Gartner Forecasts IT Spending in EMEA to Grow 3.7% in 2023

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IT spending in EMEA is forecast to total $1.3 trillion in 2023, an increase of 3.7% from 2022, according to the latest forecast by Gartner, Inc. Among the most mature markets in Western Europe, Germany, France and U.K., U.K. IT spending is projected to record the highest growth in 2023, achieving a 5.2% increase year-over-year.

“In turbulent times, CIOs hesitate to sign new contracts, commit to long-term initiatives or take on new technology partners,” said John Lovelock, Distinguished Vice President Analyst at Gartner. “Enterprise IT budgets are not central to this hesitancy, and businesses in EMEA will increase their IT budgets in 2023.”

Gartner analysts discussed macro-economic and IT trends impacting the IT market in EMEA during Gartner IT Symposium/Xpo™, which is taking place here through tomorrow.

EMEA CIOs will, however, perform a balancing act with their IT budget. “For example, they will use digital technology to help other departments realize operational efficiency and cost savings and deploy digital technology to transform their company’s value proposition, revenue, and client interactions,” said Lovelock.

Following a projected decline across all segments in 2022, enterprise software spending is on pace to rebound faster than the other segments with a forecasted 8.6% increase in 2023.

Spending on cloud software will focus on transformation and efficiency, and EMEA CIOs will also use cloud first for new initiatives, such as packaged business capabilities (PBCs) and data grids, while maintaining current on-premises environments. Public cloud services spending in EMEA is forecast to grow from $111 billion in 2022 to $131 billion in 2023, an increase of 18.2% year over year. Cloud software spending will represent 34% of total enterprise software spending in EMEA.

In contrast, consumer IT spending will not be recession proof. “As inflation rates climb and the effects last longer, not only low-income consumers but higher earners will reduce spending on devices,” said Lovelock. “In 2023, consumer spending on personal devices is on pace to decline 2.6%. In 2022, it is projected to decline 13%, the highest double-digit decline since 2009, when it declined 11.3%.”

IT Spending Projected to Fare Better in the U.K. Than in France and Germany in 2023

Among the most mature markets in Western Europe, U.K. IT spending is projected to achieve the highest growth rate in 2023 to reach $218.7 billion. In 2022, the U.K. will also fare better than France and Germany in local currency. U.K. IT spending is projected to achieve the highest growth rate in 2022 with an 8% increase in British pounds. “However, because of the weakness of the British pound compared to the US dollar, it translates into an overall decrease in IT spending of 2.5% in U.S. dollars.

“With inflation rates being compounded by the value of the British pound and euro weakening against the U.S. dollar, Western European CIOs need to be wary of price increases from IT vendors. Insist on a breakdown of the root cause(s) for price increases and look for win-win strategies to enhance strategic partnerships that also consider nonmonetary benefits.”