IT spending in Europe will amount to 1.1 trillion US dollars in 2024.
“Despite the tense economic situation, IT spending in Europe remains recession-proof,” says John-David Lovelock, analyst at Gartner. “CIOs in Europe, who have pursued a ‘growth at all costs’ strategy for over a decade, are now shifting the focus of ongoing IT projects to cost control, efficiency and automation, while cutting back on IT projects with longer ROI.”
Although artificial intelligence (AI) is a priority for CIOs, 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 paramount for European organisations, which has led to a new wave of pragmatism,” says Lovelock.
More money for cloud and cloud cybersecurity
While spending on data centres is stagnating, new investments are continuing to shift towards the cloud – including Infrastructure as a Service, which is expected to grow by 27% in Europe by 2024. CIOs are also increasing spending on cybersecurity in the cloud as well as AI and generative AI (GenAI). “AI adds additional security risks,” says Lovelock. Gartner therefore predicts that spending on security and risk management in Europe will reach around 56 billion US dollars in 2024, an increase of 16 per cent compared to 2023.
Part of the growth in IT services is due to the lack of skilled labour in IT departments in Europe. “There is a migration of IT skills away from the corporate IT department to technology and service providers,” says Lovelock. “CIOs don’t have the people or the talent to do all the work that needs to be done and are turning to IT service providers to fill the gaps.”
Cloud is a differentiator between countries in Europe
The three most mature countries in Europe will account for around 51 per cent of total IT spending in Europe in 2024. IT spending in the UK, Germany and France is expected to reach $588 billion in 2024, an increase of 9.8 per cent compared to 2023.
“Investment in the cloud is a key differentiator between mature and developing countries. In emerging markets, not all cloud applications, platforms and services are offered, which hinders adoption. Mature countries are large enough to attract cloud providers and IT talent,” says Lovelock. “The lack of cloud-specific skills available to deploy, maintain and operate the cloud is a significant barrier in developing countries.