IT spending in Europe is on course to pass $1 trillion by the end of 2023 and is projected to rise 9% next year to $1.1 trillion, according to the latest forecast by industry analyst, Gartner. But AI will not be a major driver – not yet at least. While AI is a priority for CIOs this year and next, it is not yet a priority, the firm noted.
► New spending directed to cloud and cloud cybersecurity
► Revenue generation, profitability and security will be priorities
► AI not a significant overall driver as yet
‘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.’
Other factors, such as revenue generation, profitability and security, will fuel 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.
Software and IT services are the two segments where CIOs in Europe are expected to increase their spending the most in 2024 (see Table 1).
While there is sufficient spending to maintain existing on-premises data centres, new spending continues to skew toward cloud options, including IaaS, which is expected to grow 27% in Europe in 2024. CIOs are also shifting their priorities internally with cybersecurity and cloud taking higher priority along with planning for AI and generative AI. Gartner forecasts spending on security and risk management in Europe to reach an estimated $56 billion in 2024, a 16% increase from 2023.
The top three most mature countries in Europe will represent 51% of total IT spending in Europe in 2024. IT spending in the UK, Germany and France is projected to total $588 billion in 2024, up 9.8% from 2023.
Table 1. Europe IT Spending Forecast (Millions of U.S. Dollars)
| 2022 Spending | 2022 Growth (%) | 2023 Spending | 2023 Growth (%) | 2024 Spending | 2024 Growth (%) | |
|---|---|---|---|---|---|---|
| Data Centre Systems | 44,804 | 13.8 | 46,177 | 3.1 | 49,894 | 8.0 |
| Devices | 146,391 | -13.3 | 125,483 | -14.3 | 131,301 | 4.6 |
| Software | 184,362 | 2.6 | 211,182 | 14.6 | 241,837 | 14.5 |
| IT Services | 347,425 | 2.3 | 382,306 | 10.0 | 427,350 | 11.8 |
| Communications Services | 272,854 | -6.1 | 285,269 | 4.6 | 297,749 | 4.4 |
| Overall IT | 995,836 | -2.2 | 1,050,417 | 5.5 | 1,148,131 | 9.3 |
Source: Gartner (November 2023)
