Spending

Gartner predicts IT spending in EMEA will grow 3.7% in 2023

IT spending in EMEA is expected to reach $1.3 trillion in 2023, a 3.7% increase from 2022, according to the latest forecast from Gartner, Inc. Among the most mature markets in Western Europe, Germany, France and the UK, IT spending in the UK is expected to see the strongest growth in 2023, reaching a 5.2% year-over-year increase.

“During turbulent times, CIOs are reluctant to sign new contracts, commit to long-term initiatives, or engage new technology partners,” said John Lovelock, Distinguished Vice President Analyst at Gartner. “Enterprise IT budgets are not at the heart of this hesitation, and businesses across EMEA will increase their IT budgets in 2023.”

Gartner analysts discussed macroeconomic and IT trends impacting the IT market in EMEA at the Gartner IT Symposium/Xpo™, which runs through tomorrow.

CIOs in the EMEA region, however, will need to perform a balancing act with their IT budget. “For example, they will use digital technology to help other departments achieve operational and cost efficiencies and deploy digital technology to transform their company’s value proposition, revenue, and customer interactions. “Lovelock said.

After a projected decline across all segments in 2022, enterprise software spending is on track to rebound faster than other segments with a projected increase of 8.6% in 2023 (see Table 1).

Table 1. EMEA IT Spending Forecast, 2021-2023 (USD Million)

2021 expenses

2021

Growth (%)

2022 expenses

2022

Growth (%)

Expenditure 2023

2023

Growth (%)

Data center systems

44,393

4.1

45,212

1.8

45,665

1.0

Software

194,999

15.1

194,738

-0.1

211,572

8.6

Devices

219 289

15.0

190,577

-13.1

185,620

-2.6

IT services

359,927

15.3

356,833

-0.9

380 472

6.6

Communication Services

484 902

4.3

467 267

-3.6

477,865

2.3

Global Computing

1,303,509

10.5

1,254,626

-3.8

1,301,194

3.7

Source: Gartner (November 2022)

Cloud software spending will focus on transformation and efficiency, and EMEA CIOs will also use cloud-first for new initiatives, such as packaged business capabilities (PBCs) and data grids, while maintaining current on-premises environments. Spending on public cloud services in EMEA is expected to grow from $111 billion in 2022 to $131 billion in 2023, an 18.2% year-over-year increase. Cloud software spending will represent 34% of total enterprise software spending in EMEA.

In contrast, consumer IT spending will not be recession proof. “As inflation rates rise and the effects last longer, not only low-income consumers, but also high-income people, will reduce their spending on devices,” Lovelock said. “In 2023, consumer spending on personal devices is expected to decline by 2.6%. In 2022, it is expected to fall 13%, the biggest double-digit decline since 2009, when it fell 11.3%.

IT spending is expected to fare better in the UK than in France and Germany in 2023
Among the most mature markets in Western Europe, UK IT spending is expected to achieve the highest growth rate in 2023 to reach $218.7 billion. In 2022, the UK will also fare better than France and Germany in local currency. IT spending in the UK is expected to achieve the highest growth rate in 2022 with an 8% increase in sterling terms. “However, due to the weakness of the British pound against the US dollar, this translates into an overall decline in IT spending of 2.5% in US dollars.

“With inflation rates compounded by the weakening of the British pound and euro against the US dollar, CIOs in Western Europe should be wary of price increases from IT vendors. Insist on a breakdown of the root causes of price increases and look for win-win strategies to improve strategic partnerships that also consider non-monetary benefits.

A more detailed analysis of the outlook for global IT spending is available in Gartner’s webinar titled “IT Spend Forecast, 2Q22 Update: Address the Critical IT Skill Shortage”. Learn about the top priorities for CIOs in 2022 in the Gartner 2022 Leadership Vision for CIOs e-book.

Gartner’s IT spend forecasting methodology relies heavily on rigorous analysis of sales from more than a thousand vendors across the full spectrum of IT products and services. Gartner uses primary research techniques, supplemented with secondary research sources, to create a comprehensive database of market sizing data on which to base its forecasts.

Gartner’s Quarterly IT Spend Forecast provides a unique perspective on IT spending across the hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent research on IT spending forecasts is available to Gartner customers in “Gartner Market Databook, 3Q22 Update”.

About the Gartner IT Symposium/Xpo
Gartner IT Symposium/Xpo™ 2022 is the world’s premier gathering for CIOs and other IT managers. IT leaders rely on these conferences to learn how to seize the moment and make a difference by providing the vision and results needed to take their organization to the next level. Follow Gartner IT Symposium/Xpo news, photos and videos on the Gartner Newsroom, on Twitter using #GartnerSYMInstagram and LinkedIn.

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November 14-16 | India

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