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 (see Table 1).
Table 1. EMEA IT Spending Forecast, 2021-2023 (Millions of U.S. Dollars)
|
2021 Spending |
2021 Growth (%) |
2022 Spending |
2022 Growth (%) |
2023 Spending |
2023 Growth (%) |
Data Center Systems |
44,393 |
4.1 |
45,212 |
1.8 |
45,665 |
1.0 |
Software |
194,999 |
15.1 |
194,738 |
-0.1 |
211,572 |
8.6 |
Devices |
219,289 |
15.0 |
190,577 |
-13.1 |
185,620 |
-2.6 |
IT Services |
359,927 |
15.3 |
356,833 |
-0.9 |
380,472 |
6.6 |
Communications Services |
484,902 |
4.3 |
467,267 |
-3.6 |
477,865 |
2.3 |
Overall IT |
1,303,509 |
10.5 |
1,254,626 |
-3.8 |
1,301,194 |
3.7 |
Source: Gartner (November 2022)
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.”
More detailed analysis on the outlook for global IT spending is available in the Gartner webinar “IT Spend Forecast, 2Q22 Update: Address the Critical IT Skill Shortage." Learn about the top priorities for CIOs in 2022 in the complimentary Gartner ebook 2022 Leadership Vision for Chief Information Officers.
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, 3Q22 Update.”
About Gartner IT Symposium/Xpo
Gartner IT Symposium/Xpo™ 2022 is the world's most important gathering for CIOs and other IT executives. IT executives rely on these conferences to learn how to meet the moment and make a difference by providing the vision and results needed to lift their organizations to the next level. Follow news, photos and video coming from Gartner IT Symposium/Xpo on the Gartner Newsroom, on Twitter using #GartnerSYM, Instagram and LinkedIn.
Upcoming dates and locations for Gartner IT Symposium/Xpo include:
November 14-16 | India
About Gartner for High Tech
Gartner for High Tech equips tech leaders and their teams with role-based best practices, industry insights and strategic views into emerging trends and market changes to achieve their mission-critical priorities and build the successful organizations of tomorrow. Additional information is available at www.gartner.com/en/industries/high-tech.
Follow news and updates from Gartner for High Tech on Twitter and LinkedIn using #GartnerHT.
