EMEA enterprise IT spending set to rebound in 2011
But Western Europe will not return to growth until at least 2012, analyst Gartner predicts
On the up: Enterprise IT spend is set to rebound in 2011
Enterprise IT spending in EMEA is set to rebound in 2011, reaching $795.2bn (£493bn), according to the latest figures from Gartner.
But despite the expected rebound, EMEA will be the only region to show a decline in IT spending in both 2009 and 2010, with enterprise IT spending forecast to reach $748bn this year, a decline of 2.1 per cent from 2009.
Peter Sondergaard, senior vice president and global head of research at Gartner, said: “This decline in IT spending in 2010 is placing EMEA as the slowest region to fully overcome the downturn.
“We expect Western Europe to record the worst decline in EMEA in 2010, and experience the slowest long-term growth rate with a compound annual growth rate of 0.8 per cent through 2014.”
He said the European sovereign debt crisis is heralding a period of austerity that is affecting the mature economies of Western Europe, as countries try to cut back on eye-watering debts.
“We forecast enterprise IT spending in government in EMEA to decline 2.8 per cent in 2010 and total $139.6bn. It will exhibit slow growth through 2014 as the public sector continues to focus on bringing budget deficits under control during the next five years,” Sondergaard said.
However, the ongoing drop in the value of the euro and the British pound should promote healthy export growth in Western Europe and positive economic growth along with it, Gartner claimed. The analyst said that as governments scale back their spending and social support, Western Europe is not expected to return to stronger enterprise IT spending growth until 2012.
This year, the computing hardware market is the only segment to return to growth in EMEA, with hardware spending set to total $79.4bn, a 4.6 per cent increase on last year.
Sondergaard added: “We are seeing a rise in shipments across hardware due to the low volumes in 2009 and from organisations gradually returning their replacement cycles to a normal length.”
Gartner said the IT services market continues to struggle in EMEA and will be the slowest to return to growth. It is forecast to decline 5.6 per cent and reach $234bn in 2010.
The analyst also predicts that enterprise software spending in EMEA will surpass growth in spending on hardware, and this trend will continue through to 2013 as organisations begin a new software applications replacement cycle.
Sondergaard said: “This is leading to a ‘polarisation’ of performances in the software market. The countries that are leading the recovery are being more proactive on the software purchase front, while those that are still languishing in recession miss out on the more innovative software investments. By 2014 this could lead to an even larger gap between the size and growth rates of the software markets in these two different types of countries.”