Gartner predicts 2011 IT spending rebound in Europe

Gartner predicts 2011 IT spending rebound in Europe

Only utility companies show signs of IT spending growth this year

Article comments

Gartner has predicted that enterprise IT spending in Europe, the Middle East and Africa will recover in 2011, after two years of decline.

However, government cutbacks mean that Western Europe is not expected to return to stronger enterprise IT spending growth until 2012.

The analyst house forecast that IT spending will reach $795.2 billion (£493.1 billion) in EMEA next year, up 1.3 percent from 2010.

EMEA was the only region to have shown a decline in IT spending in 2009 and 2010. Gartner expects IT spend this year to be $784.8 billion ($486.5 billion) this year, down 2.1 percent from 2009.

Peter Sondergaard, senior vice-president and global head of research at Gartner, told the Gartner Symposium/ITxpo 2010 in Cannes: “This decline in IT spending in 2010 is placing EMEA as the slowest region to fully overcome the downturn.

“We expect Western Europe to record the worst decline in EMEA in 2010 (-3.3 percent) and experience the slowest long-term growth rate with a compound annual growth rate of 0.8 percent through 2014.”

Gartner said that the UK’s public sector cuts, which aim to reduce the nation’s debt, was a significant contributor to the decline in Europe.

“We forecast IT spending in government in EMEA to decline 2.8 percent in 2010 and total $139.6 billion (£86.5 billion). It will exhibit slow growth through 2014 as the public sector continues to focus on bringing budget deficits under control during the next five years,” said Sondergaard.

The computing hardware market was the only sector to return to growth in EMEA in 2010. Hardware spending was forecast to reach $79.4 billion (£49.2 billion) in 2010, up 4.6 percent on last year.

Sondergaard said: “We are seeing a rise in shipments across hardware due to the low volumes in 2009 and from organisations gradually returning their replacement cycles to a normal length.”

However, enterprise software spending will surpass hardware spending growth, which Gartner said is a trend to continue through 2014 as businesses begin a new software applications replacement cycle.

Meanwhile, Gartner said that the IT services market continues to struggle in EMEA and will be the slowest to return to growth. It is expected to decline by 5.6 percent to $234 billion (£145.1 billion) in 2010. The analyst attributed the decline to companies continuing to take a risk-averse and cost-focused approach to IT, which is preventing them from investing in process and product innovation.

In terms of industry sectors, Gartner forecast that only utilities will increase spending in 2010, and is expected to have the highest year-on-year growth through 2014. Enterprise spending in the sector is expected to reach $46.2 billion (£28.7 billion) in 2010, up 1.9 percent from last year, due to regulatory and policy changes, such as smart grids, that are requiring utilities to implement new processes, the required infrastructure and analysis of energy information.

This is supported by a recent survey by Oracle Utilities, which said that utility companies are not yet prepared for exploiting smart grid intelligence.

Nonetheless next year, only transport and education are expected to decline further, due to a continued cautious outlook in the former, and continued IT budget cuts in the latter.

Share:

Comments

Advertisement
Send to a friend

Email this article to a friend or colleague:


PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.


We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message

ComputerworldUK Knowledge Vault

ComputerworldUK
Share
x
Open
* *