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In a nod to the growing impact of digital technology. Attendees stand near Amazon Web Services signage in Paris, June 29, 2017.Photo: Christophe Morin/Bloomberg
In a nod to the growing impact of digital technology, investment firm T. Rowe Price Group Inc. on Tuesday unveiled its annual global market outlook for the coming year, including for the first time a breakout assessment of “technology innovation and disruption.”
The forecast, which also includes analyses of the economy, political and fiscal policies and global trade, reflects a perceived rate of accelerated change in markets across all industries driven by tech innovation.

Amazon Web Services

Attendees stand near Amazon Web Services signage in Paris, June 29, 2017.Photo: Christophe Morin/Bloomberg

In a nod to the growing impact of digital technology, investment firm T. Rowe Price Group Inc. on Tuesday unveiled its annual global market outlook for the coming year, including for the first time a breakout assessment of “technology innovation and disruption.”

Ken Allen, T. Rowe Prices portfolio manager for science and technologyPhoto: Angus Loten / WSJ

Digital tools and services such as cloud computing, big data analytics and artificial intelligence are driving rapid change, creating value and will disrupt numerous industries in 2018, T. Rowe Price forecasters say.

By harnessing these and other enterprise IT capabilities – including the Internet-of-Things, autonomous vehicles and digital intelligent assistants – the firm said companies both inside and outside of the tech sector are capturing “unprecedented value.”

“One of the top five determinants of success for companies across industries in the next several years will be how well they’re leveraging this technology,” said Ken Allen, T. Rowe Price’s portfolio manager for science and technology.

Among other factors, he points to a sharp rise in mentions of Amazon.com Inc.’s AWS cloud service, Microsoft Corp. and other enterprise information technology firms on earnings calls by large non-tech firms. That shows most sizeable companies are thinking about – or have built out – software and developer capabilities, in order to leverage digital tools in the broader market, he said.

“Digitization is now a boardroom topic,” Mr. Allen said, “cloud is a boardroom topic.” More than ever, he added, chief information officers are part of that discussion.

As an investment firm, T. Rowe Price talks about these issues internally, and from that came the idea to include IT innovation as a distinct agenda item in its global outlook, Mr. Allen said.

In turn, the growth of digital technology is buoying an optimistic outlook for Amazon, Microsoft, Alphabet Inc.’s Google Cloud and other cloud-powered enterprise IT services.

Worldwide total revenue in the cloud services market hit $22.2 billion last year, and is expected to climb to $67 billion by 2020, according to Gartner Inc. By market share, Gartner says, cloud services offered by Amazon, Microsoft, Alibaba Group Holding Ltd. and Google currently lead the market.

Eight years ago, only Microsoft and Apple Inc. ranked among the top ten largest companies by market cap, according to T. Rowe Price’s analysis of FactSet data. As of Oct. 31, tech firms account for seven, the firm said.

“It’s a sweet spot to be,” Mr. Allen said about enterprise IT.

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