IT Spending in Europe Estimated to Reach $1.1tn by 2024: Cloud, Security, and AI at the Forefront
According to recent figures from Gartner, it is projected that Information Technology (IT) spending in Europe will reach a staggering $1.1tn in 2024, reflecting a significant increase of 9.3% compared to the current year’s expenditure. Notably, software and IT services are expected to witness the highest spending growth in 2024, while the data center market is tilting towards cloud options with an anticipated growth rate of 27%.
The priorities of European Chief Information Officers (CIOs) are centered around bolstering cybersecurity investments in the cloud and formulating strategies for artificial intelligence (AI) and generative AI. Expenditure on security and risk management is predicted to surge to approximately $56bn in 2024, reflecting a substantial 16% increase.
Despite the prevailing economic situation, IT spending in Europe continues to defy recessionary trends. John-David Lovelock, Distinguished VP Analyst at Gartner, emphasizes that CIOs who previously pursued a growth-focused strategy have now shifted their focus towards cost control, efficiency enhancement, and automation. Additionally, CIOs are increasingly cautious about fortifying their systems against potential security breaches in the era of AI.
Surprisingly, talent shortages within European IT departments have contributed to the growth in IT services spending. There has been a distinct migration of IT skills from enterprise IT departments towards technology and service providers (TSPs), as CIOs face challenges in recruiting and retaining skilled employees. Consequently, IT services firms are stepping in to bridge the gap and alleviate the strain on internal IT resources.
The United Kingdom, Germany, and France are projected to account for 51% of the total IT spending in Europe by 2024, amounting to a collective expenditure of $588bn. This represents a significant 9.8% increase from the expenditure in 2023. On the other hand, in terms of devices, although businesses and consumers are expected to ramp up their spending in the coming year, IT spending in this segment is not expected to recover to pre-pandemic levels until 2027.
Looking ahead, Austria, Ireland, and Finland are anticipated to experience a substantial rebound in consumer spending in 2024 when it comes to IT-related purchases.
In conclusion, IT spending in Europe is poised to reach remarkable heights over the next few years, driven by factors such as cloud adoption, cybersecurity concerns, and the integration of AI technologies. As European CIOs focus on optimizing cost-efficiency and strengthening their security measures, the reliance on IT services firms is expected to grow. The region’s powerhouse economies will play a pivotal role in driving overall IT spending, while consumer spending is forecasted to gradually recover. It is clear that Europe’s IT landscape is evolving rapidly, as organizations usher in the era of digital transformation and prepare for the challenges and opportunities that lie ahead.