IDC: 2010 saw tech investment rebound

But analyst warns rocky road lies ahead with soaring inflation and fiscal consolidation

IT spend across Western Europe bounced back in 2010 after a significant contraction in 2009, according to analyst IDC.

And this spend is expected to reach $460bn by 2015, despite challenges such as fiscal consolidation, slower external and domestic demand, and soaring inflation, the market watcher claimed.

The 2010 spike was driven mostly by improving economic conditions and a need for firms to continue discretionary investments that were postponed after the 2008 downturn.

Nina Bonagura, senior research analyst at IDC's European vertical markets team, said: "Given the increasing economic uncertainty over the pace of recovery, it is extremely important to identify where pockets of growth will be concentrated."

Bonagura said that for companies looking to restore competitiveness, they will need to focus on issues such as sensitive-data protection, customer care enhancement, performance improvement and operational cost reduction. But she warned that vertical markets will have different spending patterns, with some segments offering stronger opportunities than others.

Other findings of the study revealed that companies are cautiously increasing IT investment, particularly in stable economies such as Germany and France, but countries such as Italy and Spain are lagging.

Unsurprisingly, government is the area where IDC expects to see the biggest reductions in IT spend, but healthcare will offer the most opportunities.

IDC also forecasts medium-to long-term opportunities in utilities and retail, with business services such as data protection and customer care offering ‘above average' opportunities.

And finally, growing opportunities will come from financial services institutions, with banking expected to speed up investments to reduce operational costs and enhance responsiveness.