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Last Updated : Nov 08, 2017 06:25 PM IST | Source: Moneycontrol.com

Gartner says IT spending in EMEA to exceed $1 trillion in the coming year

All categories of enterprise IT spending will return to growth in 2018, but only IT services and software will grow strongly at 4 percent and 7.6 percent

IT spending in Europe, the Middle East and Asia is projected to total USD 1 trillion in 2018, an increase of 4.9 percent from estimated spending of USD 974 billion in 2017, according to the research firm Gartner.

In 2017, however, all categories of IT spending in EMEA underperformed global averages, largely because of currency effects, such as the rapid appreciation of the euro against the dollar— it provides an incentive for Eurozone countries to defer IT spending to 2018 where possible, in anticipation of even lower prices in US dollars.

"However, there is more to the recovery in 2018 than just currency effects,” said John-David Lovelock, research vice president at Gartner.

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“Strong demand in the enterprise software and IT services categories across EMEA hint at significant shifts in IT spending patterns.”

In all, in the IT forecast the business trends are masked somewhat by consumer spending, but when we look at enterprise-only spending the new dynamics between the categories are much clearer, he added.

"The UK has EMEA’s largest IT market and its decline of 3.1 percent in 2017 impacts the forecast heavily,” said Lovelock. “Weak Sterling and political uncertainty since Brexit are reducing UK IT spending in 2017, while other major IT markets in EMEA grew steadily.”

EMEA enterprise IT spending in 2017 was weaker than the overall IT spending forecast, declining 1.4 percent. The only category predicted to show enterprise spending growth in 2017 is the enterprise software market at 3.2 percent.

“In 2017, we’re seeing a pause in EMEA enterprise spending due to the switch to as-a-service offerings gaining momentum,” said Lovelock.

“Among the spending rebounds in 2018, however, we expect lagging markets. The data center, devices and communication services categories are all on pace to decline 3 percent or more in 2017. Despite improvements in 2018, spending on servers, storage, network equipment, printers, PCs, mobile devices — and even hardware support — won’t recover to 2016 levels.”

In 2018, total enterprise spending in EMEA is on pace to grow 2.8 percent. All categories of enterprise IT spending will return to growth in 2018, but only IT services and software will grow strongly at 4 percent and 7.6 percent, respectively. Enterprise spending on devices and communications services will continue to fall behind in 2018, growing at 2 percent or lower, thus failing to recoup the losses of 2017.
First Published on Nov 8, 2017 06:25 pm
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