Japan remains the second-largest tech market worldwide after the US and accounts for a massive 40% of total IT spending in Asia Pacific. Japanese companies devote most of their annual IT budget and staff — 70% to 80% — to maintaining existing back-end infrastructure and applications. But we expect this budget to shift rapidly over the next two to three years as local organizations embrace disruptive technology innovations in their efforts to succeed in the Age of the Customer.
Forrester’s team of Asia Pacific analysts recently published our regional tech market predictions for 2014. Below are my predictions for Japan:
- Japan’s technology spending will show modest growth of 2% in 2014. Thanks to the positive economic impact of the government’s stimulus package and the depreciation of the yen, enterprise IT spending will likely grow by 3.7% in 2013. However, due to the consumption tax increase planned for April 2014 and the waning effects of the stimulus package, Forrester expects IT spending growth to slow to around 2% in 2014, driven by large application modernization projects in banking, manufacturing, and the public sector.