Software driving increased IT spending in 2020

Gartner has been looking into its crystal ball to see how IT spending will fare across EMEA next year

Those trying to read the runes over the prospects for next year will be heartned to hear that across EMEA IT spending is expected to rise. 

Gartner has been gazing into its crystal ball and come up with a forecast that includes a 3.4% increase in IT spending across EMEA in 2020, which would be a return to growth. 

“2020 will be a recovery year for IT spending in EMEA after three consecutive years of decline,” said John Lovelock, research vice president at Gartner 

“This year declines in the Euro and the British Pound against the U.S. Dollar, at least partially due to Brexit concerns, pushed some IT spending down and caused a rise in local prices for technology hardware. However, 2020 will be a rebound year as Brexit is expected to be resolved and the pressure on currency rates relieved," he added. 

Software will be more in demand than hardware and resellers operating on that side of the market are set for a better 2020. The highest performing segment is expected to be enterprise software with 9.2% growth next year. IT services will be the second highest performing catagories, followed by comms services. 

Devices will come in with a minus number, down by 1.3%, as higher prices and a lack of must-have features on mobiles give customers an excuse to delay upgrading. 

Gartner is expecting security spending to keep rising, qwith Lovelock pointing to compliance as a reason for users to invest: "Globally, security spending is increasing and being driven by the need to be compliant with tariffs, trade policies and intellectual property rights. In EMEA, privacy and compliance concerns, further driven by GDPR, take precedence”. 

But even in that market the latest financial results from Sophos yesterday and research from ESET indicated that budgets are being put more towards software and services, rather than hardware. 

Digital transformation is also going to remain a reason for customers to spend and helping users with the cloud and getting the hybrid balance right is going to be an ongoing mission for the channel. 

“Organizations in Europe, regardless of industry, are shifting their balance from traditional to digital — moving toward “techquilibrium,” a technological balancing point that defines how digital an enterprise needs to be to compete or lead,” said Lovelock. 

“Not every company needs to be digital in the same way or to the same extent. This move towards rebalancing the traditional and digital is clearly visible amongst EMEA companies," he added. 

Providing assistance to those customers trying to wrestle with digitisation is a challenge that the channel has been dealing with throughout 2019 but research from Duologi indicated it is one of the main concerns for SMEs as they look ahead to next year. 

“Keeping up with new technology and investing in the latest innovations is also a worry for a large number of businesses, who are restricted by budget and lack of knowledge in the ever-changing area of technology. Larger businesses are also able to outspend smaller competitors and invest in their own unique innovations," said Michael Bevan, CEO of Duologi. 

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