Gartner Forecasts IT Spending in Europe to Record 9% Growth in 2024
November 14, 2023 | Gartner, Inc.Estimated reading time: 3 minutes
IT spending in Europe is projected to total $1.1 trillion in 2024, an increase of 9.3% from 2023, according to the latest forecast by Gartner, Inc. IT spending in Europe is on pace to surpass $1 trillion by the end of 2023.
“Despite a conflated economic situation, IT spending in Europe continues to be recession-proof,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “CIOs in Europe who pursued the “growth at all costs” strategy for over a decade, are now shifting the emphasis of ongoing IT projects toward cost control, efficiencies and automation, while curtailing IT initiatives with longer ROIs.”
Gartner analysts are exploring IT spending priorities for IT leaders and CIOs during Gartner IT Symposium/Xpo, taking place here through today.
Although artificial intelligence (AI) is a priority for CIOs this year and next, it is not yet a spending priority. There are other factors such as revenue generation, profitability and security fueling IT spending in Europe next year. “Maintaining a healthy profit margin has become pivotal for European corporations and this has ushered in a new wave of pragmatism,” said Lovelock.
New Spending Directed to Cloud and Cloud Cybersecurity
Software and IT services are the two segments where CIOs in Europe are expected to increase their spending the most in 2024.
While there is sufficient spending within data center markets to maintain the existing on-premises data centers, new spending continues to skew toward cloud options (including infrastructure as a service [IaaS]), which is expected to grow 27% in Europe in 2024. CIOs in Europe are also shifting their priorities internally, including enhancing cybersecurity spending in the cloud and planning for AI and generative AI (GenAI).
“AI has also added a new level of concern around security ensuring that their systems are wrapped before hackers get near their sensitive data,” said Lovelock. Gartner forecasts spending on security and risk management in Europe to reach an estimated $56 billion in 2024, a 16% increase from 2023.
Some of the growth in IT services is due to talent shortages in IT departments in Europe. “There is a migration of IT skills away from the enterprise IT department toward technology and service providers (TSPs),” said Lovelock. “CIOs do not have the employees nor the talents to do all the work required and turn to IT services firms to fill in the gaps.”
Inflation continues to impact consumer purchasing power, and while businesses and consumers are expected to increase their spending on devices in 2024, the level of IT spending on devices is not estimated to go back to 2021 levels until 2027. In Europe, Austria, Ireland and Finland are projected to record the biggest bounce back in consumer spending in 2024.
Cloud Is a Key Differentiator Across Countries in Europe
The top three most mature countries in Europe will represent 51% of total IT spending in Europe in 2024. IT spending in the U.K., Germany and France is projected to total $588 billion in 2024, up 9.8% from 2023.
Among the international monetary fund (IMF) developing countries (Hungary and Poland), IT spending is estimated to total $32.3 billion in 2024, up 9.2% from 2023.
Investment in cloud is a key differentiator between mature and developing countries. Not all cloud application, platforms and services are offered in emerging countries which impairs adoption. “The lack of cloud specific skills available to deploy, maintain and run cloud is a significant barrier in developing countries Mature countries are large enough to attract cloud providers and IT talent,” said.
Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of the sales by over a thousand vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data on which to base its forecast.
The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across the hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast research is available to Gartner clients in “Gartner Market Databook, 3Q23 Update.”
Suggested Items
Compal Posts Sales Report for November 2024
12/09/2024 | Compal Electronics Inc.Compal Electronics reported Nov 2024 consolidated revenue of NT$79,666mn, representing MoM decrease of 6.8% and YoY decrease of 5.9%. The accumulated revenue of 2024 was NT$846,216mn, representing YoY decrease of 3.5%.
OEP 80 B.V. Published Cicor’s Pre-Announcement for Mandatory Offer
12/09/2024 | CicorCicor Group announces that OEP 80 B.V. (OEP) published the pre-announcement for a mandatory offer for all the shares of Cicor Technologies Ltd. held in the public.
Global Total Semiconductor Equipment Sales Forecast to Reach a Record of $139 Billion in 2026
12/09/2024 | SEMIGlobal sales of total semiconductor manufacturing equipment by original equipment manufacturers (OEMs) are forecast to set a new industry record, reaching $113 billion in 2024, growing 6.5% year-on-year, SEMI announced in its Year-End Total Semiconductor Equipment Forecast – OEM Perspective at SEMICON Japan 2024.
Closing the Loop: iNEMI Workshop Addresses Circularity Challenges
12/09/2024 | Kelly Scanlon, IPC Lead Sustainability StrategistThe electronics industry faces increasing pressure from consumers and regulators to implement more circular design principles in their products. While some companies lead the way, many grapple with significant knowledge gaps. These include a lack of clear definitions for "circular economy" in the context of electronics, insufficient data, and inadequate training to apply circular principles effectively across product lifecycles. Additionally, there's a pressing need to understand the return on investment (ROI) and other potential incentives for implementing circular principles.
Mycronic Introduces New Machine Models to Its High-Performance Pick-And-Place Platform MYPRO A40
12/06/2024 | MycronicMycronic, the leading Sweden-based electronics assembly solutions provider, is introducing two new machine models MYPro A40SX and A40LX to its next-generation MYPro A40 pick-and-place platform, equipped with the all-new MX7 high-speed mounthead technology.