Andrey Popov - Fotolia

Mixed prospects for IT spending in Europe

Europe’s economies have varying expectations for IT spending over the next couple of years as the global market sees moderate growth

As moderate IT spending growth is predicted globally, European countries are a mixed bag, according to IT spending predictions from Forrester Research.

The contrasting fortunes of IT budgets across Europe is clear, with the UK expected to increase its spending by 8%, in US dollar terms, in 2016 compared to 2015, while Russia’s spending is expected to drop by 16.1% over the same period.

Different fortunes are also predicted for western Europe’s three biggest economies. While the UK, already Europe’s biggest spender, will up its IT spending by 8%, Germany will see a rise of 3.1% and France only 1.5%. In US dollar terms, IT spending in these three countries will be $178.6bn, $132.7bn and $101.2bn, respectively.

In southern Europe, Italy is expected to spend $63.4bn and Spain $69bn – rises of 4.4% and 5.7%, respectively. In the Benelux region, Belgium will increase its IT spending by 1.2% and the Netherlands by 5.5%, with about $64bn spent between them.

Meanwhile, the Nordic economies of Sweden and Denmark will jointly spend about $46bn, with increases in local currency terms of 5.6% and 4%, respectively.

Further east, Poland will increase its IT spending by 7.3% to $21.6bn in local currency terms, while Russia’s budget will be $14.5bn, down 16.1%.

Forrester said: “Europe struggles to sustain growth. Just as the southern European countries of Greece, Italy, Portugal and Spain began to crawl back from their debt-related recessions, the terrorist attacks in Paris diminished consumer confidence in France and Belgium and threaten to re-erect travel barriers within Europe.

Read more about IT spending

  • Software spending will rise by almost 10% to $640bn worldwide in 2017, according to Forrester.
  • IT budgets will grow at their slowest rate for four years in 2016, yet companies are spending more on digital technology.
  • CIOs could struggle to get the best value from their IT budget as the strong US dollar drives up costs.

“The northern and eastern tier of countries, such as the UK, Sweden and Poland, continue to outperform the Eurozone countries. Germany’s growth remains solid but unimpressive.”

Meanwhile, Russia’s slowdown is typical of emerging economies such as those in eastern Europe, said Forrester. “These emerging economies will lag in 2016, as the drop in oil and other commodity prices holds back economic growth and thus tech demand,” it said

Globally, the US is by far the largest tech market, with spending worth $1,132bn expected in 2016. China is in second place with $224bn and Japan is third with $203.4bn, ahead of the UK, Germany and France in fourth, fifth and sixth places. Spain, Italy, Canada and India make up the rest of the global top 10.

Cloud, SaaS and business analytics are expected to drive up demand for software, said Forrester. ........................................................................................

Read more on Managing IT and business issues

Data Center
Data Management