blockchain in energy utilities market was estimated to be $210.4 million in 2018 and is reportedly anticipated to reach $3.4 billion by 2024.