Digital Workplace Market Size, Share & Trends Analysis Report By Component Outlook (Services, Solution), By Organization (SMEs, Large Enterprise), By End-User (Manufacturing, Government, BFSI, Healthcare, Retail, IT and Telecom, Media and Entertainment), By Deployment (On-premises, Cloud) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global digital workplace market size was valued at USD 31.64 billion in 2023. It is expected to reach USD 153.1 billion in 2032, growing at a CAGR of 22.12% over the forecast period (2024-32). Increasing focus on digital transformation across industries drives the adoption of digital workplace technologies. Organizations are modernizing their workplace environments to enhance efficiency, agility, and innovation through digital tools and automation.

The idea of a digital workplace focuses on using digital transformation to align employees, technologies, and business processes. It makes it possible for workers to access their data and apps from any location and on any device. Solutions for enterprise mobility enabling users to work seamlessly across physical, virtual, and connected environments are called "digital workplace solutions." Building a user-centric workplace environment is the primary goal of workplace digitization. Employers can choose devices that improve their working experience thanks to digital workplace solutions, which increase productivity within the company. The market for the digital workplace is also expanding as more large companies and small and medium-sized businesses adopt the Bring Your Own Device (BYOD) and work-from-home concepts.

Highlights

• Services dominate the Component Outlook segment.
• Large Enterprise dominates the organization segment.
• IT and Telecom dominate the end-user segment.
• North America is the highest shareholder in the global market.

Market Dynamics

Global Digital Workplace Market Drivers

Growing Demand for Greater Flexibility and Employee Experience

In many organizations, the digital workplace has evolved into an integral component of the working environment. A digital workplace is a technological framework that gives employees a single location to access the company's operational business applications. Employees can carry out their duties from anywhere and use any device in the digital workplace. Employees benefit from a more flexible work environment and schedules in an efficient digital workplace. Through the appropriate digital workplace, there are chances to collaborate with team members, network with peers, and share ideas. The digital workplace encourages employee happiness and engagement and allows workers to voice their opinions and feel appreciated.

In addition, employees' overall productivity is increased due to the free flow of information in a digital workplace. The digital workplace also improves employee satisfaction and contribution by delivering the appropriate information at the appropriate time. Through digital tools, such as mobile intranet software, employees can connect from anywhere and with less emphasis on a rigid schedule. According to a recent cloud provider CoSo Cloud survey, 77% of remote workers already report higher productivity levels. This is probably due to technological advancements that streamline processes and enable workers to complete more work in less time.

Global Digital Workplace Market Restraints

Data Security when Switching to a Digital Workplace

Data security is one of the main obstacles to adopting the digital workplace. Moving data to the cloud as part of creating a digital workplace makes it simpler for employees to manage their work from any location or device. As a result, when switching to a digital workplace, data security becomes a significant challenge. The digital workplace could expose businesses to various security risks, including phishing, other forms of social engineering, viruses, malware, and ransomware. Digital workplaces are particularly prone to data breaches because identity theft can be performed utilizing the information available within the system. A data breach could happen if an unauthorized user or hacker gains access to the patient's data.

Global Digital Workplace Market Opportunities

Growing Adoption of Cloud Services by Enterprises

Outsourcing IT management and resources used in the cloud is known as cloud service. One of the main factors driving the growth of cloud services is the rising demand from businesses to reduce operating and infrastructure costs to manage business procedures. Additionally, outsourcing cloud resources to outside parties boosts organizational competitiveness and enables businesses to focus on their core competencies. Further, the growing field of big data has increased the demand for analytical and cloud computing services.

Additionally, the service demand will increase as scalability and reliability increase, enabling businesses to scale their operations by supplying tailored offerings to the available services. Businesses are more focused on cutting IT costs, which will increase demand in the near future. By providing helpful tools like development tools, pre-trained neural networks, and technical support for developers, cloud service providers aid users with setup and troubleshooting. Cloud-based tools like Google Workspace make it feasible to securely link people, support mobile and distant workers, and manage their devices. They accomplish this at a low cost compared to more conventional office equipment.

Regional Analysis

Based on region, the global market is divided into North America, Europe, Asia-Pacific, and RoW.

North America Dominates the Global Market

North America is the most significant global digital workplace market shareholder and is anticipated to exhibit a CAGR of 22.06% during the forecast period. The world's largest consumer of digital workplace solutions is in North America. This may be attributed to the existence of big businesses, the rising use of "Bring Your Own Device" policies, and the rising number of hosted servers in the US. The majority of the world's privately held enterprise IT companies—roughly 63%—have their headquarters in the United States, along with many other enterprise service providers. Before launching them abroad, most businesses test out their various services domestically. Additionally, the market is being driven forward by the region's quick adoption of cutting-edge technology and a growing emphasis on flexible work environments and the infrastructure that supports them. The country's large cloud service providers, including Microsoft and Amazon, are a major factor in the market growth for digital workplaces.

Europe is anticipated to exhibit a CAGR of 21.65% over the forecast period. Due to the early adoption of new technologies, significant investments in R&D for cloud-based solutions, and improved IT infrastructure, the Europe region is expected to hold a sizable market share. The market for digital workplaces also develops more quickly as a result of the accessibility of affordable and secure IT solutions. In addition, some of the major players in the Europe region have been able to advance the technology through research and development. This is anticipated to increase the adoption of digital workplace solutions over the forecast period. The Digital Workplace initiative was launched by the European Commission to address organizational bottlenecks and encourage teamwork. The initiative is anticipated to equip staff with the appropriate IT tools, platforms, and services, allowing users to work and collaborate anywhere, at any time, with security appropriate for the situation and maximizing their productivity.

