IT spending in Europe remains recession-proof | In numbers

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IT spending in Europe is expected to reach $1.1 trillion in 2024, which is 9.3% from 2023, according to Gartner’s latest forecasts. IT spending in Europe is on track to exceed $1 trillion by the end of 2023. According to Gartner Distinguished Analyst John-David Lovelock, “European CIOs pursuing ‘growth at all costs’ strategy for more than a decade, today the emphasis on ongoing IT projects is shifting towards cost control, efficiency and automation, while downgrading IT initiatives with higher ROI.”

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, that will drive IT spending in Europe next year. “Maintaining a healthy profit margin has become critical for European businesses and this has brought a new wave of pragmatism,” added Lovelock.

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Software and IT services are the two areas where CIOs in Europe are expected to increase their spending the most in 2024. While there is enough spending within the data center markets to maintain existing centers of on-premises data, New spending continues to drive cloud options, including infrastructure as a service (IaaS), which is expected to grow by 27% in Europe by 2024. CIOs in Europe also are shifting their priorities inward, including increasing spending on cloud cybersecurity and AI and generative AI (GenAI) planning.

“AI also adds a new level of concern to the security environment, ensuring that your systems are protected before attackers can get close to your sensitive data,” Lovelock said. Gartner predicts that spending on security and risk management in Europe will reach $56 billion by 2024, an increase of 16% compared to 2023.

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Inflation continues to affect consumer purchasing power, and while businesses and consumers are expected to increase their spending on devices in 2024, it is estimated that the level of IT spending on devices will not return to the level of 2021 until 2027.

Cloud investment is a key difference between mature and developing countries. Not all cloud applications, platforms and services are offered in developing countries, making adoption difficult. “The lack of cloud-specific skills that can be used to implement, maintain and operate the cloud is a major obstacle in developing countries. Mature countries are big enough to attract cloud providers and IT talent,” Lovelock concluded.

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