Additionally, in order to increase productivity, many industry verticals are digitizing their business processes. By switching to digital documentation over paper paperwork, businesses with yearly revenues between 450,000 and 900,000 Euros save about 36,000 Euros. The digital workplace market is anticipated to grow as a result of the increasing digitalization of industries.

Asia-Pacific is anticipated to witness the quickest growth in the market for digital workplace solutions over the forecast period. The widespread use of several market leaders combined with the recent digital transformation in the area is expected to accelerate the adoption of these solutions. Asia-Pacific has the best chance of developing into an IT hub. It is going through a digital transformation as a result of developing technological infrastructure and an educated workforce, with nations like China and India leading the way. In addition, IT firms in the area are using digital workplace solutions to boost productivity and improve efficiency. According to the India Brand Equity Foundation, India is the dominant player in the international KPO market, contributing between 65 and 70 percent. Furthermore, India offers all the conditions required to perform KPO services, in addition to a proactive government policy and a sizable talent pool of engineers, MBAs, and PhDs. India is now the dominant player in the global KPO market after replicating its success in IT outsourcing in the KPO sector.

Brazil and Argentina are the market leaders for the digital workplace in South America. Brazil emerged as the leading market in South America for digital workplaces as a result of rising IT infrastructure investments. With the increasing internet use across South American nations, the adoption of digital workplace solutions is anticipated to increase. Additionally, the adoption of remote and hybrid working models by organizations throughout South America has increased due to the growing cloud network. The growing adoption of remote and hybrid working environments is fueling the growth of IT solutions in Latin America. This, in turn, fuels the local market for digital workplace solutions.

Additionally, the digital workplace market will soon experience notable growth in South American nations that are rapidly industrializing. Due to accelerating urbanization, globalization, and industrialization, the Middle East and Africa are predicted to witness significant growth during the forecast period. The market for digital workplaces has enormous potential, primarily because of accelerating economic growth and rising purchasing power parity.

Segmental Analysis

The global digital workplace market is segmented by component outlook, organization, and end-user.

Based on the component outlook, the global market is divided into services and solutions.

The services segment is the largest contributor to the market and is expected to exhibit a CAGR of 21.73% over the forecast period. Services for the digital workplace assist businesses in efficiently aligning their digital workplace processes with necessary digitalization. Professional services also provide several advantages to businesses, including reduced governance and compliance risks, quicker time-to-market, and stable operating environments. Professional services include integration and implementation services, support and maintenance for training, and consulting services. These services offer reasonably priced assistance for technical issues and minimize any downtime brought on by implementing digital workplace solutions. In addition, market participants who provide training support and maintenance services emphasize increasing network performance, lowering CAPEX and operational expenses (OPEX), and offering end-to-end delivery and multivendor support. The demand for digital workplace services is predicted to increase in the coming years as businesses upgrade their workplace platforms.

Based on the organization, the global market is divided into SMEs and large enterprises.

The large enterprise segment owns the highest market share and is anticipated to exhibit a CAGR of 21.73% during the forecast period. The market for digital workplaces is dominated by large businesses, accounting for 61% of the market, as their adoption of digitalization has been on the rise significantly. In order to effectively run their businesses, these organizations are investing in the most cutting-edge technologies. Due to the complexity of their IT infrastructure compared to SMEs, large businesses have a stronghold on digital workplace solutions.

Additionally, large enterprises are more likely to exhibit increasing bandwidth connectivity due to a sizable workforce. Large businesses also have a broad corporate network and numerous sources of income. Enterprises now find it challenging to properly store their data, maintain and manage their data centers, and concentrate on their core business operations due to the growing demand for employees to access computing resources and applications from a mobile location at any time.

Based on end-use, the global market is divided into manufacturing, government, BFSI, healthcare, retail, IT and telecom, and media and entertainment.

The IT and telecom segment owns the highest market share and is anticipated to grow at a CAGR of 22.66% during the forecast period. The industry benefits from increased employee productivity, lower costs associated with physical footprints, decreased employee churn, a larger pool of qualified candidates to choose from when hiring, and other factors, making the IT sector a key player in the development of the digital workplace industry. Many businesses, especially those in the IT sector and startups, were already utilizing digital workplace tools like Slack and Microsoft Office 365 before the pandemic. Additionally, IT and telecom businesses look after a larger customer base and meet a variety of customer needs. In order to maintain their competitive position, businesses in the IT and telecom sectors must implement digital workplace strategies, increase customer satisfaction, and handle complex and sensitive data.

Recent Developments

• March 2024 - Leading Greek insurer Ethniki Asfalistiki and the world's largest IT infrastructure services provider, Kyndryl (NYSE: KD), established a partnership to digitally modernize Ethniki's workplace. This program aims to give Ethniki staff anytime, anywhere access to the tools, data, and apps they require.
• May 2024 - With the goal of modernizing Nokia's employee service desk and offering seamless, real-time IT help to a global network of employees, the multimillion-dollar agreement was inked by the Indian IT services company Wipro and the telecom giant. Wipro also informed stock exchanges of this development.